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Since 2007, a major focus for USEC’s American Centrifuge team has been working with leading companies to create the industrial infrastructure in the United States needed to build components and supporting equipment for the highly sophisticated AC100 machines. The highly specialized U.S. manufacturing base needed to build the AC100 ceased to exist after the Department of Energy (DOE) suspended centrifuge work in 1985, but it has been re-established with USEC’s leadership.
In 2008, for example, the Company significantly refurbished a facility it purchased in Oak Ridge, Tennessee, and installed new production machining equipment, robotics, and computer controls and testing systems to support the ramp-up to manufacturing centrifuge components.
In August 2009, DOE and USEC announced an agreement to delay a final review of USEC’s loan guarantee application for the American Centrifuge Plant. As a result, USEC significantly demobilized construction and machine manufacturing activities for the American Centrifuge project in order to preserve liquidity, which has affected the manufacturing of machine parts.
USEC is working with its strategic suppliers to maintain the manufacturing infrastructure developed over the last several years. USEC wants the project to be in a position to ramp back up rapidly in the event funding is secured from the DOE Loan Guarantee Program.
USEC has contracted with B&W Clinch River, LLC, a subsidiary of the Babcock and Wilcox Co., to manufacture upper and lower suspension assemblies, cap assemblies and column parts at this facility. B&W is also responsible for assembling and balancing rotors, and procuring or manufacturing unclassified metal parts.
B&W employees have been producing the classified components at USEC’s American Centrifuge Technology and Manufacturing Center in Oak Ridge. To better integrate the process of building components and assembling the machines, in May 2009, USEC and B&W entered into a non-binding memorandum of understanding to form a joint venture that would establish a single point of responsibility to provide integrated manufacturing and assembly of the AC100 centrifuge machines. As envisioned in the memorandum of understanding, the joint venture would manage all aspects of manufacturing the AC100 machines, including supply chain management through the integration of all suppliers and subcontractors and the assembly of the machines at Piketon. On September 2, 2010, American Centrifuge Holdings, LLC (ACP Holdings), a wholly owned subsidiary of USEC, and Babcock & Wilcox Technical Services Group, Inc. (B&W TSG), a subsidiary of B&W, entered into the operating agreement for American Centrifuge Manufacturing, LLC, the manufacturing joint venture. USEC and B&W TSG also agreed on a non-binding term sheet, including pricing, for the supply by American Centrifuge Manufacturing of centrifuges and related equipment for the American Centrifuge project. The operating agreement contains conditions to effectiveness that have not yet been satisfied relating to third-party funding for the construction of the American Centrifuge Plant and the execution and delivery of agreements contemplated by the non-binding term sheet. Once the operating agreement becomes effective, American Centrifuge Manufacturing will be owned 55% by ACP Holdings and 45% by B&W TSG.
A subsidiary of Alliant Techsystems Inc., or ATK, expanded facilities it has at the Allegany Ballistics Laboratory in Rocket Center, West Virginia. It will produce the tall, carbon-fiber rotor tubes for the centrifuges.
Major Tool & Machine, Inc. has built a new automated production facility at its Indianapolis, Indiana, plant to fabricate the steel casings for the AC100 machines.
Teledyne Brown Engineering, Inc. has significantly expanded manufacturing capacity in Huntsville, Alabama, to produce gas centrifuge service modules for the ACP. These steel frame structures hold valves, cabling, ductwork and electric supply. Each service module supports up to 20 AC100 machines.
Curtiss-Wright Electro-Mechanical Corporation of Cheswick, Pennsylvania, is providing the motor drives that spin the centrifuge rotor at very high speeds.