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Necsa presentation to Minerals and Necsa presentation to Minerals and Energy Portfolio CommitteeEnergy Portfolio Committee
22 August 200722 August 2007
Rob AdamRob AdamChief Executive OfficerChief Executive Officer
South African Nuclear Energy Corporation (Necsa)South African Nuclear Energy Corporation (Necsa)
Presentation PlanPresentation Plan
• 2007 Statement by President Mbeki
• History of Necsa
• Necsa Group &Corporate Structures
• Examples of recent technology successes - NTP & Pelchem
• Necsa in the National Nuclear Energy Policy & the National
Industrial Policy
• Potential Necsa contribution to a future South African
Uranium/Nuclear industry.
• Budget request for 2008/09
““State of the Nation Address”State of the Nation Address”09 February 200709 February 2007
• President Mbeki stated, “with regard to energy, we will also expedite our work to ensure greater reliance on nuclear power generation, natural gas and the various forms of renewable sources of energy”
Development of SA Nuclear Industry:Research Era - 1959 onwards
•The Atomic Energy Board (AEB) instituted as a research organization
• Basic nuclear research & South Africa’s national nuclear authority
• Four point nuclear research and development programme.
Development and refinement of the SA’s nuclear raw materialsPromotion of nuclear powerDevelopment and utilisation of nuclear technology in industry, medicine, agriculture and for researchBasic research in support of above
Uranium Ore
Development of strategic competence 1969 – 1989
[PMG note: photos not included]
Uranium Enrichment
Fuel fabrication
Weapons programme
NECSA GROUP STRUCTURE
Necsa
Share Holding 100 % Share Holding 100 % Share Holding 51 %
Pelchem (Pty) Ltd NTP Radioisotopes (Pty) Ltd Arecsa Human Capital (Pty) Ltd
Holding 90% Fluoro Pack (Pty) Ltd Share Holding 90% Cyclotope (Pty) Ltd
Share Holding 55%
Share Holding 40%
AEC Amersham (Pty) Ltd
Pharmatopes (Pty) Ltd
40 %
NTP Radioisotopes (Pty) Ltd
a subsidiary of Necsa Ltd.
www.ntp.co.za
Reliable suppliers of world-class radiochemicals, Reliable suppliers of world-class radiochemicals, radiopharmaceuticals and radioisotope products to radiopharmaceuticals and radioisotope products to
Health Care, Life Science and Industrial Markets Health Care, Life Science and Industrial Markets throughout the world.throughout the world.
NTP Product Groups
• RADIOCHEMICALS: RADIOCHEMICALS: Mo-99, I-131, P-32, S-35, P-33, Y-90Mo-99, I-131, P-32, S-35, P-33, Y-90
• RADIOACTIVE SOURCES: RADIOACTIVE SOURCES: Ir-192, Cs-137Ir-192, Cs-137
• IRRADIATION SERVICES: IRRADIATION SERVICES: Neutron Transmutation doping of Silicon,Neutron Transmutation doping of Silicon,
Neutron Irradiation ServicesNeutron Irradiation Services
• RADIOPHARMACEUTICALS: RADIOPHARMACEUTICALS: PELTEK-F Tc99-m Generator, PELTEK-F Tc99-m Generator,
Labelling Kits, I-131 Capsules and SolutionLabelling Kits, I-131 Capsules and Solution
• RADIATION TECHNOLOGY PRODUCTS: RADIATION TECHNOLOGY PRODUCTS: Radioluminescent lightRadioluminescent light
sources, Contract Manufacturing and Consulting, Transportsources, Contract Manufacturing and Consulting, Transport
containers, Dosimetry servicecontainers, Dosimetry service
Radiochemical73%
Radiation Services11%
Radiation Technology Products
2%
Sealed Sources7%
Radiopharmaceuticals8%
NTP Sales Revenue
NTP Sales Per Year: Constant Rand Value
0
20
40
60
80
100
120
140
160
180
200
Year
Sal
es (M
R)
Sales 63 77 86 105 113 140 157 188
99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07
UraniumMining/milling
Nuclear cycle Fluorspar beneficiation
Fluorsparmining
Conversion
Hydrogen fluoride
EnrichmentFluorine
Higher valueproducts
Etc.Etc.
Fluorochemicals
Fuel fabrication
Pelchem’s Mandate
• Secure supply of HF and F2 for nuclear program• Champion government’s Fluorochemical Expansion
Initiative (FEI)• Build non-uranium fluorochemical portfolio into
sustainable business• Compliance with regulatory and stakeholder
requirements• Deliver what is promised responsibly and safely on
schedule within specification and cost competitively
Financial Performance
Pelchem
0
20
40
60
80
100
120
140
160
180
2008 2009 2010
Financial Year
Mill
ion
Ran
ds
Income
Expenses
Drivers for investment in nuclear infrastructure in South Africa
• Diversification from almost exclusive (90%+) reliance on coal leads to decision to limit coal contribution to new build to 50%.
• Geographic factors in Western Cape & Eastern Cape rule out other base-load generation sources, i.e. no local coal or hydro present and gas operation is very expensive .
• Costing over the 60 year life time of power stations in a world that is rejecting un-sequestrated carbon means nuclear comes out cheaper, even in other regions of SA.
• Long term uranium price buoyancy means nuclear fuel cycle investment is attractive and may be needed to underpin security of supply.
Necsa in the National Nuclear Energy Policy & Strategy,
the National Industrial Policy & the National R&D Strategy
● Anchor for nuclear R&D.● Uranium conversion.● Uranium enrichment.● Nuclear fuel manufacture● Study of spent fuel reprocessing.
● Nuclear Manufacturing.
● “Frontier” research programmes.
NNEP - DME
NIP - the DTI
NRDS - DST
Uranium supply and demand
UxC
Supplier & utilitystockpiles
Productionfrom existing
mines
New mines
Mine expansions?
Russian HEU?Russian HEU downblend; US govt stockpiles; recoveries
WNA upper case
WNA base case
Planned Uranium Production in South Africa
0
1000
2000
3000
4000
5000
tpa
AnglogoldUranium 11st UraniumTotal
Details of the Forecast Shortage of Enrichment & Uranium in 2015.2015: Uranium and SWU required and
available in Western markets.
50
60
70
80
90
100
30 40 50 60 70 80
MSWU/year
Ura
niu
m, '0
00
ton
/ye
ar
Existing and
Planned SWU and
U
Requirements
• There is an imminent, global shortage of both conversion and enrichment capacity.
• Security of nuclear fuel supply is a matter of concern for any country embarking on a major build programme.
• Conversion and enrichment therefore need to be carefully examined.
• Although there is currently global over-capacity in fuel manufacture, this cannot be relied upon to continue.
• Ultimately the industry will move towards a closed fuel cycle. Therefore spent fuel reprocessing must be investigated.
Possibilities for fuel cycle in South Africa
Possibilities for High-tech Manufacturing
• Existing capacity in local industry stimulated by PBMR.
• Government intervention via Necsa yields National Nuclear Manufacturing Centre, intended to develop standards and capacity.
• Need to develop localization strategy aligned with preferred bidder(-s) for new nuclear build.
• Dual approach based on selected LWR component manufacture under license and PBMR spectrum.
Strategic R&D Focuses
• Isotope production
• Interface between nuclear and biotech
• Generation 4 nuclear reactors
• Hydrogen economy
• Spent fuel management
NECSA GOVERNMENT GRANT FOR ACTIVITIES APPENDIX B
0
200
400
600
800
1000
1200
1400
1600
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2006 BUDGETREAL REDUCTION IN STATE DEPENDENCE (2005 RAND VALUE)2006 BUDGETREAL REDUCTION IN STATE DEPENDENCE (2005 RAND VALUE)
% = YEAR - ON - YEAR REDUCTION IN STATE DEPENDENCE
CLOSURE OF
NON-VIABLE
ACTIVITIES
PHASE 1 PHASE 2PHASE 3OUTSOURCING AND
NEW STRUCTURAL
DESIGNCOMMERCIAL TURN-
OVER AND FOCUS ERAPHASE 4 DUAL VIABILITY AND STABILITY
-15%
-34%
-20%-10%
-17%-18%
-16%-16%-14%-28%
NOTE: D & D EXCLUDED
R' MILLION
-17% -1%-4%2% 38% 4% 10% -3%-1%
Capital & Infrastructure ProjectsPriorities
• Pelindaba Site & Infrastructure Projects: Pelindaba Buildings, Infrastructure Effluent System &
Facilities Security Upgrade
• Nuclear Fuel Cycle Projects: Conversion and Enrichment, EURO Project
• R&D Capacity Projects: SAFARI Equipment Upgrade, R&D Capacity
Proposed MTEF AdjustmentOperational Funding (VAT Incl)
2009
MR
2010
MR
2011
MR
CURRENT
MTEF
389,4 429,3 451,1
Additional
Operational
302,0 358,0 442,4
MTEF
Proposed
691,4 787,3 893,5
Summary• South Africa has very large reserves of uranium and a very
active mining industry on which many other countries will rely for their supplies of uranium.
• South Africa can add value to the uranium that it produces by enriching it, in order to maximize its earnings in export markets.
• Necsa has already developed and used substantial facilities for the conversion and enrichment of uranium. These were dismantled but the expertise was developed and still exists in South Africa.
• Necsa also built a nuclear fuel fabrication factory and a plant for making zircaloy tubing.
Overall Conclusions
• South Africa will significantly increase its nuclear power capacity over the next 20 years.
• This will provide an impetus for a local nuclear industry with many new job opportunities.
• The local mining and manufacturing industries are likely to partner with local and foreign nuclear players to create this industry.
• Necsa needs to be rebuilt to play a pivotal role in this programme.