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Highlights
- UK is planning to block China-based nuclear energy giant CGN from being a part of the Sizewell C nuclear plant in Suffolk, according to a Financial Times
- The government is reportedly planning to sell off CGN’s 20 per cent stake either through an IPO or an institutional investor only stake sale.
The UK is planning to remove Chinese state-owned energy company the China General Nuclear Power Group (CGN) from the building of a proposed nuclear project, the Sizewell C nuclear plant in Suffolk, according to a Financial Times report.
As per the report, the government is currently under negotiations to hold a stake in the Sizewell nuclear project and is planning to either sell a minority stake to institutional investors or to list it on the market via an IPO.
The project is currently being developed by French nuclear power company EDF, with backing from CGN. CGN currently has a 20 per cent stake in the proposed £20 billion project.
The government also plans to remove CGN’s involvement from its other UK based nuclear projects, including the Bradwell nuclear project in Essex.
The stake sale report comes days after the news surfaced that the UK plans to restrict Chinese investment in the nuclear sector due to security reasons.
In view of this news, let us take a look at 2 FTSE 100 listed companies involved in the nuclear power chain, including uranium mining, nuclear power plant generation and more:
- BHP Group PLC (LON: BHP)
BHP is the world’s biggest mining company and owns the Olympic Damn mine, which is the largest uranium deposit in the world.
According to a recently published report by research firm HTF Market Intelligence Consulting, the nuclear fuels market may drive growth for BHP, mining giant Rio Tinto (LON: RIO) and other major players in the sector by 2027.
BHP’s shares were trading at GBX 1,830.80, down by 0.87 per cent on 29 September at 08:02 AM BST. The FTSE 100 index, on the other hand, was trading at 7,064.67, up by 0.52 per cent.
The company has a market cap of £39,005.74 million and a one-year return of 7.81 per cent as of 29 September.
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- Rolls Royce Holdings PLC (LON: RR)
Aerospace and defence giant Rolls Royce is expected to build up to 16 new nuclear plants, according to a Sunday Times report.
The report said the UK’s business secretary Kwasi Kwarteng is expected to approve funding for the project.
Rolls Royce is expected to be the first maker of small modular reactors to submit their designs to government regulators. Moreover, it is also expected to create about 40,000 jobs by 2050, especially in the Midlands, the north of England and other areas.
Rolls Royce’s shares were trading at GBX 141.00, down by 1.16 per cent on 29 September at 08:11 AM BST.
The company has a market cap of £ 11,937.21 million and a one-year return of 172.25 per cent as of 29 September.
Bottom Line
The ongoing energy crisis has brought the focus onto alternative sources of energy and power generation as a means to boost UK’s energy security in the long term, as the government aims to get gas off the grid.
While the costs associated with building nuclear power plants has been somewhat prohibitive in the past, the government has been pushing for investment in the sector in recent times, as it will also aid in the UK’s path towards becoming net-zero by 2050. This also represents the government’s more long-term focus on investing in the nuclear energy space and supporting the sector.
Another reason that alternative energy is a huge focus for the government is due to UK’s desire to be a leader in climate change. The UK is currently readying itself to host COP26, the key UN climate summit, to be held in November.
