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Eye On Boise

Huge Areva cutbacks may not kill 300 of the firm’s Idaho jobs

Here's a news item from the Associated Press: BOISE, Idaho (AP) — Gov. C.L. "Butch" Otter says news that France's state-controlled nuclear giant Areva has decided to suspend plans to build a uranium enrichment plant in eastern Idaho may not be as it sounds. Areva announced Tuesday a series of job cuts and other steps to make the company profitable after a disastrous 2011. Otter Spokesman Jon Hanian says the governor met with Areva officials this week and was briefed on the company's strategy. But Hanian says the company intends to keep as many as 300 engineering, design and planning jobs already in place at the Eagle Rock Enrichment Facility near Idaho Falls. Hanian says Areva intends to fund those jobs through 2012. Areva won a license to build and operate the planned $3 billion gas centrifuge uranium enrichment plant in October.

Click below for a full report from the Associated Press.

Otter says planning jobs to remain at Idaho site
By TODD DVORAK, Associated Press

BOISE, Idaho (AP) — Gov. C.L. "Butch" Otter and other state leaders say they are confident the decision by the French nuclear power giant Areva to put the brakes on plans on a $3 billion uranium enrichment plant in eastern Idaho is more of a hiccup than a long-term blow to the regional economy.

Areva announced Tuesday a series of job cuts and other measures, including suspending plans for the Eagle Rock Enrichment Facility, to return the company to profitability in the wake of a disastrous 2011.

Otter was briefed by Areva executives this week, who told him the company intended to maintain funding next year for as many as 300 employees — including more than 40 based in Idaho — hired to engineer and design the facility planned west of Idaho Falls.

"We're cautiously optimistic," Otter spokesman Jon Hanian told The Associated Press. "It will likely mean the timeline will have to be extended and that some of the construction targets will be missed. But we were told they do not anticipate layoffs and that the people over there now will be funded through 2012."

In October, federal regulators awarded Areva a license from to build and operate the planned gas centrifuge uranium enrichment plant. The company has also received a $2 billion loan guarantee from the U.S. Department of Energy.

But on Tuesday, Areva's new chief executive Luc Oursel told a meeting of financial analysts that Areva plans to cut up to 1,500 jobs in Germany and has suspended the Eagle Rock project as part of a strategy to offset losses this year that could reach $2.12 billion.

The enrichment plant is considered a key component in the company's plans to expand production of nuclear fuel for commercial power production in the United States. A final decision on the project had been on hold pending the review of Areva's capital investments undertaken by Oursel and his new management team.

Laurence Pernot, vice president of communications for Areva North America, said the announcement should not be interpreted as a decision to abandon future plans in Idaho.

"With a growing market in the United States ... this remains a very solid and robust project and we stay committed to it," Pernot said. "This may impact the construction schedule. But we will continue to work this year on design and pre-construction activities."

The company has already bought the land and invested significant resources in hopes of beginning construction in early 2012 and to be up and running by 2014. Company officials and economists projected the construction would create several thousand jobs, 700 permanent jobs during operation and join the Idaho National Laboratory as one of the primary drivers of the eastern Idaho economy.

"It's disappointing," said Sen. Dean Mortimer, R-Idaho Falls. "But if you think about the economic environment they are in ... and the amount of investment they already have in the area ... I don't know that you just lightly throw that away. I think it will come eventually."

Mortimer and others point out that Areva made cuts everywhere, not just Idaho, in an effort to balance its books. For the company, the cuts would decrease its total investments by 34 percent from 2012 to 2016.

At the same time, the market for uranium and other nuclear related projects has grown softer across the globe, said Dan Yurman, a retired Idaho National Laboratory employee and consultant to the American Nuclear Society.

Still, Yurman argued the company has a year or two to decide to push forward on Eagle Rock or risk losing competitive advantage for selling enriched fuel. As many as five new nuclear power plants were expected to be on line in the next five years, and some could begin placing fuel orders by 2013.

Areva's main domestic competitor, New Mexico-based URENCO, has recently received permission from federal regulators to double its capacity by 2018.

Copyright 2011 The Associated Press.


Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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