-Agreements with Department of Energy Further Deployment of New U.S. Enrichment Plant-
BETHESDA, Md.--(BUSINESS WIRE)--Dec. 8, 2006--USEC Inc. (NYSE:USU) announced today the execution of agreements with the U.S. Department of Energy (DOE) for the long-term use of facilities and for the gas centrifuge technology license for its American Centrifuge Plant. The two agreements set the stage for USEC to build and operate the plant in Piketon, Ohio.
The process buildings that will house the cascades of centrifuges encompass more than 14 acres under roof. The lease for these facilities and other support-type facilities is a stand-alone amendment to the Company's current lease with DOE for the gaseous diffusion plant facilities in Piketon and in Paducah, Ky. The initial term runs through June 2009 and, at USEC's option, may be extended under specified conditions for additional five-year terms up to a date that is 36 years after the date of issuance of the construction and operating license for the commercial plant. USEC anticipates receiving the license from the U.S. Nuclear Regulatory Commission in May 2007. The Company also has the option, upon the assumption of certain demolition responsibilities, to renew the lease for up to 20 years, through 2063, at the end of the term. USEC will pay monthly rent to DOE to cover the cost of administering the lease.
The parties also signed an agreement licensing U.S. gas centrifuge technology to USEC for use in building new domestic uranium enrichment capacity. DOE originally developed the technology during the 1970s and '80s and operated hundreds of centrifuges in the process buildings USEC leases. The Company is working on improvements to the original DOE design with the intent to reduce costs and improve efficiency through the use of state-of-the-art materials, control systems, and manufacturing processes. USEC will pay royalties to the U.S. government on sales of enriched uranium from centrifuge plant production. The royalty ranges from 1 percent to 2 percent of annual gross revenue from these sales. Payments are capped at $100 million over the life of the technology license.
"Signing these agreements secures for USEC the use of the American Centrifuge Plant facilities and technology for decades to come," said John K. Welch, USEC president and chief executive officer. "We are building the American Centrifuge Plant to fuel the current and next generation of nuclear power plants worldwide, and these agreements with DOE fully support our plans."
This news release contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainty. Economic, business, market, regulatory, technology and other factors could cause USEC's actual future results to differ materially from those expressed in our forward-looking statements. More information about these factors is contained in USEC's filings with the Securities and Exchange Commission, including USEC's annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on USEC's website www.usec.com. USEC does not undertake to update its forward-looking statements except as required by law.
USEC Inc., a global energy company, is a leading supplier of enriched uranium for commercial nuclear power plants.
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SOURCE: USEC Inc.