From a windswept corner of Hokkaido, Japan’s northernmost island, Japan Steel Works controls the fate of the global nuclear-energy renaissance.

There stands the only plant in the world, a survivor of Allied bombing in World War II, capable of producing the central part of a nuclear reactor’s containment vessel in a single piece, reducing the risk of a radiation leak.

Utilities that won’t need the equip- ment for years are making $100-million down payments now on components Japan Steel makes from 600-t ingots.

Each year, the Tokyo-based company can turn out just four of the steel forgings that contain the radio- activity in a nuclear reactor.

Even after it doubles capacity in the next two years, there won’t be enough production to meet building plans.

“If there are 50 to 100 reactors or more to be built, there will be a real shortage and real delays in deliv- eries, so it’s a good hedge to get in line now,” says Texas-based construction and engineering company Fluor Corp’s senior vice-president for nuclear operations Ron Pitts.

Pitts estimated the cost of heavy forgings, including reactor containment vessels, steam generators and pressurisers, at $300-million to $350-million for each generating unit.

Japan Steel would not comment on the size of the down payment, which Pitts estimates at $100-million.

UniStar Nuclear Energy, a limited liability company (LLC) in Balti-more, which is a venture between Constellation Energy Group and Electricite de France SA, reserved slots for Japan Steel gear in 2006, even though it doesn’t expect to complete its first reactor until 2015.

It plans to build reactors based on technology from Areva SA, of France.

“You need metal on the ground right now to make 2015,” says Areva NP senior vice-president of new plant deployment Ray Ganthner.

Orders for nuclear generators are multiplying as electricity use surges worldwide and governments pressure companies to cut carbon emissions to fight global warming.

As many as 237 reactors may be built globally by 2030, which is an average of more than ten a year, according to the World Nuclear Association in London.

That compares with 78, or fewer than four a year, started since the 1986 Chernobyl meltdown in Ukraine.

Given Japan Steel’s limited capacity, the math just doesn’t work, said Mycle Schneider, an independent nuclear industry consultant near Paris.

Japan Steel caters to all nuclear reactor makers except in Russia, which makes its own heavy forgings.

“I find it just amazing that so many people jumped on the bandwagon of this renaissance without ever looking at the industrial side of it,” says Schneider.

It would take any competitor more than five years to catch up with Japan Steel’s technology, said the company’s CEO Masahisa Nagata.

Rivals are working to break the Japan Steel stranglehold, including South Korea’s Doosan Heavy Industries & Construction, and Japan Casting & Forging, a joint venture of Nippon Steel Corp and Mitsubishi Steel Manufacturing.

Doosan may make the heavy forgings for the second of Westinghouse Electric’s reactors being built in China, while subcontracting those needed for the first reactor to China First Heavy Industries, says Westing- house president for nuclear power plants Dan Lipman.

Doosan and China First Heavy Industries may potentially be able to produce them in the future, says Lipman.

Areva, the world’s biggest reactor builder, is considering modifying its newest design to be able to make the central reactor vessel part from a 350-t ingot instead of more than 500 t as required today, says Areva’s Pascal Van Dorsselaer, who manages a plant in France’s Burgundy wine region.

Van Dorsselaer says that Areva would be able to produce the ingot itself with an investment of about €100-million, or $155-million, as workers coated the inside of a Japan Steel reactor shell part with stainless steel to prevent rust.
“There is definitely a bottleneck, and it’s a real issue for us,” says Van Dorsselaer.

Another alternative is to turn back the technological clock and weld together two smaller forgings, said McDermott International’s Babcock & Wilcox CEO John Fees.

Babcock & Wilcox built the Three Mile Island reactor, a technique that was used over the last 40 years in the US and France, and is still applied in China.

“It should not be off the table,” says Fees.

Even with the appetite for its nuclear products, Japan Steel is cautious about expanding too rapidly.
Orders plummeted after a German coalition government, including the Green Party, pledged, in 1998, to phase out nuclear power.

Japan Steel was unprofitable for three straight years.

The company will decide by June whether to further expand production, said Japan Steel’s manager of the Muroran plant on Hokkaido Ikuo Sato.

“Our concern is the US,” says Sato.

President George W Bush’s administration is aggressive in building nuclear plants, but we wonder how many plants will actually be built, adds Sato.

On February 13, NRG Energy, the second-largest Texas power producer, put its application for two new reactors on hold, while it works out pricing and other details with suppliers.

It has already reserved forging slots at Japan Steel for the plant.

“We want to make sure it’s done exactly right, and we have the right roles for our vendors and the right costs,” says NRG Energy spokesman David Knox.

Japan Steel stock more than doubled from the start of last year to ¥2 080 in July, before dropping, partly because of a plan to issue shares in case of a hostile takeover bid.

It now trades at ¥1 602, valuing the company at ¥595-billion, or $5,8-billion.

The Japan Steel factory’s rusting, corrugated-metal warehouses, blackened by soot, belie the precision and patience required to fashion a 600-t steel ingot into a tube with walls 30 cm thick.

Blue-clad workers, some wearing balaclavas to keep warm, draw on knowledge built up when Japan Steel made the 18-inch gun barrel, the world’s largest at the time, for the World War II battleship, Yamato.

“Our accumulated technology for cannon barrels helped us make this technical breakthrough in forging,” says Sato.

The company’s basic product, steel of the highest quality, has the same enduring appeal as the samurai swords still fashioned in limited quantities by craftspersons at the plant.

To make the 600-t ingot, workers heat steel scrap in an electric furnace to as high as 2 000 ˚C.

Then they fill each of five giant ladles with 120 t of the orange-hot molten metal. Argon gas is injected to eliminate impurities, and manganese, chromium and nickel are added to make the steel harder.

The mixture is poured into a blackened casing to form ingots 4,2 m wide in the rough shape of a cylinder.

Five times over three weeks, the ingots are pressed, reheated and repressed under 15 000 t applied by a machine that rotates them gradually, making the floor tremble as it works.

The heavy forging is needed to make the steel uniformly strong by aligning the crystal lattices of atoms that make up the metal, known as the grain. In a casting, they would be jumbled.

MORE ART THAN SCIENCE
“What they do is an art more than a science, and that’s why they’re the critical path,” says GE Hitachi Nuclear Energy senior vice-president for nuclear plant projects Steven Hucik.

His company has already reserved sufficient capacity at Japan Steel’s plant to cover its first wave of new reactors, he says.

Japan Steel’s most prized products also include samurai swords, with price tags of about ¥1-million.

They’re made in a traditional Japanese wooden hut, up a steep hill from the rest of the Muroran factory.

It is decorated with white zigzag papers, called shide, used in Shinto shrines, creating a sense of sanctity in the workshop.

Inside, as the factory clangs and hisses below, Tanetada Horii hand-forges broad swords from 1-kg lumps of Tamahagane steel.

“Making a sword emanating peculiar beauty from the dull substance of stone-like Tamahagane steel is bliss,’’ he says. Nagata says the process goes to the company’s heart.

“Samurai swords contain the essence of steelmaking technology. We have inherited this technology and we don’t want it to spill outside of Japan,’’ he says.