China freezes nuclear approvals

I wrote on Monday that China and India were pressing ahead with their nuclear building programmes even in the wake of the Japan crisis. Well, no longer, at least for the moment. China has just made an announcement that could have a huge impact on the nuclear industry.

This is from Reuters:

China has suspended approvals for proposed nuclear power plants and is making a comprehensive safety check of atomic plants following Japan’s nuclear crisis, the State Council, or cabinet, said on Wednesday.

The statement from the State Council said:

We will temporarily suspend approval of nuclear power projects, including those in the preliminary stages of development.

We must fully grasp the importance and urgency of nuclear safety, and development of nuclear power must make safety the top priority.

Any hazards must be thoroughly dealt with, and those that do not conform to safety standards must immediately cease construction.

Even if China carries on with plans to build an enormous 40GW of new nuclear power over the next five years, this new focus on safety could make it a lot more expensive for nuclear developers.

What is puzzling is that shares in nuclear companies with a significant presence in China have not reacted. One of the largest, Areva, is even up for the day. Perhaps investors have calculated the State Council’s statement is little more than rhetoric and China will have no choice but to carry on with its nuclear plans undeterred. We will stay monitoring this story.

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