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Most of the buildings required for the commercial plant were constructed in Piketon during the 1980s by DOE. These existing structures include a centrifuge assembly building, a uranium feed and withdrawal facility, and two enrichment production buildings.
USEC began renovating and building the American Centrifuge Plant following receipt of a construction and operating license from the NRC in April 2007. Fluor Enterprises, Inc., a subsidiary of Fluor Corporation, has managed the engineering, procurement and construction management activities.
On August 4, 2009, DOE and USEC announced an agreement to delay a final review of USEC’s loan guarantee application for the American Centrifuge project. As a result, USEC demobilized the American Centrifuge project in order to preserve liquidity. Construction work on the plant infrastructure and finalizing the balance-of-plant design ceased in August 2009. The plant design work, which is about 80 percent complete, would be resumed following a decision to remobilize the project. Machine part manufacturing efforts have also been sharply reduced.
Construction of the American Centrifuge Plant was expected to result in more than 800 construction jobs and more than 2,000 indirect jobs in the local community at its peak.
When completed, the plant would employ more than 400 workers at full production and would support more than 1,000 indirect jobs in the community.
USEC needs to raise significant additional financing to complete construction of the American Centrifuge Plant and USEC has reduced the scope of project activities that were underway in 2009 until USEC has that financing.
USEC believes a loan guarantee under the DOE Loan Guarantee Program is critical to raising the capital needed to complete the American Centrifuge Plant. The DOE Loan Guarantee Program was created by the Energy Policy Act of 2005 and in December 2007, federal legislation authorized funding levels of up to $2 billion for advanced facilities for the front end of the nuclear fuel cycle, which includes uranium enrichment. DOE subsequently reallocated an additional $2 billion in loan guarantee authority to the front-end nuclear facilities loan guarantee solicitation.
In July 2008, USEC applied to the DOE Loan Guarantee Program for $2 billion in U.S. government guaranteed debt financing for the ACP. Areva, a company more than 90% owned by the French government, also applied for $2 billion of U.S. government guaranteed financing under this program for a proposed plant in the United States. DOE announced in May 2010 that it has provided Areva with a conditional commitment for a loan guarantee from the reallocated funding authority. DOE has said that $2 billion in funding for projects in the front end of the nuclear fuel cycle remains available but USEC has no assurance that a DOE loan guarantee will be made available to USEC.
In August 2009, DOE and USEC announced an agreement to delay a final review of USEC’s loan guarantee application. Since that time, USEC has worked to address the technical and financial concerns raised by DOE. USEC submitted an update to its application in July 2010.
In May 2010, USEC announced that Toshiba Corporation and Babcock & Wilcox Investment Company, an affiliate of The Babcock & Wilcox Company, had signed a definitive agreement to make a $200 million investment in USEC. Under the terms of the agreement, Toshiba and B&W will each invest $100 million over three phases, each of which is subject to specific closing conditions. In September 2010, the companies closed on the first phase of the transaction and Toshiba and B&W made a combined $75 million investment in USEC, which the Company will use for continued progress on activities related to the American Centrifuge Plant and general corporate purposes.
To complete the project, USEC will require additional capital beyond the $2 billion DOE loan guarantee, proceeds from the investment from Toshiba and B&W and internally generated cash flow. The investment by Toshiba provides the basis to pursue credit support from Japanese export credit agencies which USEC is currently engaging to provide a portion of the remaining capital required for the project. However, USEC has no assurance that it will be successful in obtaining any or all of the financing it is seeking.
USEC continues to work with suppliers to refine its estimates and seek reductions in the project cost. The Company anticipates it will require 18 to 24 months to begin initial commercial operations upon receiving financing. USEC also anticipate that it will require 30 to 36 months to complete the plant after initial commercial operations.