Moltex Energy Canada, a company with plans to construct its inaugural small modular nuclear reactor in New Brunswick, is taking steps to sell off certain assets amid growing uncertainty about its future in the region.
The company is in the process of offloading its engineering designs, patents, software, intellectual property, modeling data, and other assets to a new entity interested in selling reactors in different locations. Nuclea Energy Inc., based in British Columbia, has offered Moltex $11.5 million for these assets, which is significantly lower than the public investment the Saint John company has received over the past decade.
Facing financial difficulties, Moltex depleted its funds last year and is currently under the administration of insolvency managers. Despite the sale of what Nuclea refers to as “distressed assets,” Moltex’s CEO, Rory O’Sullivan, mentioned that the company intends to persist and has not completely ruled out the possibility of proceeding with the construction of a small modular reactor in New Brunswick.
However, the likelihood of this scenario seems to be diminishing. Energy Minister René Legacy expressed a preference for separating the acquisition of new electricity generation sources from the political motive of generating local employment opportunities. He emphasized that the province is not willing to bear the risk associated with pioneering initiatives in this field.
Nuclea has disclosed plans for an initial public offering on the New York Stock Exchange and has committed to allocating 20% of the raised capital towards the acquisition of Moltex. In a recent filing, it was highlighted that the sale does not encompass all of Moltex’s assets or liabilities.
Nuclea’s own reactor design, named Morpheus, differs technologically from Moltex’s stable salt reactor model. The intended markets for Morpheus include Arctic communities, data centers, mines, and remote military sites, as outlined in a filing dated April 29.
The original plan of situating Moltex’s first reactor adjacent to N.B. Power’s existing Point Lepreau generating station is not referenced in the recent developments. Legacy acknowledged his awareness of the potential sale and expressed anticipation of engaging with the new owners.
In a statement, Nuclea described its Morpheus reactor as a unique design with innovative features that are yet to be fully validated. A review panel examining N.B. Power echoed Legacy’s caution regarding new technologies and recommended avoiding untested innovations to prevent exacerbating financial challenges.
Moltex had previously received financial support from both the federal government and the Liberal administration of Brian Gallant. The Progressive Conservative government under Blaine Higgs had also shown support for Moltex and another developer, Arc Clean Energy Canada, with aspirations to position New Brunswick as a global leader in nuclear technology.
However, financial hurdles faced by both companies have raised doubts about their ability to deliver small reactors in time to address potential electricity shortages by the end of the decade. Amid these uncertainties, suggestions have been made to explore alternative SMR designs that are more advanced and could be operational sooner.
Nuclea’s president, Sagar Sanghera, did not respond to requests for an interview.