French nuclear reactor builder AREVA and machinery giant Mitsubishi Heavy Industries (MHI) announced early last week they would join forces with others to design, develop, fabricate, and supply nuclear fuel to Japanese customers, while confirming their intent to jointly invest in a dedicated U.S. nuclear fuel fabrication facility.

AREVA and MHI have signed a four-party agreement with Mitsubishi Materials Corp. (MMC) and Mitsubishi Corp. (MC) toward the establishment of a joint company. That new company will supply Japanese customers with uranium fuel assemblies for pressurized water reactors (PWR), boiling water reactors (BWR), and high-temperature gas-cooled reactors, as well as uranium-plutonium mixed oxide (MOX) fuel assemblies.

It will also provide related services, including reconversion, and it is slated to newly enter into overseas markets as a supplier of MHI-designed fuel assemblies for PWRs. The companies did not comment on the proposed U.S. nuclear fuel fabrication facility.

MHI forecast that the new company would have around 550 employees, and it expects 50 billion yen ($550 million) in sales by 2020. According to the agreement, the ownership ratios of the four partners will be: MHI, 35%, MMC, 30%; AREVA, 30%; and MC, 5%.

The Nikkei newspaper suggested that the alliance would challenge that of Hitachi Ltd. and General Electric Co., as well as Toshiba Corp.

Japan’s government has been looking to step up the use of nuclear power, since the country lacks other natural energy resources. Already a third of the country’s power is generated by nuclear power.

The country has built its own reprocessing plant in northern Aomori prefecture, which is expected to begin operating soon. Last week, The Japan Times reported that the country will soon begin buying back MOX—nuclear fuel made of plutonium and reprocessed uranium—from France as early as April. The fuel will be used at light-water reactors of companies based in southern and central Japan. It will be the first time reactors in Japan will use the reprocessed fuel to generate power.

The Times specified Kyushu Electric Power Co., Shikoku Electric Power Co., and Chubu Electric Power Co., as the three utilities planning MOX shipments.

Sources: Mitsubishi Heavy Industries, Nikkei newspaper, The Japan Times