Areva - Reference Document 2016

06

BUSINESS OVERVIEW

6.4 Operations

In 2015, the nuclear safety authority ASN approved AREVA’s request to extend the operation of the Comurhex I production plant until the end of 2017. This will reduce the duration of the non-production phase, with integrated startup of Comurhex II at both sites slated for the end of 2018. The backlog in the enrichment business offers more than 10 years of visibility. Given the known operating period of current reactors, the conversion and enrichment markets should see growth in volume by 2030. The sharp upturn in demand in Asia should largely offset a decline in demand in Europe. The Georges Besse II plant reached full production capacity at the end of 2016, strengthening the return on investment for the future through implementation of operational and commercial levers. BACK END NewCo’s Back End operations combine the recycling, nuclear logistics, dismantling and services, and waste management operations. 6.4.1.3.

SPOT AND LONG-TERM SWU PRICES FROM 2005 TO 2015 (IN CURRENT US DOLLARS)

US

180

160

140

120

100

80

60

40

20

0

Key figures

Jan. 07

Jan. 09

Jan. 10

Jan. 11

Jan. 12

Jan. 16

Jan. 05

Jan. 06

Jan. 08

Jan. 13

Jan. 14

Jan. 15

Dec. 16

2016

2015

Spot SWU

LT SWU

Revenue* (in millions of euros)

1,523

1,593 (184)

Source: UxC.

65

Operating income (in millions of euros)

Workforce at year end**

10,941

11,050

Outlook and development goals One of the strategic objectives for the operations in the front end of the cycle is to strengthen AREVA’s position as a major player in the global conversion market. It will continue to benefit from the integration of the group’s Front End operations and its physical proximity to Europe’s enrichment plants. To achieve this goal, AREVA decided in 2007 to replace its uranium conversion production capabilities by investing in a new conversion plant at the Malvési and Tricastin sites; this is known as the Comurhex II project. The new plant will have a full production capacity of 15,000 metric tons, with the possibility of increasing capacity later to 21,000 metric tons if, and only if, market conditions permit. At this point, Comurhex II is the only new conversion plant project to be launched in the world. It will replace the existing capacity of Comurhex I. The Comurhex II plant is designed to offer maximum security of supply to our customers. In addition, it meets themost recent safety standards, particularly in terms of its ability to withstand earthquakes and flooding. Comurhex II also received triple ISO 9001, ISO 14001 and OHSAS 18001 certification. Recently, the plant demonstrated its energy efficiency innovations when it received ISO 50001 certification for using the heat produced by electrolysis to heat the buildings. With Comurhex II, the environmental footprint will decrease considerably: p 75% reduction in ammonia releases, 50% reduction in nitric acid and fluorine, and 60% reduction in potassium hydroxide, thanks to the Isoflash process; p at the Malvési site with the continued ramp-up of industrial production following the qualification of the UF 4 produced by the new thermal denitration process, which replaced chemical denitration; p at the Tricastin site, with the continued construction of the fluorination, effluent treatment and utilities functions. The fluorination building entered the testing phase in the early autumn. p 90% reduction in the annual consumption of water. The Comurhex II project continued in 2016:

* Contribution to consolidated revenue. ** Workforce consistent with the breakdown by operation shown in Chapter 17, Employees.

6.4.1.3.1.

Recycling

Businesses The Recycling business uses processes allowing its customers to recycle used fuel into fresh fuel and to package final waste in standardized containers in a safe and stable manner. The Recycling business earns a return internationally on the technical and industrial expertise developed in its facilities and the know-how acquired by the Dismantling and Services business at the sites of the group and of its French customers. In particular, it designs and builds new recycling plants in the framework of international partnerships with countries seeking to acquire their own production plants. After nuclear fuel has been used in a light water reactor, 95 to 96% of its content is material that is still recyclable: 1% is plutonium and 94 to 95% is uranium. The first step in fuel recycling is to separate these reusable materials from the final waste. The latter is packaged in “universal waste canisters” for safe storage and transportation. This package is designed for high integrity and containment performance for purposes of geologic disposal. Following the treatment stage, the reusable materials are recovered for recycling. Depending on the utility’s strategy, the recycled, re-enriched uranium from used fuel treatment, also called RepU, may be recycled in the form of enriched recycled uranium fuel (ERU), or stored in stable form, constituting a uranium stockpile. The plutonium is used to fabricate another type of fuel, MOX, of which AREVA is the world’s leading producer.

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2016 AREVA REFERENCE DOCUMENT