- Operations for inventory management and site transition to continue
-
BETHESDA, Md.--(BUSINESS WIRE)--May. 24, 2013--
USEC Inc. (NYSE: USU) announced today that it had not been able to
conclude a deal for the short-term extension of uranium enrichment at
the Paducah Gaseous Diffusion Plant in Kentucky, and the company will
begin ceasing uranium enrichment at the end of May. The Paducah plant is
the only U.S.-owned and operated uranium enrichment facility in the
United States. USEC leases the plant from the U.S. Department of Energy
(DOE).
“While we have pursued possible opportunities for continuing enrichment,
DOE has concluded that there were not sufficient benefits to the
taxpayers to extend enrichment. I am extremely disappointed to say we
must now begin to take steps to cease enrichment,” said Robert Van
Namen, USEC senior vice president and chief operating officer.
“We will continue to meet our customers’ orders from our existing
inventory, purchases from Russia under the historic Megatons to
Megawatts program and our transitional supply contract with Russia that
runs through 2022,” Van Namen said. “In addition, our work to
commercialize the American Centrifuge technology continues through our
research, development and demonstration program with DOE, which remains
on schedule and within budget, as we remain on a path to deploy this
critical technology.”
USEC will take steps to cease enrichment at the Paducah plant over the
next month and to prepare the plant site for return to DOE. USEC expects
to continue operations at the site into 2014 in order to manage
inventory, continue to meet customer orders and to meet the turnover
requirements of its lease with DOE.
“We will be working with DOE during the coming months and expect to
reach agreement on how to best transition the site. The company and our
workforce have unparalleled expertise that should be drawn on. We can
provide significant value to the government in making that transition in
the most cost-effective and timely manner,” Van Namen said.
USEC expects to begin reducing its workforce at the plant in the coming
months. The Company will begin notifying workers as the specifics of the
transition activities are defined. USEC anticipates maintaining a
workforce at the site into next year to support ongoing operations,
perform transition activities and meet regulatory requirements.
“We want to thank our employees and the entire Paducah community for
their efforts to support continued enrichment at the plant. Although the
community has known about this possibility for a number of years, we
recognize that the Paducah area will soon feel the real impact of this
decision and its effects on many individuals and families,” said Steve
Penrod, vice president of enrichment operations.
“For 60 years, Paducah employees and the community have supported our
national security and energy security. For now, at least, that mission
is ending, but we are committed to working with the community and DOE
for the smoothest possible transition that positions the plant site for
its future role in the area’s economy.
“We want to thank members of the Kentucky delegation and our unions, the
United Steel Workers and the Security, Police & Fire Protection
Professionals, all of whom have worked tirelessly on behalf of the
employees at this plant. We fully expect they will now recommit to
helping the community create the next economic chapter for this site.”
USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel for commercial nuclear power plants.
Forward-Looking Statements:
This news release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934 – that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as “expects”, “anticipates”,
“intends”, “plans”, “believes”, “will” and other words of similar
meaning. Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. For USEC, particular risks and
uncertainties that could cause our actual future results to differ
materially from those expressed in our forward-looking statements
include, but are not limited to: risks related to the ongoing transition
of our business, including uncertainty regarding the transition of the
Paducah gaseous diffusion plant and uncertainty regarding continued
funding for the American Centrifuge project; the expiration of our
agreement with Energy Northwest on May 31, 2013 and the impact of
actions we will need to take to transition the Paducah gaseous diffusion
plant; our ability to reach an agreement with DOE regarding the
transition of the Paducah gaseous diffusion plant and uncertatinties
regarding the transition costs related to USEC ceasing enrichment at the
Paducah gaseous diffusion plant; risks related to the underfunding of
our defined benefit pension plans and the impact of the potential
requirement for us to place an amount in escrow or purchase a bond with
respect to such underfunding; the continued impact of the March 2011
earthquake and tsunami in Japan on the nuclear industry and on our
business, results of operations and prospects; the impact and potential
extended duration of the current supply/demand imbalance in the market
for LEU; our ability to manage the transition costs and other impacts of
ceasing enrichment at Paducah; uncertainty regarding the timing, amount
and availability of additional funding for the RD&D program and the
dependency of government funding on Congressional appropriations;
restrictions in our credit facility on our spending on the American
Centrifuge project and the potential for us to demobilize the project;
limitations on our ability to provide any required cost sharing under
the RD&D program; uncertainty concerning our ability through the RD&D
program to demonstrate the technical and financial readiness of the
centrifuge technology for commercialization; uncertainty concerning the
ultimate success of our efforts to obtain a loan guarantee from DOE and
other financing for the American Centrifuge project and the timing and
terms thereof; potential changes in our anticipated ownership of or role
in the American Centrifuge project, including as a result of the need to
raise additional capital to finance the project; the impact of actions
we have taken or may take to reduce spending on the American Centrifuge
project, including the potential loss of key suppliers and employees,
and impacts to cost and schedule; the impact of delays in the American
Centrifuge project and uncertainty regarding our ability to remobilize
the project; the potential for DOE to seek to terminate or exercise its
remedies under the RD&D cooperative agreement or the June 2002 DOE-USEC
agreement; changes in U.S. government priorities and the availability of
government funding, including loan guarantees; restrictions in our
credit facility that may impact our operating and financial flexibility;
our dependence on deliveries of LEU from Russia under a commercial
agreement with a Russian government entity known as Techsnabexport that
expires in 2013 and under a new commercial supply agreement with Russia
(the Russian Supply Agreement) and limitations on our ability to import
the Russian LEU we buy under the Russian Supply Agreement into the
United States and other countries; pricing trends and demand in the
uranium and enrichment markets and their impact on our profitability;
the impact of government regulation by DOE and the U.S. Nuclear
Regulatory Commission; the competitive environment for our products and
services; changes in the nuclear energy industry; and other risks and
uncertainties discussed in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K and quarterly
reports on Form 10-Q, which are available on our website at www.usec.com.
We do not undertake to update our forward-looking statements except as
required by law.
Source: USEC Inc.
USEC Inc.
Media: Paul Jacobson, 301-564-3399
Investors:
Steven Wingfield, 301-564-3354
