In a briefing to the Parliamentary Portfolio Committee on Mineral Resources and Energy on May 20, the South African Nuclear Energy Corporation (Necsa) stated that it would achieve a turnover of more than R2-billion during the 2021 financial year (FY), but nevertheless expected a net loss of R61-million. However, the group had sustained a loss of R203-million in FY2020, meaning that the FY2021 figure would represent a “significant improvement”.
In five years time the group expected to record a net profit of R551-million, rising to just over R1.4-billion in ten years. “The key financial objective of the group in the short term is to reduce losses and to rehabilitate the Balance Sheet to enable the group to fund its Growth and Expansion strategy,” stated Necsa in its briefing.
That strategy was intended to make Necsa, in its own words, “a world leader in nuclear, radiation and related technologies by 2030”. The strategy set targets for the next 12 months, the next five years and the next ten years.
Over the next 12 months, the group’s objectives included Necsa subsidiary commercial company NTP Radioisotopes (NTP) regaining its 20% share in the global market for Molybdenum-99 (Mo-99) medical radioisotopes, and increasing its range of medical radioisotopes from three to four. Another objective was to refurbish the plants of the group’s other subsidiary commercial company, speciality chemical manufacturer Pelchem (the only producer of fluorochemicals in the entire southern hemisphere), thereby increasing its revenues by R78-million.
Necsa also sought to establish itself as the preferred supplier of very high quality components to other State-owned companies, especially Eskom, gain income of R20-million from contract research and development (R&D),and improve the balance sheet and cash flow by optimising and monetising various assets. It further sought to optimise its decommissioning and decontamination (D&D) activities and decrease its current nuclear liability by 10%.
Five years from now Necsa objectives included NTP increasing its global market share to 24% and increasing its range of medical radioisotopes from four to six. For Pelchem, the aim was for it to obtain extra revenues and a 0.025% market share through the production of high purity specialised products, increase its fluorochemicals production by 5 000%, and develop (through partnerships) a 30 000 t/y commercial hydrogen fluoride plant (the Thuthukani project).
Necsa also expected its Ketlaphela project (being developed with minerals beneficiation technology science council Mintek) to produce antiretroviral drugs (ARVs) to achieve a 35% share in the local ARV market and be earning revenues of R721-million. The group would continue to be the preferred supplier of very high quality components to Eskom and other State-owned companies, continue to maximise and monetise various project assets to continue to improve the balance sheet, increase its market share in life extension projects to 30% by means of products and services, earn net income of R192-million from impact area R&D projects, and further optimise its D&D activities and cut its current nuclear liability by 50%.
The group’s objectives for ten years from now were NTP achieving a 33% world market share, bringing in revenues of R2-billion and having widened its medical radioisotope range from six to nine; Pelchem earning revenues of R1.3-billion; and the Ketlaphela project achieving revenues of R4.1-billion from ARVs and other pharmaceuticals. Necsa itself would further expand its production and other revenue-generating activities; it would seek net income of R240-million from impact area R&D projects; and it would continue to optimise its D&D activities and cut its current nuclear liability by 75% to 100% as well as slash the associated government guarantees by 75%.
There was one other objective for 2030: the generation of about 20% of Necsa’s revenues from a new multipurpose reactor (MPR). Regarding this MPR, the group briefed the Parliamentarians that it expected the feasibility study to be finished and approved within 12 months. Five years from now, the business case and funding should have been approved, and engineering and construction work should have gotten under way. By 2030, the MPR should have been handed over the Necsa, commissioned and be in operation.