Rosatom launches global charm offensive

In a rare meeting with foreign media last week, Sergei Kiriyenko, a former Russian prime minister and now president of Rosatom, outlined plans for the company to become a leading international player as nuclear power enjoys a surge in demand.
“We want to double in size,” he told reporters in Toronto.
Like the Gazprom and Russian Railways monopolies, Rosatom is a former ministry, converted into a state corporation in 2007. If the Kremlin achieves its ambitions, Rosatom could become to global nuclear power what Gazprom is to the natural gas industry.
But as it looks outwards, Rosatom is burdened by the forbidding legacy of its Soviet past, including the catastrophic Chernobyl accident that cast a pall on the nuclear power industry for 20 years. More recently, Rosatom’s partnership with Iran at the Bushehr nuclear power plant has also provoked US antagonism.
Mr Kiriyenko admitted that Russia’s reputation in nuclear power was “not the best”, and described steps taken to improve transparency, including the separation of civil and military aspects of the business and a new law allowing foreign investment.
Rosatom is now looking for foreign partners across the full nuclear cycle, including uranium mining and enrichment, fuel assembly and nuclear reactor design and supply.
“The most rational way to develop is to build global alliances,” Mr Kiriyenko said.
Nuclear power offers a big opportunity for Russia to diversify its economy away from oil and compete in one of the few high-technology areas in which it has world-class expertise.
Rosatom accounts for one-fifth of the new reactors under construction worldwide and 17 per cent of global nuclear fuel fabrication, and aims to build a larger share in both segments. In one of its biggest foreign successes, Rosatom signed a $20bn contract this year to build four reactors in Turkey and handle fuel supplies and electricity sales from the plant. Mr Kiriyenko said the agreement was a landmark that would shape future reactor deals.
“We want to provide the whole gamut of services, not just nuclear reactors, but a guaranteed supply of fuel for the lifetime of the plants,” he said. But while its prospects look bright, Rosatom is facing competition in Russia’s traditional markets as cold war barriers that divided the nuclear industry along strategic fault lines break down.
French nuclear power group Areva is competing with Rosatom for a contract to build a reactor in the Czech Republic, while Toshiba, which bought the US Westinghouse Electric Company in 2006, is a rival for a deal in Vietnam.
Mr Kiriyenko said that Rosatom was building strategic technology and fuel supply relations with Areva and Toshiba that could pave the way for joint projects to build plants.
Rosatom also has far larger uranium enrichment capacity than it needs and is seeking international partners to share the facilities. It agreed to sell Kazakhstan a stake in an enrichment plant in exchange for uranium resources this year and is negotiating a similar deal with Ukraine.
Rosatom also wants to boost its uranium reserves.
Mr Kiriyenko was in Canada to drum up support for a deal under which ARMZ, Rosatom’s mining arm, would acquire a controlling stake in Uranium One, the Canadian uranium and gold producer.
Although initially greeted coolly, the deal was overwhelmingly approved by Uranium One’s shareholders yesterday.
Russia has plentiful uranium reserves, but the Uranium One acquisition will provide ARMZ with access to lower-cost production in Africa, Australia and Kazakhstan in time to meet an expected surge in demand as new plants come on line.
New uranium sources will help fill a gap in the market left by the expiry in 2013 of a deal under which Russia has supplied the US with spent fuel from dismantled bombs since the mid-1990s.
Mr Kiriyenko said that the expiry of the “Megatons for Megawatts” deal that was fuelling one in 10 US light bulbs would not extinguish nuclear ties between the two former cold war foes.
Approval of a US-Russian agreement for peaceful nuclear co-operation submitted to the US Congress in May could set the stage for broader collaboration between the two countries to trade nuclear materials, technology and services.
“We have already contracted to sell $5bn worth of uranium to the US,” Mr Kiriyenko said. “We are in talks with US utilities to sign agreements to 2020 and beyond.”

The Financial Times