USEC Reaches $100 Million Supply Agreement

Uranium enrichment company enters into supply agreement for carbon fiber for rotor tubes with Hexcel Corp. and Alliant Techsystems unit.

BETHESDA, Md. (AP) — Uranium enrichment company USEC Inc. on Monday said it entered into a supply agreement worth about $100 million for carbon fiber for rotor tubes to be used in an USEC uranium enrichment plant.
The three-way supply agreement is with Hexcel Corp. and a unit of Alliant Techsystems.
Hexcel, which supplies structural materials for the aerospace industry, will produce carbon fiber and deliver it to Alliant, a military contractor that will use it to manufacture composite rotor tubes, USEC said.
The rotor tubes will be used in USEC's American Centrifuge Plant in Piketon, Ohio.
The agreement runs through the end of 2011. USEC has the option to buy additional carbon fiber product that could roughly double the value of the contract, USEC said.
The majority of the Hexcel sales will be in 2010 and 2011. Hexcel has agreed to add manufacturing capacity to make sure that it can fulfill the contract.
The U.S. Nuclear Regulatory Commission issued a construction and operating license for the American Centrifuge Plant in April, and construction began in May.
USEC shares fell 58 cents, or 4.1 percent, to $13.73. Hexcel shares rose 22 cents to close at $22.24, and Alliant shares rose $2.38, or 2.3 percent, to $104.19.
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