ECONOMICS OF BNFL'S PLUTONIUM MOX FUEL WORSE THAN 12 MONTHS AGO WARNS REPORT AS UK GOVERNMENT CONSIDERS LICENSING NEW MOX PLANT

4 June 2001

LONDON - A new report submitted to the British government warns that the economic prospects for British Nuclear Fuels' (BNFL) plutonium MOX fuel business has further declined in the last 12 months.

The report concludes that estimated future income for the Sellafield MOX Plant (SMP) has declined as a result of a fall in expected prices, as well as an increase in actual and expected operating costs. In addition BNFL's relationship with its key potential customers in Japan has not recovered from the 1999-2000 falsification scandal.

The report was written by economist Dr Mike Sadnicki for Friends of the Earth and Greenpeace UK, and was submitted as evidence to the UK Department of Environment, Transport and the Regions (DETR) consultation process on the licensing of BNFL's SMP.

The report was completed before citizens in a local referendum, held in Japan last week, voted to oppose the loading of MOX fuel in a reactor operated by Tokyo Electric Power Company. Following the referendum executives from the company agreed to abandon plans to load MOX fuel this year.

The main findings in this latest assessment of the BNFL's MOX business are:

· Poor commercial prospects for MOX fuel mean that separated plutonium will continue to have no commercial value; · BNFL have significantly increased the amount they are seeking to "write-off" for the SMP from £300 million in 1999, to £462 million in 2000; · An additional £113 million is to be paid by BNFL to Kansai Electric and to cover transportation costs for the return of the falsified MOX fuel shipped to Japan in 1999; · In the last 18 months there has been a dramatic increase in estimated operating costs, up to 30%, following the commencement of uranium commissioning; · Transport costs of tens of millions of dollars for potential Japanese clients are a further disincentive for business with BNFL; · Estimated decommissioning costs for the SMP have increased substantially from £50 million in 1999, to £92 million in 2001, with the prospect of further increases likely; · Reprocessing and MOX fuel is not economically viable in the face of far cheaper alternatives such as dry storage of spent fuel and conventional uranium fuel.

"BNFL's prospects are even worse today than they were last year. Even before their MOX plant is opened their operating costs have risen by tens of millions," said Shaun Burnie of Greenpeace International. "The economic case they put forward to justify the licensing of the SMP is deeply flawed. This report is as much a warning to BNFL's overseas clients as it is to the British government - BNFL's MOX is an economic nonsense."

As a consequence of a flawed public consultation process and the acceptance by the UK government of BNFL's demand to write-off construction and operational costs to November 2000, Friends of the Earth (UK) backed by Greenpeace have filed a legal action against the UK government seeking a judicial review.

FOR FURTHER INFORMATION PLEASE CONTACT:
For further information:
Shaun Burnie: +44 12257 814 288

The Sadnicki report can be obtained at www.britishnuclearfuels.com, a Greenpeace established website intended to provide the information that BNFL refuses to disclose.