NECSA ACTIVITIES AND BUDGET FOR 2001/02

Mr. M Damane

Acting Chief Executive Officer

 

RESPONSIBILITIES OF NECSA

 

  1. Developing technological expertise in the field of nuclear fuels.
  2. Promoting the development and application of nuclear technology for peaceful purposes.
  3. Exercising control over the management of radioactive waste.
  4. Administering the Nuclear Non-Proliferation Treaty and the International Safeguards Agreement on behalf of the State.

 

WHITE PAPER ON ENERGY POLICY

Directive with respect to Atomic Energy Corporation (page 50):

Government will consider proposals that the AEC be restructured into two separate and independent organisations:

First, an organisation that carries out institutional responsibilities on behalf of the State. These responsibilities may include:

  • Decommissioning and decontamination of past strategic nuclear fuel facilities;
  • The management of nuclear waste disposal on a national basis;
  • The application of radiation technology;
  • Operating the Pelindaba site and services;
  • Execution of the safeguards function with the International Atomic Energy Agency (IAEA), the Nuclear Non-Proliferation Treaty (NPT), the African Co-Operative Agreement (AFRA) and the Treaty of Pelindaba; and
  • Technical co-operation activities with IAEA/AFRA.

 

 

Second, a separate organisation that houses all of the AEC’s commercial activities (even those that are still under development). An evaluation of all of the AEC’s commercial activities must be undertaken to ascertain their future viability.

 

 

Third, the role of SAFARI-1, the AEC’s isotope-producing reactor, must be thoroughly evaluated to determine the viability or necessity of the following three areas:

  • Its commercial viability in producing large-scale isotopes for the export market;
  • Its possible expanded use for academic research and training; and
  • Its strong geo-political role in terms of its usefulness to the IAEA/AFRA technical co-operation activities within Africa.

NECSA GOVERNMENT GRANT

R’Million

 

2000/01

2001/02

2002/03

2003/04

Operating Activities

Loan Redemption

Interest Payable

D&D Programme

147,1

4,3

33,3

15,6

129,1

2,4

32,6

16,2

134,9

233,4

32,1

19,5

140,2

-

1,5

19,5

TOTAL

200,3

180,3

419,9

161,2

 

NECSA ACTIVITIES BUDGET FOR 2001/02
 

R’Million
  1. Nuclear Technology and SAFARI-1 Research Reactor
  2. Nuclear Waste Liabilities Management
  3. Pebble Bed Nuclear Fuel Programme
  4. Risk Management (Risk Analysis, Health, Safety and Environment, Protection Services, Medical and Emergency Services)
  5. Facility Management
  6. Safeguards, Quality and Engineering
  7. Laser Technology
  8. IAEA/AFRA and Government Obligations
  9. Corporate Support and Allocated Overheads

TOTAL

33,4

 

37,4

1,5

9,9

 

 

13,3

3,3

1,7

2,3

35,1

 

R137,9

 

Government Grant for 2001/02 R129,0 million

Shortfall 8,9 million

Total R137,9 million

GUIDELINE FUNDING OF MAIN OBJECTIVES OF NECSA

Main Objective

Division

Key Drivers

2001/02 Budget

As a national nuclear institution to cost-effectively perform identified institutional functions on behalf of the State*

 

Pelindaba Nuclear Institute Division

(PN)

Cost-efficiencies. External income to contribute to the reduction of operational expenditures

R129,054 m

Shortfall: R8,935m

To develop, commercialise

and operate a portfolio of businesses within the fluoro-chemical, radiation and systems engineering competencies for eventual privatisation*

 

Pelindaba Technology Division

(PT)

Profit maximisation through timeous exploitation of market opportunities

Shortfall: R16,77m

* All corporate overheads allocated to the two divisions.

 

PELINDABA NUCLEAR INSTITUTE (PNI)

  1. NECSA: Decommissioning and Decontamination Project (D&D)

Key Activities

Decommissioning of former nuclear fuel plants and facilities:

Skills

NECSA Staff

51 (41% from designated group)

 

NECSA Budget for D and D Project

(Government approved in terms of medium term framework budget)

2001/02

2002/03

2003/04

R16,2 million

R19,5 million

R19,5 million

 

 

  1. NECSA Nuclear Waste Liabilities Management Function

    2. Key Activities

    Skills

    A wide array of skills which include:

    - Mechanical Engineering

    NECSA Staff (208)

    NECSA 2001/02 Budget: R54,5 million Gross

    R37,1 million Net

    1. NECSA: Nuclear Non-Proliferation Function

      2. Key Activities

      • Safeguards activities
      • Monthly reporting to IAEA on uranium inventory
      • Monthly inspections by IAEA

      Skills

        • Uranium Chemistry and Analytical capabilities
        • IAEA accounting and inventory control (SSAC System) expertise
        • Nuclear Energy Act and related Treaties Expertise

      Staff

      7 permanent staff members (scientists and technicians)

       

      NECSA 2001/02 Budget: R2,0 million

       

       

      1. NECSA: IAEA/AFRA Activities

        2. Key Activities

          • Training and development via technical workshops to members of 25 African member state countries through IAEA.
          • Participation in 9 AFRA projects which involves specialised mission teams to Madagascar, Tunisia, Sudan, Mauritius, Zimbabwe, Libya, Nigeria and Ethiopia
            • Project participation includes the following:

        - Conditioning and safe storage of spent radium

        sources

        - Dam leakage detection

        - Auditing of Radiotheraphy facilities in State

        Hospitals in Africa

        - Borehole Disposal Concept Technology

        - Mutation Breeding for improved crops

        - Technology to upgrade gamma cameras

        - Radio-immunoassay techniques for cattle

        farmers to increase success rate of artificial

        insemination

        - Distance assisted training for nuclear medicine

        technologists (Grootte Schuur-based)

        - Management of regional designated training

        centres

        Skills
        - Nuclear instrumentation

          • Nuclear chemistry
          • Nuclear physics and irradiation technology
          • Quality control and data collection
          • Project management

         

        NECSA 2001/02 Budget: 2 permanent employees

        R0,7 million (direct costs)

        1. NECSA Facility Management Function

          2. Key Activities

          • Maintenance of NECSA buildings and facilities
          • Optimum utilization of facilities (external leasing)
          • Production of utilities on site (water, compressed air, liquid nitrogen, steam)
          • Support and maintenance services (transformers, air conditioning, lighting, fire detection, etc)

          Skills

            • Mechanical engineering
            • Electrical engineering
            • Ventilation Technology
            • Instrumentation capabilities
            • Utilities Management
            • Lease Management
            • Project Planning
            • Preventative Maintenance
            • Civil Maintenance
            • Etc.

          Staff

          184 (35% from designated group)

           

          NECSA 2001/02 Budget: R98,6 million Gross

          R10,4 million Net

           

          1. NECSA: Nuclear Technology

          (Including SAFARI-1)

          Key Activities

            • Operation of SAFARI-1 safely and cost-effectively in accordance with licence agreement.
            • Manufacturing of MTR fuel elements for SAFARI-1.
            • Provision of services including irradiations, nuclear analyses, radiation calculations, non-destructive testing, etc, on a cost-recovery basis.
            • Development of radioisotope production processes, isotope products, radiation instrumentation systems and nuclear analytical methods for commercial exploitation.
            • To participate in AFRA, IAEA and related forums and institutions through joint programmes and training initiatives.
            • To maintain nuclear expertise for the country.

          Skills

            • Radiation technology
            • Reactor physics
            • Radioactive waste technology
            • Computer modelling
            • Isotope production
            • Neutron sciences
            • Nuclear fuel manufacturing
            • Radiochemistry and radioanalysis
            • Library and archival services

          Staff (189)

            • 175 permanent and 14 contract workers
            • 26% of staff from designated group

           

          NECSA Budget 2001/02: R65,3 million Gross

          R32,3 million Net

          Government grant for SAFARI-1 in 2001/02: R9,8 million

          Recent DACST Review on SAFARI-1

           

          SAFARI-1 is a national asset that can play a pivotal role in nation-building in South Africa. It can provide an important technically and scientifically advanced facility for the education, reactor-related training and capacity building for a large body of the population. It provides a very useful facility, the neutron beam research, in both basic sciences and in applied fields.

           

          Role of PT

          Commercial exploitation of core competencies derived from NECSA’s nuclear fuel cycle activities to generate sustainable profits through a portfolio of products and services.

          1. Radiation and Isotope Business (NTP)
          • Range of medical and industrial isotopes, labelling kits and containers.
          • Produced via SAFARI-1 Research Reactor and Hot Cells Facility.

          Industrial Applications

          Medical Isotopes

          Isotopes

          Application

          Isotope

          Application

          192IR

          140La

          90Y

          32P

          35S

          82Br

          24Na

          Radiography

          Fluid transport

          Thickness gauging

          Labelling

          Labelling

          Fluid transport

          Tracer studies

           

          99Mo

          153Sm

          131I

          198Au

          192Ir

          186Re

          99mTc generators for cancer treatment

          Pain palliation

          Diagnosis and therapy

          Brachytherapy

          Brachytherapy

          Pain palliation

           

          • Medical Isotopes are used in 20 international hospitals across the globe.
          • Approximately 600 000 cancer patients benefit annually from treatments utilizing medical isotopes produced at NECSA.
          • In the case of Mo-99 NECSA has 12% world market share.
            • Mo-99 exports to 20 countries abroad and to 10 African state countries
            • Forex earnings > R40 million per annum
            • Received State President’s Award for Export Achievement in November 2000 and winner of Technology Top 100 Award.
          1. Fluoride-based Chemical Business (Pelchem)
            • NECSA is sole producer of HF and F2 in South Africa (derived from involvement in nuclear fuel manufacturing).
              • NECSA has invested in chemical manufacturing plants on site which resulted in the following outputs:

            - Production of Acids and Salts in 2000: 19 397 ton

            Production of Fluorine Gases in 2000: 815 ton

            Plant utilization: > 83%

            • NECSA has developed a unique expertise in fluorine-based technology. Recent statements by DACST in a review report:

             

            NECSA has developed an array of skills and knowledge in the field of fluorine chemistry and may well have developed a core competency. This field holds high prospect for commercialisation.

             

            • NECSA has built up a significant pool of intellectual capital over a number of years with commercial potential.
              • 185 international patents registered in about 30 countries
              • 20 distinct inventions in fluorine technology and in radiation and engineering fields.
            • Total Budgeted Earnings from fluoride-based programme for 2001/02: R150 million
            • New Chemical Development Projects:
                  1. Expansion of F2 gas supply for production of NF3 in collaboration with BOC

                    2. Capex in 2001/02 : R55 million

                    NPV : R115 million

                    IRR : > 40%

                    Payback : 2,6 years

                  2. Erection of a pilot plant on behalf of Dyneon GmbH in order to produce, on a toll basis, a product DY02

            Capex in 2001/02 : R15 million

            NPV : R9,5 million

            IRR : > 25%

            Payback : 4 years

            • Speedy corporatisation is required to obtain external capital for above developments. This is supported by recent CSIR/DACST Review Report which states:

             

            It is essential that corporatisation of Pelchem is implemented speedily and holistically in order to promote cash flow from equity partners in new ventures.

             


            CONCLUDING REMARKS
            1. Annual loan redemption and interest repayment tend to distort Government grant to NECSA. Note must be taken of R233,4m loan repayment in 2002/3 which is 63% of NECSA’s Government grant in that year.
            2. The need to maintain current levels of Government funding for operational activities within NECSA is pivotal. Further reductions in Government grant would lead to a possible curtailment in activities like waste management and discharge of nuclear liabilities, creating health risks, increasing the future financial burden of Government and may result in non-conformances with certain IAEA agreements.
            3. Speedy corporatisation of PT is critical to enhance the market orientation of the group and to obtain capital from foreign investors for the further development of the country’s fluoride-based export programme.