Market Impacts of Converting to Low-enriched Uranium Targets for Medical Isotope Production

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Market Impacts of Converting to Low-enriched Uranium Targets for Medical Isotope Production ( market-impacts-converting-low-enriched-uranium-targets-medic )

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The costs related to the LEU-target conversion project are predominately associated with the need to modify the hot cells to process the changed targets and to increase waste storage within the hot cells. The reported values include the expected costs of the regulatory approvals necessary to convert the processing facility and to operate it using LEU targets: • high infrastructure impact scenario: around EUR 8 million, with one value much higher; • low infrastructure impact scenario: around EUR 7 million, with one value much higher. These values were applied on a facility-specific basis. In addition, processors face incremental impacts related to operating costs from using LEU targets. The move to LEU targets is expected to result, in most cases, in more processing steps, longer processing time (and thus more resulting decay of the 99Mo), higher waste volumes and yield losses from the targets. This latter impact is captured through the LUCM modelling and therefore not modelled as a separate impact. However, the other impacts are modelled with reported values of expected production reductions for all the remaining impacts varying between 1 to 20% for the high infrastructure impact scenario and from 1 to 50% for the low infrastructure impact scenario. The logic is that as more investment is made in the conversion process, the expected production impacts from target conversion should be minimised as the changed process is optimised to operate most efficiently. The facility-specific impact to operating costs is applied to the facility from the year after the conversion (as the first full year of operating as a converted facility). Finally, the cost impacts for providing information necessary for the generator manufacturer(s) to obtain health regulatory approval is another important cost impact element. In general, generator manufacturers are required to submit three separate sets of “tens of generators” to health regulatory authorities as part of the LEU-based 99Mo approval process for each market and from each processor. The 99Mo used in those generators must come from commercial-sized LEU-based batches. LEU-based processors have indicated that in order to facilitate their customers’ efforts to seek health regulatory approval, the processors have provided the LEU-based 99Mo free to the generator manufacturer for the required amount of generators. However, if processors are not yet selling LEU-based 99Mo, they are required to develop a commercial- sized batch in order to supply the “tens of generators” based on the requirements of the health regulatory authority. The NEA modelled this cost assuming a scenario of needing to produce the three commercial-sized batches of LEU-based 99Mo in two markets. The scenario assumes that once approval is received in two markets, the processor could extract enough LEU-based 99Mo from production runs for those markets to support the “tens of generators” required in a third (fourth, fifth, etc.) market. The modelling assumes that a commercial-sized batch is 300 6-day curies and would be offered free of charge, representing a cost to the processor of those curies at the full-cost recovery reference case price for the market (as foregone revenue). This cost was applied to processors during the year of conversion. It should be pointed out that the model does not include the possibility that an existing processor would build a new processing facility rather than converting their current facility. A new processing facility can cost EUR 80 million or greater. As noted in Section 3.1, the model does not evaluate the impacts of new infrastructure costs as it is very difficult to delineate “new infrastructure” costs from “LEU-related” costs for new infrastructure. The effects of such an investment cost on prices have been determined in the NEA economic study (OECD/NEA, 2010). MARKET IMPACTS OF CONVERTING TO LOW-ENRICHED URANIUM TARGETS FOR MEDICAL ISOTOPE PRODUCTION, ISBN 978-92-64-99197-2, © OECD 2012 43 CHAPTER 3. COST IMPACTS OF LEU-TARGET CONVERSION

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