Areva Slumps as Japan Accident Raises Doubts on Nuclear Future – Bloomberg

France’s Areva SA, largest provider
of nuclear equipment and services, fell the most in more than
two years after an earthquake and explosions at Japanese atomic
power plants raised concerns about expansion in the industry.

French Environment Minister Nathalie Kosciusko-Morizet
backed the nation’s reliance on nuclear power. Lawmakers and
industry executives in nations including India, the U.S.,
Germany and the U.K. have called for reviews of atomic safety
procedures as Japan deals with the worst nuclear accident since
the 1986 Chernobyl disaster in Ukraine.

France has 58 reactors, more than any country other than
the U.S. There are 442 reactors supplying about 15 percent of
the world’s electricity, according to the London-based World
Nuclear Association.
There are plans to build more than 155
reactors, mainly in Asia. Sixty five reactors are under
construction, the association said on its website. Japan
accounted for 7 percent of Areva’s revenue in 2010, and 4.7
percent of its backlog, Areva spokeswoman Patrica Marie said.

“The group could be severely impacted by a shift in
momentum in the nuclear industry,” Alex Barnett, an analyst at
Jefferies International Ltd., wrote in a research note today.
“The severe nuclear incident in Japan has put a global nuclear
renaissance into question.”

Investment certificates for Paris-based Areva, in which the
state holds 85.7 percent, fell as much as 10.4 percent, the
biggest drop since November 2008. The non-voting shares were
down 3.12 euros, or 9 percent, to 31.73 euros at 12:22 p.m. in
Paris trading. Electricite de France SA, the world’s largest
operator of reactors, slumped to its lowest in almost two years.

China Sales

Areva is trying to complete the sale of two reactors plus
nuclear fuel to India, and of two other reactors in China. The
Paris-based company is providing equipment for four reactors
being built in France, Finland and China, and is competing to
sell as many as 10 reactors in the U.K., which plans to start
replacing old plants in the next decade. The company is also
bidding for nuclear business in countries including Italy.

India, which had been planning to increase its nuclear
power generation, will reconsider its expansion in the wake of
the Japanese accident, Nuclear Power Corp. of India said.

“This event may be a big dampener for our program,”
Shreyans Kumar Jain, chairman of India’s state-run monopoly
producer, said by phone from Mumbai yesterday.

In December Areva and NPCIL signed a preliminary agreement
for the construction of two reactors, the first of a series of
six at Jaitapur in western India.

Order Delays

“Areva could see some delays in orders” including
Jaitapur, Louis Boujard, an analyst at Aurel-BGC in Paris, wrote
in a note today.

China may also weigh the effects of the accident as it
completes its energy plans, Xie Zhenhua, vice chairman of the
National Development and Reform Commission, said in Beijing
yesterday. China plans to triple its number of reactors,
according to the World Nuclear Association.

The pace of the country’s nuclear development won’t be
affected by events in Japan, China National Nuclear Corp.
President Sun Qin said in an interview in Beijing today.

France will continue to rely on nuclear power, Kosciusko-
Morizet told Europe 1 radio today.

“We can’t switch to renewables overnight,” Kosciusko-
Morizet said. “For the foreseeable future, we will need
nuclear.” EDF is building its 59th reactor and plans a 60th in
coming years.

The U.S., where Areva is building a nuclear-fuel recycling
plant and has a joint venture to build reactor parts, should
slow construction of new plants until officials can assess
whether the Japan situation signals a need for more safety
measures, said Senator Joseph Lieberman of Connecticut, an
independent who heads the Homeland Security Committee.

To contact the reporter on this story:
Francois de Beaupuy in Paris at
[email protected].

To contact the editor responsible for this story:
Benedikt Kammel at
[email protected]

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