MDS and AECL resolve MAPLE reactor dispute

Atomic Energy of Canada (AECL) will be assuming full ownership of its MAPLE reactor program and all related costs following the conclusion of a lengthy mediation process with MDS Inc, parent firm of MDS Nordion. The MAPLE reactor has been fraught with repeated delays and cost overruns since being touted as a replacement source of medical isotopes to the current NRU reactor at Chalk River ON. A meditator was appointed one year ago to bring the dispute to a resolution (R$, March 30/05).

The mediated resolution, which both sides have accepted, will see AECL assume ownership of the MAPLE reactor project, take responsibility for all future capital and operating costs, acquire $53 million worth of associated inventories and immediately pay MDS $25 million. MDS and AECL have also entered into a 40-year supply agreement similar to the existing NRU contract. The MAPLE reactor to be used by MDS Nordion is now slated for completion by 2006-08, depending on the pace of remaining development.

"We're very pleased. This agreement serves both parties very well and relieves a lot of uncertainty for MDS shareholders," says Sharon Mathers, MDS Inc's VP investor relations. "The mediation process was intended to address significant cost overruns for the project."

MDS Nordion has been using AECL's aging NRU reactor for the production of its medical isotopes. But in the 1990s, anticipated the sunsetting of that reactor, the two firms entered into an agreement to share the costs of building two isotope production facilities and a processing facility above $150 million. The MAPLE project ran into several lengthy delays, however, and costs spiralled out of control.

AECL has requested a five-year operating licence renewal for its NRU reactor, which was completed in 1959 and was slated for decommissioning in 2005. The crown corporation has invested millions in NRU to avoid a disruption in medical isotope production and research before the MAPLE comes on stream. When the MAPLE reactor is commissioned, the NRU will be phased out by 2011.

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