Orano - Annual Activity Report 2024 73 RISKS, CONTROL AND DUTY OF VIGILANCE PLAN 3 Risk factors 3.3.2.3 Risks related to end-of-lifecycle operations Description of the risk As operators of regulated nuclear facilities (installations nucléaires de base, INB) and industrial facilities covered by legislation on environmentally regulated sites (installations classées pour la protection de l’environnement, ICPE), the group’s legal entities have an obligation to ensure the safety and dismantling of those facilities during their final shutdown, in whole or in part, and/or to restore the sites, and to manage the products resulting from these operations. Future expenses associated with the end-of-lifecycle obligations of nuclear facilities and with the remediation of regulated industrial facilities have been identified, and specific provisions have been constituted by the legal entities which operate those facilities. As of December 31, 2024, these future expenses are provisioned for 9.1 billion euros. The rules related to provisions for end-of-lifecycle operations are described in Note 13 End-of-lifecycle operations in Section 6.1 Consolidated financial statements. Apart from the financial aspects, the main risks likely to impact the cost of end-of-lifecycle operations relate in particular to: ● identification of discrepancies between the original condition of legacy facilities or legacy waste and their actual condition; ● changes in regulations, particularly with respect to dismantling, the target final condition of the facilities and soils after dismantling, the storage solutions used or the requalification as waste of radioactive materials currently still considered to be reusable (see also Section 3.3.1.3 Risks related to the requalification of recoverable nuclear materials ); and ● technical and financial uncertainties in radioactive waste management processes that may lead to delays and a drift in project implementation costs (treatment and packaging, transportation and storage costs), particularly for waste that does not yet have a definitive channel. The main risk for the group is related to the uncertainty that the amounts provisioned for end-of-lifecycle operations will correspond to the costs actually incurred by the group in respect of its dismantling obligations. It is therefore possible that end-of-lifecycle obligations and the associated expenses or an additional obligation of a nuclear or environmental nature that the group may subsequently have to bear could have a significant negative impact on its financial position. Risk management measures In accordance with the provisions of Article D. 594-10 of the French Environmental Code, created by French Decree No. 2020-830 of July 1, 2020, relating to securing the financing of nuclear expenses, the group carries out and documents an internal risk assessment at least every three years and whenever there is any significant change in the risk profile relating to securing the financing of nuclear expenses. End-of-lifecycle costs or liabilities are quantified in two principal ways, depending on the lifecycle phase of the nuclear facility. The first is to evaluate the future costs before the INB is put into service, while the second is to draw up an operating estimate at the start of the project phase of the dismantling operations. These figures also include the evaluation of margins for risks and contingencies, which are included in Orano’s provisions for end-of-lifecycle expenses. Section 4.2.5.3 details the actions to recover radioactive materials. 3.3.2.4 Risks related to uranium reserves and resources Description of the risk The estimates of the group’s resources and calculations of its reserves are based on internal work by the Mining Business Unit or from external reports audited by the business’ internal experts. Estimates of mineral resources and calculations of mining reserves are carried out in accordance with the international standards, recognized by CRIRSCO (Committee for Mineral Reserves International Reporting Standards) in terms of reporting. The evaluation of uranium reserves and resources is subject to an annual review according to changes in geological assumptions (prepared in particular from geological surveys), valuation methods, new technologies and/or economic conditions. Operating experience feedback if it leads to additional elements such as geological changes not perceived during the estimation stage is also taken into consideration. For example, fluctuations in uranium prices, rising production costs, declining extraction rates and plant yields can all have an impact on the profitability of reserves, requiring them to be adjusted. These elements may have a negative impact on the Group’s estimates which could in turn impact the Group’s results. The mineral resources and reserves of the Orano deposits are detailed in Section 2.3.1 Mines of the 2024 Annual Activity Report. Risk management measures To mitigate these risks, the Resources and Reserves Committee, which includes two experts from outside the group and reports to the Orano group’s Executive Management, is tasked with approving the schedule for updating resources and reserves, validating the resources and reserves reported by Orano each year, and ensuring that the means, organization, and internal and external estimating methods enable a comprehensive and objective estimate of resources and reserves, in accordance with international practices.
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