Financial Impact and Opportunity of Silex Laser Enrichment and Terrestrial Energy's Integral Molten Salt Reactor

Levis Kochin writes at SeekingAlpha. Levis is an investor in Silex and Terrestrial Energy. Nextbigfuture has covered the Silex process for laser uranium enrichment and Terrestrial Energy’s Integral Molten Salt Reactor.

Some of the Nextbigfuture coverage of Silex and Terrestrial Energy

Costs and economics of Terrestrial Energy’s Integral Molten Salt Reactor [nextbigfuture]

Terrestrial Energy Video update [nextbigfuture]

Terrestrial Energy successfully closed its final seed round of financing [nextbigfuture]

Laser Uranium Enrichment has completed first test loop [nextbigfuture]

GE SILEX laser uranium enrichment [nextbigfuture]

The Financial Impact Analysis of Levis Kochin

Levis Kochin is an associate Professor of Economics at the University of Washington, Seattle Campus. He earned my Ph.D. in economics from the University of Chicago in 1975. Lester Telser and Milton Friedman were his advisors. He have taught at the University of Washington since 1973. He has also worked for the Federal Reserve Bank of New York, the Federal Reserve Bank of St. Louis, the Bank of Israel, and the Hoover Institution of Stanford University.

* Silex will cut the cost of nuclear fuel, a minor cost of nuclear power. Terrestrial Energy will cut the capital cost of nuclear plants- the major cost of nuclear power.

* Eighty percent of the cost of nuclear power is the capital cost of the power plant. The fuel is less than ten percent.

* Integral Molten Salt Reactor powered electricity give promise of being cheaper and safer cheaper than coal or conventional nuclear powered electricity.

Silex – a public company – is an attractive investment opportunity. Its technology for laser enrichment of uranium is markedly lower cost than the centrifuge enrichment technology of its competitors. Its licensee Global Laser Enrichment will over time take over the Uranium enrichment market and Silex is likely to receive royalties which are a multiple of the cap value of Silex. But the disruptive effect of laser enrichment is narrow. The prospects of nuclear power are only marginally affected because uranium enrichment is a small portion of nuclear power costs. Terrestrial Energy is attacking the main costs of nuclear power- capital costs, safety and waste disposal. If Terrestrial Energy succeeds, a substantial number of important public companies in nuclear reactor construction and coal will lose much of their capital value. The value of companies exploiting the oil sands will, on the other hand, be substantially enhanced.

Enrichment represents about 30% of the cost of nuclear fuel. But nuclear fuel represents only 10% of the total cost of nuclear power. The total value of nuclear electricity in the world at wholesale is about $200 Billion per year. The total value of nuclear fuel is about $20 Billion per year. (All valuations in this article are stated in U.S. dollars.)The world enrichment market is worth about $7 billion per year. Two manufacturers of centrifuges, one Russian (Rosatom) and one West European (Enrichment Technology Company) both manufacturing centrifuges designed by Gernot Zippe while a prisoner in the Soviet Union, have over 90% of the uranium enrichment centrifuge market.

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