July 21, 2024

Sixty-five years ago, the first nuclear-powered submarine went into service in the United States.

Today, there are 160 submarines, aircraft carriers and ice breakers around the world that operate on small nuclear power plants, according to the World Nuclear Association.

If nuclear power plants can be built to a small-enough scale to fit onboard a submarine, could they also not be dropped off by truck or helicopter in remote, off-grid communities or mine sites to provide zero-emission sources of heat and power?

James Walker, the Vancouver-based CEO of Nano Nuclear Energy Inc. (NASDAQ: NNE), said he hopes to see that become a reality by 2030.

Nano Nuclear, which went public on the Nasdaq with a US$10 million public offering on May 10, is developing portable micro-reactors, and remote off-grid communities and mine sites—where the only option for generating power is typically diesel generators—are the company’s main initial markets.

In Canada, the energy-intense oil sands of Alberta could be another market for these zero-emission mini nuclear power plants.

“There’s a huge opportunity, I think, in Canada for these remote nuclear solutions,” Walker told BIV.

“When we’re speaking to small communities in the north, they were telling us, for a community of like 800 people, the diesel costs alone are $10 million a year,” he said. “That’s the same for mining operations. The fuel costs alone can kill the economics of those things.”

Whereas small modular reactors (SMRs) are being designed to generate anywhere from 10 megawatts of power to 300 megawatts, the two micro-reactors Nano Nuclear is designing would have power-generating capacities of less than 20 megawatts.

Nano Nuclear’s board of executive advisors include former New York governor Andrew Cuomo and retired four-star U.S. general Wesley Clark.

It’s not just mini reactors that Nano Nuclear plans to build. The company’s vertically integrated business model includes business units that will deal with the nuclear fuel supply chain, including enrichment and transportation businesses.

“There’s a big supply chain issue here,” Walker told BIV. “So we’ve actually tried to mitigate against that by developing our own fuel business. We’ll be supplying the whole industry with this fuel.”

Naturally occurring uranium isn’t fissile—in other words, it can’t initiate a self-sustaining nuclear chain reaction. It needs to be enriched in order to be used in most nuclear power plants.

Canada’s existing CANDU nuclear reactors, most of which are located in Ontario, are one exception: They don’t need enriched uranium. Most other nuclear reactors do, and some SMR designs—such as fast reactors—will also need highly enriched uranium.

Enrichment involves increasing the percentage of the uranium isotope 235, which is fissile, to between three and five per cent for conventional nuclear power plants, and up to 20 per cent for some of the newer SMR designs.

“All SMR or all nuclear companies are going to have an issue with fuel supply, because the fuel that’s actually required for these more advanced reactors is more like 10, 15, 20 per cent enrichment,” Walker said.

About 12 per cent of the enriched uranium used in the U.S. comes from Russia. But that’s a pipeline that is about to be blown up, metaphorically speaking, as the Biden administration just last month signed into law a new act banning uranium imports from Russia.

This will mean the U.S. will need to step up its own enrichment capacity. Nano Nuclear plans to get in on that business with HALEU Energy Fuel Inc., a subsidiary that will provide enriched uranium for its own reactors, as well as for other clients.

Another subsidiary, Advanced Fuel Transportation Inc., will handle the uranium fuel transportation.

“There’s a big supply chain issue here,” Walker said. “We’ve actually tried to mitigate against that by developing our own fuel business. We’ll be supplying the whole industry with this fuel.”

Originally from the United Kingdom, Walker—who has degrees mechanical engineering, mineral and geotechnical engineering and nuclear physics engineering—moved to Vancouver in 2016 to design mechanical equipment for Vancouver-based mining companies.

“It was actually mining that brought me here,” said Walker, who is also the CEO of Vancouver-based junior miner Ares Strategic Mining Inc. (CNS: ARS), which owns a fluorspar mine in Utah.

In the U.K., Walker worked as an engineer for the Ministry of Defence and ended up being seconded by Rolls Royce (LSE:RR) to work on nuclear power technology used in Britain’s nuclear-powered submarines.

One of the advantages of mini nuclear power plants—apart from the fact that they produce no carbon dioxide emissions—is that they only need to be fuelled once and can then operate for up to 20 years.

A mini nuclear power plant could be dropped into a remote mine site by helicopter, fuelled up and then, when the fuel is spent, the entire power plant could be removed.

Companies would not buy the power plants. Instead, Nano Nuclear would provide the reactors and sell the mining company power.

“It would be like a utility company, because we realize that no one wants to buy a reactor with that upfront capital cost,” Walker said. “And they don’t want to run it and they don’t want to decommission it.”

Walker said remote off-grid mines and communities are a main target market, given their current reliance on diesel generators to generate electricity.

Diesel fuel is not only expensive, especially when it has to be transported hundreds of kilometres into remote areas, but it also produces a significant amount of greenhouse gas emissions.

The Canadian government has embraced SMRs as part of its climate action strategy and has also identified mining as a perfect fit for them.

“There is strong potential in the mining sector, which has significant energy needs that are currently being met by diesel,” Natural Resources Canada’s SMR Roadmap says.

“There is a need for specific engagement in SMRs in this sector building on the roadmap. The potential for SMR deployment in other industrial applications, such as in the oil sands, will depend on carbon-pricing initiatives, as these are currently serviced by natural gas.”

The two micro-reactors that Nano Nuclear has designed have yet to be built. Walker said he hopes to see the first one built within the next six years.

(Updated June 14, 2024: Nano Nuclear is not based in Vancouver, as suggested by original headline — the CEO is.)

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