February 9, 2011
NRU helps put Nordion
back in black
by Terry Myers
The restart of the NRU
reactor has been good for business - at least as far as Nordion goes.
Nordion is the private company, once part of Atomic Energy of Canada
Ltd, that processes and sells the medical isotopes produced at Chalk
River.
In the company's fourth quarter financial results, released late last
month, Nordion notes that it made a profit of $9.3 million in the three
months ending October 31, 2010, compared to a loss of more than $18
million in the same period the year before.
The return of NRU was a major factor in the turnaround, the company
said.
“The restart of the NRU reactor was a major event for Nordion in the
fourth quarter of fiscal 2010. It supported the company's return as a
key player in the Mo-99 supply chain and as an important partner to its
customers.”
According to its year-end report, Nordion had isotope revenues of
almost $58 million last year, with a profit of about $4 million.
That compares to revenues of more than $120 million and a profit of $45
million in 2008, the last full year before NRU was shut down for 15
months due to a heavy water leak from the reactor vessel.
Nordion says the current “medical isotope landscape” is “significantly
different when compared with the landscape Nordion operated in prior to
the NRU reactor shutdown in May 2009.”
“These changes created uncertainty in the medical isotope market, in
general, and has specifically impacted Nordion.
“Several factors... have affected key drivers of the company's
profitability of its medical isotopes segment, including pricing and
demand for medical isotopes, and in particular, for Mo-99”
(Molybdenum-99) produced at Chalk River.
Nordion recently announced a deal to extend its contract with Lantheus
Medical Imaging, its major customer for Mo-99.
“Dynamics have changed in the medical isotope market. Customers
have diversified their supply sources to reduce their reliance on
single source supply during extended shortages, such as recently
experienced," Steve West, Nordion CEO, said in the announcement.
“The extension of this contract with Lantheus provides us with a
three-year demand projection while market activities settle and
requirements level out.”
Members of the Canadian Nuclear Safety Commission questioned AECL about
its production of isotopes during a meeting January 20.
Vice-president and chief nuclear officer Hank Drumhiller said isotope
production at Chalk River is about half of what it was before the NRU
shutdown.
Commission member Alan Graham wondered how AECL is planning for the end
of isotope production in 2016. Is that a firm date, and will AECL “ramp
down” its production or just stop at a given time?
Drumhiller said the company expects that isotope production will end in
2016.
“That is the decision the government has made,” he said, but the
details of how that will happen “have not been developed yet.”
As far as operations beyond 2016, NRU does have three missions,
Drumhiller added.
Along with isotope production, the reactor is also used for “pure
research” by the neutron scattering community through the National
Research Council, and it also provides research “to support the Candu
(power reactor) operations.”
“That will continue and be ongoing beyond 2016,” he said.
In notes prepared for the federal Minister of Natural Resources in
2008, it was estimated that AECL was losing about $50 million a year on
the isotope business.
The company’s gross profit was “marginally positive,” at about $10
million, but that is “more than offset by the incremental waste
liabilities that AECL incurs by continued operations.”
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