USEC Provides Update on American Centrifuge Project

Author: Spencer Ogden
Date posted01/Nov/2011
Author: Spencer Ogden

USEC Inc. (NYSE:USU) today announced discussions are ongoing between the Company, the U.S. Department of Energy (DOE) and Congress regarding the American Centrifuge project.

The American Centrifuge project seeks to deploy an innovative technology developed by DOE and improved by USEC in recent years. DOE and USEC have been in discussions to work together through a Research, Development and Demonstration (RD&D) program to further reduce technical project execution and financial risks for commercializing the technology. The RD&D program is expected to involve manufacturing and operating additional production-design machines so that key systems can be tested as they would actually operate at the scale necessary for full commercialization. USEC is working together with DOE and Congress on support for the RD&D program.

In a related action, USEC’s strategic investors Babcock & Wilcox Investment Company (NYSE:BWC) and Toshiba Corporation have agreed in principle to further extend a standstill agreement related to their investment agreement through January 15, 2012, if USEC and DOE reach agreement on the framework for a RD&D program. As part of their investment in USEC, Toshiba and B&W each have a member on USEC’s board of directors.

On September 30, the Company mailed Worker Adjustment and Retraining Notification (WARN) Act notices to all of the approximately 450 USEC American Centrifuge workers in Ohio, Tennessee and Maryland informing them of a potential layoff beginning in the first half of November.

Any decision regarding continued spending or demobilizing the project will be evaluated on a day-to-day basis. However, if an agreement between USEC and DOE is not reached, actions to demobilize the project, including worker layoffs, could take effect.

USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel and nuclear industry related services for commercial nuclear power plants.