Trekkopje continues to haunt Areva fortunes

AREVA’S fortunes have continued to be haunted by its Trekkopje uranium operations in Namibia with losses from the operation featuring prominently in Areva’s 2004 annual report released in Paris yesterday.

Areva said the the write-down of Trekkopje mining assets amounted to US$100 million (about N$1,7 billion) following revision of natural uranium price forecasts used by Areva.

The French firm said in 2012 it had placed Trekkopje under a care and maintenance programme due to a drop in uranium prices following the 2011 Fukushima disaster in Japan.

Areva said it would cut US$1,12 billion costs, boost its partnership with utility EDF, the Britsh energy company and expand in China in an attempt to turn around the loss.

Areva’s 2014 net loss rose to to 4,83 billion euros, slightly below the unaudited 4,9 billion announced last month.

The company is expected to announce a three-year financing plan before publication of first-half results on 30 July.

Areva expects world nuclear generating capacity to rise by 50% by 2030, led by Asia, according to available estimates.

Areva’s board under the chairmanship of Philippe Varin approved the financial statements.

Concerning the financial results, Varin said the group must now follow the road to recovery by making substantial sacrifices.

Philippe Knoche, chief executive officer said the scale of the net loss for 2014 illustrates the twofold challenge confronting the company;continuing stagnation of the nuclear operations, lack of competitiveness and difficulties in managing the risks inherent in large projects.

“The group understands how serious this situation is. A comprehensive strategic review of operations was undertaken beginning in November and is being carried out without compromise,” said Knoche.

Areva said the transformation plan sets a challenging but economically realistic course for its operations.

The company said it will refocus on its core business; mastery of key nuclear processes essential to operators around the globe.

“This strategic redeployment will lead to the revision of certain goals, whether in the management of new reactor projects or in renewable energies. Areva’s objective is to achieve excellence as a high value-added supplier of products and services,” the firm said.

Secondly, Areva said resources had been marshalled to support a spurt of growth in nuclear power, and must now adapt to new market realities and become competitive once again.

The group’s most urgent task was recovery and securing its future by immediately launching a far-reaching competitiveness plan.

In 2012, it was reported that Areva may have been a fraud victim in its U$2,5 billion deal to buy UraMin, whose principal asset was the Trekkopje uranium mining project in Namibia, the French press reported then.