Areva Group will spin off its uranium mining unit in a deal between Areva and Electricite de France (EDF) brokered by France’s nuclear policy council.
The French government owns 80 percent of EDF and about 90 percent of Areva. In an effort to smooth over disputes between the two companies, the council also announced Monday they will work together with GDF Suez to develop a new reactor.
French President Nicolas Sarkozy, who heads the council, issued a statement Monday saying "beyond the supply of products and services for existing and future facilities, this partnership could include the building of new EPR (reactors), the joint development of a medium-sized 1,000 megawatt reactor."
The council’s announcement follows a public clash between Areva and EDF executives dating back to late 2009 when a contract in Abu Dhabi fell through. Technical problems and delays in other projects have damaged the French nuclear industry’s image and drawn the concern of French politicians.
Areva’s new subsidiary for uranium mining was conceived to ease competitive friction between the company and EDF. A Reuters report cited analysts’ estimates of 5 billion to 8 billion euros ($6.83 billion to $10.93 billion) for the mining unit. The council indicated Areva and EDG will sign an agreement addressing the subsidiary’s creation by this summer.