Canada Going Nuclear…

One of Canada’s crown corporations, (which means it is government owned), is hoping to drum up billions of dollars on three business projects in one of South America’s hottest emerging economies. The government agency in question is Atomic Energy of Canada Ltd., and one of the projects involves building a brand new 740-megawatt nuclear reactor complex in Argentina.

The feasibility study has already been completed, obviously resulting in a favorable recommendation. If and when things progress to the construction and development phase, more than half the work would be done by the Argentines, while Canada would contribute the equipment and technology. Once the project is completed, the complex should come online in 2015.

The other two projects involve the overhaul of an old nuclear reactor complex that went online a while back in 1983, and project management, technology and engineering support to finish building the reactor originally provided by Germany’s Siemens. Note that during the last bout of Argentina’s economic mayhem, which lasted from 1999 to 2002, peaking in 2001 when the entire country went bankrupt, the joint venture with Siemens was halted at about 80% completion.

But, “Don’t cry for […] Argentina.” No wonder the country’s economic system collapsed, considering the political turmoil and the exorbitantly high financial and human price the country had paid to free itself from decades of military and other kind of dictatorship.

But, with such stressful history finally behind it, it seems Argentina is becoming once more an emerging market that the West should be paying more attention to. The country’s economy has gained significant momentum, (the country’s GDP currently stands at about eight percent), and among other national priorities, the country’s government has vowed to revamp its entire energy sector.

According to government sources, the entire nuclear energy package will come at a price of more than $3.0 billion over the next eight or so years. Broken down by projects, the completion of the Germany reactor will cost about $700.0 million and is expected to come online in 2010, refurbishing of the old reactor from 1983 will cost about $400.0 million and is expected to extend the reactor’s life for another three decades, while building of the new plant is expected to eat up more than $2.0 billion.

The only glitch we see with this story is an old woe of Canada’s crown corporations–labor stoppages. Atomic Energy of Canada Ltd. is a crown corporation and, as such, its engineers and scientists are organized in labor unions. Earlier this week, one of the key laboratories voted to go on strike if more than three months of contract renegotiations end up flushed down the toilet. Hopefully, with more money on the table, labor negotiations could be resolved to everyone’s satisfaction.