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Small Modular Reactors (SMRs) for Mining: Frequently Asked Questions

Key Questions:

  1. What is an SMR?
  2. How is the Federal Government Engaged?
  3. What are the Economics Compared to Alternatives?
  4. What are the Timelines and Pathways to Deployment?
  5. What are the Different Business Models for Deployment?
  6. Are there Operational Considerations?
  7. How Would Nuclear Waste be managed?
  8. What are Government and Industry Doing to Develop a Social Licence for the development of Nuclear Energy?

For more information, contact the Nuclear Energy Division of Natural Resources Canada.

What is an SMR?

  • Small Modular Reactors (SMRs) are a category of nuclear reactor designs that are smaller in size, power output and cost, with enhanced safety features.
  • SMRs will be modular with maximum factory-construction, making them scalable to specific energy demands. SMR designs vary in electrical output from as high as 300 MWe per module for grid-connected reactors, down to 3 MWe per module (or even smaller for micro SMRs), which could be best suited for remote or industrial applications.
  • SMRs are a promising technology which may be able to help mining companies and local communities in off-grid, remote, or northern areas transition away from using diesel. SMRs could also be used in hybrid energy systems to provide load-following power to enable higher penetration of intermittent renewables and help facilitate Canada’s transition to a low-carbon economy.
  • SMRs could also be used to address thermal energy requirements such as process heat applications, district heating, desalination, oil extraction, or the GHG-free production of hydrogen.
  • In addition to improving the competitiveness of Canadian mining operations, SMRs have the potential to provide secure, GHG-free energy to historically underserved areas, thereby unlocking future opportunities for mineral deposit exploration and mining project investments.
  • See the SMR Roadmap for more information.

How is the Federal Government Engaged?

Policy Readiness:

  • To ensure policy-readiness for this rapidly emerging area of technology innovation, Natural Resources Canada convened Canada’s SMR Roadmap, a pan-Canadian dialogue on SMRs with provinces, territories, utilities, and stakeholders from Alberta, Saskatchewan, Ontario, New Brunswick, Northwest Territories, and Nunavut to chart a vision for the next wave of nuclear innovation in Canada. The Roadmap:
    • Identified on- and off-grid combined heat and power for heavy industry, such as mine sites, mineral processing, and resource extraction, as one of three potential applications for SMRs in Canada.
    • Made 50+ recommendations for action by governments, industry, and other stakeholders to seize Canada’s SMR opportunity. One recommendation was that mining firms explore a role for SMRs in their operations, including potential business models and partnerships with the nuclear sector.
    • Recognized 24 current and potential off-grid mines in Canada that might be suitable for SMR deployment.
  • The Canadian Minerals and Metals Plan (CMMP) highlighted that SMRs can provide an opportunity for mines to lower environmental footprints, lower costs and build infrastructure that can also benefit surrounding communities.
    • The CMMP identified the need to study the feasibility and potential market of SMRs in mining operations as a means to provide reliable energy and reduce GHGs and costs.
  • Natural Resources Canada has been engaging stakeholders to facilitate interaction between SMR vendors and mining stakeholders

Regulatory Approaches:

  • The Canadian Nuclear Safety Commission (CNSC) is Canada’s independent nuclear regulator and regulates the use of nuclear energy and materials to protect health, safety, security and the environment. The CNSC is a federal regulator that reports directly to Parliament through the Minister of Natural Resources.
  • The Canadian Nuclear Safety Commission offers an optional pre-licencing engagement service for reactor vendors called the Vendor Design Review (VDR), which can provide early identification and resolution of potential regulatory or technical issues in the design process, particularly those that could result in significant changes to the design or safety analysis. The objective of a pre-licensing review is to increase regulatory certainty while ensuring public safety.
    • 12 SMR design vendors are currently engaged with the CNSC in the vendor design process and are at various stages of review.
  • Learn more at the CNSC website on SMRs.

Supporting Research and Development:

  • Through Atomic Energy Canada Limited (AECL), the federal government funds the Federal Nuclear Science & Technology (FNST) program, which supports core federal roles and responsibilities while maintaining necessary capabilities and expertise at Canadian Nuclear Laboratories (CNL).
    • The FNST program has a funding commitment of $76 million per year for a period of 10 years, from 2015 to 2025.
  • The federal government is also investing $1.2 billion over ten years to revitalize our nuclear laboratories to ensure that Canada remains at the cutting edge of nuclear research and development that will support SMR innovation in Canada.
  • For more information, visit the Canadian Nuclear Laboratories website.

What are the Economics Compared to Alternatives?

For more information, see Canada’s SMR Roadmap and the background Economics and Finance Working Group Report (English only).

Advantage over Diesel:

  • Canada’s SMR Roadmap found strong potential for SMRs in the mining sector, with an estimated 20 to 60% cost advantage in levelized cost of electricity (LCOE) over diesel.
    • These savings were modelled for a 20 MWe reactor representing a mid-sized mine, with a cost of capital that varied from a 6% to a 9% discount rate.
    • SMR’s levelized cost of electricity is sensitive to the cost of capital, development cost, and scale-independent O&M factors
    • The potential for SMRs to cogenerate heat and power for nearby communities could further improve the economics relative to diesel, and improve competitiveness of mining operations in Canada.
  • A reliable source of power in self-generating mines may allow for additional on-site crushing and milling which can account for more than half of the electricity demand for mines.
  • Off-peak power could be utilized to produce hydrogen fuel for mining vehicles.
    • Switching to hydrogen-based technology in mining could reduce GHG emissions in an underground mine by up to 25%.

Upfront Capital Costs:

  • Specific costs will depend on size, technology, location, and other factors.
  • Depending on the business model, upfront capital costs may be assumed by either the nuclear operator or a mining company.
  • First-of-a-kind units suitable for mining are estimated to cost on the order of $200-350M for a 20 MWe SMR, with lower costs thereafter as the supply chain develops.
  • In Canada’s SMR Roadmap, the Economics and Finance working group performed a levelized cost of electricity (LCOE) estimate for off-grid mines using the following assumptions:
    • Capital cost (median) $13,565/KW (approximately $270M for 20 MWe system)
    • Fuel cost (median) $64M where the fuel is replaced every 10 years.
  • Upon achieving technological maturity, SMR capital costs per unit of power are in many cases lower than recent cost estimates for a large reactor.

Fuel Considerations:

  • Some SMRs can be designed to have a long refueling cycle, on the order of 10 years or more. Long refueling cycles:
    • Improve fuel security by minimizing fuel interruptions to ensure reliable performance during both normal operations and contingency events.
    • Could reduce logistical costs and challenges of transporting diesel to self-generating mine sites.
    • Would also reduce exposure to volatility risk associated with diesel prices.
    • Improve proliferation resistance, as fewer shipments of new and spent fuel will be required.

Funds would also need to be allocated for decommissioning and for the disposal of fuel waste and other low- and intermediate-level waste generated from the operation of an SMR.

What are Timelines and Pathways to Deployment?

Technology:

  • SMRs targeting off-grid applications are at a pre-commercial stage, but timelines are moving quickly. A demonstration of off-grid-scale vSMRs for the potential application of remote mines is anticipated in the mid-to-late 2020s.
    • The scale of energy production for demonstration vSMR units are anticipated in the 5-20 MWe range.
    • Given inherent costs and risk associated with first-of-kind technology deployment, commercial demonstrator projects are critical to demonstrating the operational-readiness of SMR technology to potential end-users and alleviating potential challenges related to incorporating new technologies into operations.
  • Certain vendors with designs suitable for the mining market are participating in an ‘Invitation to Site’ a small modular reactor as a demonstration unit at a site owned by Atomic Energy of Canada Limited (AECL) and operated by Canadian Nuclear Laboratories (CNL).
    • CNL targets to have the first demonstration units operating by 2026. SMRs could be available on the market soon afterwards.
    • Three vendors with designs for off-grid scale SMRs have entered CNL’s process.
      • Two have successfully completed the pre-qualification phase;
      • One has progressed through the due-diligence phase, and is currently in negotiations with CNL and AECL to identify a location to construct and operate their demonstration unit. This vendor commenced an environmental assessment for their demonstration project in July 2019.
  • A mining company may choose to work directly in partnership with a SMR vendor to develop and deploy a SMR at a commercial site in advance of a demonstration project to gain a competitive edge.
    • Some mining companies have begun funding feasibility studies for potential SMR deployment.
  • The CNSC has a pre-licencing engagement process called the Vendor Design Review (VDR).
    • The VDR process can provide early identification and resolution of potential regulatory or technical issues in the design process, particularly those that could result in significant changes to the design or safety analysis. The objective of a pre-licensing review is to increase regulatory certainty while ensuring public safety.
    • This allows for an efficient licensing process and a higher quality license application, as the VDR process can be completed independent of a licensing process for a specific site.
    • 12 SMR design vendors have submitted applications to the CNSC vendor design process and are at various stages of review.

Licensing for a Site:

  • According to the CNSC, SMRs licensing timelines could be 7-9 years for first-of-a-kind (FOAK) reactors and 5-7 years for nth-of-a-kind (NOAK) reactors.
    • Simpler, smaller SMRs are expected to have shorter regulatory timelines.
    • The quality of applicant submissions may substantively impact timelines.
    • The CNSC has considered streamlining and reducing timelines where possible.
  • Additional time might be needed for:
    • The applicant to prepare the site assessment, environmental impact assessment, perform stakeholder and Indigenous consultation and engagement or application preparation
    • The CNSC to request information that is required to complete the review
    • Other jurisdictions to participate in and complete an environmental assessment
  • The Impact Assessment Act (IAA) accounts for a risk informed approach on the basis of safety and environmental risk plus the positive contribution to low carbon energy production. Under the IAA:
    • SMRs with a cumulative capacity of less than 200MW(th) are excluded from the Project List
    • SMRs with a cumulative capacity of less than 900MW(th) on a site that is within the boundaries of an existing licensed Class IA nuclear facility are excluded from the Project list.
    • SMRs with a cumulative capacity of more than 900MW(th) threshold are included in the Project list.
  • For SMR projects where the IAA does not apply, provincial or territorial environmental assessment legislation may apply. The CNSC conducts an environmental review integrated within its licensing process.

If a mining company is undergoing a comprehensive environmental assessment prior to establishing an operation, the company may be able to minimize the incremental costs if they plan on having an SMR from the planning stage of the mine.

What are the Different Business Models for Deployment?

There are two broad models possible for the deployment of SMRs, although variants within this general framework are also possible. Regardless of the ownership model, there will be no major impact on the licensing process, and the license will make clear responsibilities for safe construction, operation, waste management, and eventual decommissioning of the reactor.

  • Model 1. The mining company could purchase heat and power from an SMR owner-operator
    • Description of model:
      • A pre-existing nuclear operator would be the SMR owner-operator, selling the heat and power to a mining company. The SMR owner-operator would bring their experience in managing nuclear assets and understanding of CNSC requirements to ensure safe and secure operation, and would manage the nuclear waste.
    • Considerations:
      • The nuclear operator would own and operate the SMR, manage accountability with the CNSC, and be responsible for waste management. The operator would need to develop a plan for low and intermediate level waste, and work with the NWMO on aspects associated with the long-term disposal of nuclear fuel waste.
      • The mining operator would concentrate on mining activities, purchasing heat and power from the SMR operator under an energy purchase arrangement that can enable stable costs over time.
  • Model 2. The mining company could purchase an SMR from a vendor and operate the SMR as an asset of the mine.
    • Description of model:
      • Direct ownership of an SMR may provide a competitive advantage to a mining company looking to enhance economic competitiveness of mining operations, especially if a fleet approach is taken across a mine portfolio.
      • The mining company would need to manage the nuclear waste, including working with NWMO to develop a plan for nuclear fuel waste.
    • Considerations:
      • Mining companies may often have experience operating complex processes, machinery, and systems. An SMR will be an additional system to operate, and could be within the operational capacity of the mine operator.
      • The owner of the SMR would be required to secure a license from the CNSC, and the onus will be on a license applicant to show they are ready and capable to manage the nuclear asset, including management of all waste streams. A first deployment may require additional documentation and capacity development to fulfil requirements of the CNSC.
      • The mining company, as the owner-operator of the SMR would need to work with the NWMO directly to develop a plan for nuclear fuel waste and determine the long-term costs. The owner of the SMR would also be responsible for developing a plan for non-fuel waste and for end of life management and decommissioning.
      • Mining companies that own the SMR would be required to ensure the presence of a sufficient number of qualified workers to carry on the licensed activity safely. The type and number of staff would be determined as part of the CNSC licensing process.
  • There could be variations on the structure of the business arrangements between the SMR vendor, nuclear operator, and mining company, including contracting out operation, leasing the SMR, or other arrangements.

Are there Operational Considerations?

Reduced logistics:

  • SMRs can be designed to have a long refueling cycle, some of which may be on the order of 10 years or more.
  • SMRs would reduce logistical costs and challenges of transporting/handling of diesel fuel to remote and off-grid mine sites.

Personnel:

  • Different or additional personnel may be required to operate an SMR at a mining facility.
    • SMRs would be classified as a Class I facility and will require the presence of a sufficient number of qualified workers to carry on the licensed activity safely.
    • Depending on the business model, these personnel could either be employed by the nuclear operator or the mining company.
  • The type and number of qualified workers would be determined in accordance with the Nuclear Safety and Control Act (NSCA), the Regulations made under the NSCA, and the facility licence.

Security:

  • SMRs offer enhanced safety and security features including passive safety that allows the unit to naturally shut down during an emergency.
  • SMRs fall under the existing risk-informed legislation and regulations to ensure the safety and security of Canadians.
  • Security is a component of the CNSC licencing required to operate an SMR.
  • The Nuclear Security Regulations generally permit a measure of flexibility in the use of alternative approaches while ensuring security will remain commensurate with the proposed activities.
  • Potentially long refueling cycle for SMRs translates to reduced handling and transport requirements of nuclear materials.

How Would Nuclear Waste be managed?

  • All radioactive waste in Canada is safely managed at storage facilities licensed by the Canadian Nuclear Safety Commission.
    • SMR waste will fall under the same legislature and regulations as waste from traditional nuclear energy.
  • Nuclear waste is the responsibility of the owner of the SMR. Depending on the business model, the owner of the SMR could be an experienced nuclear operator, or the mining company. A plan for managing waste is a component of CNSC site licensing.
    • For emerging technologies, the Nuclear Waste Management Organization (NWMO) would provide a fee for service at fair and reasonable costs to determine the long-term waste management requirements and associated costs for the resulting fuel wastes.
    • If a new technology is deployed, the NWMO would work with the fuel waste owners to develop the appropriate funding mechanism for accommodating these wastes.
    • Waste owners will also be responsible for managing other types of waste, such as low- and intermediate-level waste, consistent with Canada’s Radioactive Waste Policy Framework.
  • Canada’s SMR Roadmap highlighted that there is no legislative or regulatory gap for nuclear waste from SMRs in Canada as the framework is well-established.
    • Canada has a plan for the long-term management of nuclear fuel waste, implemented by the NWMO, which involves long-term disposal in a deep geological repository.
    • This plan includes fuel waste from new or emerging reactor technologies, such as SMRs. The Nuclear Fuel Waste Act requires the NWMO to provide its services to new waste owners for managing nuclear fuel waste over the long-term at a fair and reasonable cost.
  • SMRs, and particularly mining-scale vSMRs, may be designed for portability such that they could be transported off-site for safe disposal at licensed facilities.
    • Interim on-site storage may be required in some cases to meet handling and transportation requirements.
  • For more information on Canada’s plan for nuclear fuel waste, visit the Nuclear Waste Management Organization’s webpage.

What are Government and Industry Doing to Develop a Social Licence for the development of Nuclear Energy?

On Nuclear Energy as Part of Canada’s Clean Energy Future:

  • The Government of Canada has been working to highlight the role of nuclear power, including the emerging Small Modular Reactors, as a reliable source of power that can help achieve our climate change objectives.
  • In May 2019, Canada hosted the world for the 10th annual Clean Energy Ministerial, where the IEA released an important report on nuclear energy that stressed the importance of investing in nuclear energy to achieve global climate-change targets.
  • The potential of SMRs is recognized by Provinces as well. In December 2019 the Premiers of Ontario, New Brunswick and Saskatchewan signed an agreement to collaborate on the development and deployment of SMRs in Canada.

On Safety, Security and Waste Management:

  • The Government of Canada continues to emphasize that nuclear power is safe and reliable. Our national nuclear regulator, the CNSC, is globally recognized and is subject to international peer review, nuclear fuel waste management has an established framework in Canada, and a plan is in place for a Deep Geological Repository for Canada’s fuel waste managed by the NWMO.

On Community, Indigenous, and Public Engagement:

  • Canada’s SMR Roadmap included an Indigenous and Public Engagement Working Group which held workshops in New Brunswick, Iqaluit and Alberta to gain knowledge and insights on current views of SMRs as well as identify appropriate approaches for future outreach.
    • This is just a first step and any project will need early and effective engagement to build the right relationships and support for nuclear as a clean, reliable energy source.
    • Members of the SMR Roadmap Steering Committee indicated in the Roadmap that they will build on this initial engagement to meet with interested groups and communities, including First Nations and Métis groups in Ontario, to encourage a meaningful, two-way dialogue on the potential for SMRs in Canada’s clean energy mix.
  • The NWMO has demonstrated a process that enables deep community engagement over the last 10 years. During the design of the site selection process for a DGR, NWMO solicited input from the public and specialists. 22 communities voluntarily came forward to host a DGR and the process of selection of a host community has been based on both technical and community engagement assessments. Two communities remain in the site selection process, and the NWMO plans to select a final site by 2023.
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