French nuclear power group Areva and Japanese engineering major Mitsubishi Heavy Industries have signed a memorandum of understanding to extend their co-operation in the nuclear fuel business.

The MoU calls for the establishment of a joint business organization for the supply of nuclear fuel for pressurized water, boiling water, mixed oxide and gas reactors. The implementation of this formation is expected by the end of 2008.

The scope of this co-operation agreement will focus on the Japanese market. According to the MoU, both parties will discuss Mitsubishi Heavy Industries’s (MHI) potential investment in Areva’s US nuclear fuel fabrication facility.

The two firms noted that the joint development work of their new reactor, Atmea-1, has made good progress, targeting the completion of its basic design by the end of 2009. The reactor’s design review by third parties is reportedly being planned.

Areva and MHI have also decided to work jointly on the South African tender for which Areva proposed two European pressurized reactors (EPR), extending the manufacturing co-operation initiated for the Finnish Olkiluoto-3 EPR.

Anne Lauvergeon, Areva’s CEO, said: Thanks to the good and efficient relationship developed between two companies for many years, and strengthened in working together to design Atmea-1, cooperation in the fuel business is a natural next step to develop our relationship. I have high expectations on the results that can be achieved by combining the skills and know-how of MHI and Areva professionals.