Small Modular Reactors (SMRs) for Mining

Key Facts:

1. Small Modular Reactors
2. Federal Government Engagement
3. Economic Comparison to Alternatives
4. Timelines and Pathways to Deployment
5. Business Models for Deployment
6. Operational Considerations
7. Management of Nuclear Waste
8. Developing a Social Licence for Nuclear Energy

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

1. Small Modular Reactors

• Small Modular Reactors (SMRs) are a category of nuclear reactor designs that are smaller in power output and physical size. As advanced reactor technologies, many SMR designs offer enhanced safety features.
• SMRs are designed to 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 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 Action Plan and SMR Roadmap for more information.

2. Federal Government Engagement

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. In consultation with Canada’s mining sector, 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.
• In 2019, Canada’s Mines Ministers launched the Canadian Minerals and Metals Plan (CMMP), providing a vision, targets and actions to position Canada as the leading mining nation. The Plan highlights the opportunity that SMRs can provide for mining operations to lower environmental footprints, drive cost efficiencies, and build infrastructure that can benefit surrounding communities.
  • The Plan identified alternative and renewable energy as a key area for action, including the need to study the feasibility, role, and potential market of SMRs in mining operations as a means to provide reliable energy and reduce GHGs and costs.
  • Beyond environmental performance, SMRs are also recognized for their potential to unlock future mineral deposit exploration, and provide energy security to historically underserved and remote communities.
• Canada’s SMR Action Plan was launched in December 2020, which brought together more than 100 partners and outlines more than 500 actions being taken to advance the development, demonstration and deployment of SMRs for multiple applications at home and abroad.
  • The Action Plan is the result of a pan-Canadian effort bringing together key enablers from across Canada, including the federal government, provinces and territories, Indigenous Peoples and communities, power utilities, industry, innovators, laboratories, academia, and civil society.
  • More than 40 of these key enablers identified mining operations in Canada as a potential end-use application for SMRs in their Action Plan chapter submissions.
  • The Action Plan identified the Canadian mining industry’s interest in the development of SMR technology, as it is well-positioned to be a primary end-user and beneficiary of SMRs. The industry recognizes SMRs’ potential long-term cost savings and environmental benefits for off-grid mining operations.
  • To progress the development and commercialization of SMRs in Canada, the Government of Canada will meet annually with senior leadership of Canada’s SMR Action Plan. These meetings would convene the Canadian nuclear family, from mining to production, as well as Indigenous representatives.
  • For those interested, please contact the Nuclear Energy Division of Natural Resources Canada through your organization to join Canada’s SMR Action Plan.
• A clean and competitive mining sector is also a priority in Canada’s Strengthened Climate Plan: A Healthy Environment and a Healthy Economy, announced on December 11th, 2020 to build on the Pan-Canadian Framework on Clean Growth and Climate Change. Canada’s Climate Plan noted clear interest from provincial partners in utilizing SMR technologies to reduce emissions, decarbonize heavy industry, and spur economic development.

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 has an independent, credible and expert administrative tribunal. The CNSC's arms-length governance structure, in particular the Commission's arms-length decision-making authority, ensures that it remains independent from government, licensees and staff. The Commission does not report to a minister, but rather directly to the Parliament of Canada (through the Minister of Natural Resources). Decisions made by the Commission are not subject to government or political review and cannot be overturned by the Government of Canada. Only the Federal Court or the Supreme Court of Canada may review and overrule a decision made by the Commission.
• The CNSC offers optional pre-licensing engagement with potential applicants, as well as a pre-licensing vendor design review service, to enable the identification and resolution of safety issues in advance of the formal licensing process for SMR licensing applications. This work supports the CNSC’s objectives of being a modern regulator that uses science-based, risk-informed and technically sound practices, and that has clear regulatory requirements and guidance.
• 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 serves the collective interests of 14 federal departments and agencies in the areas of health, nuclear safety and security, energy and the environment 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.
• In addition, the federal government is investing $1.2 billion over ten years to revitalize AECL’s Chalk River Laboratories to transform it in to a world-class, state-of-the-art nuclear science and technology campus.
  • For more information, visit AECL or CNL’s websites.
• The federal government has also announced investments in SMR technology development and deployment across Canada, including:
  • A $50.5 million investment for Moltex Energy Canada Inc. to develop a technology that will produce emissions-free energy through recycling existing spent nuclear fuel.
  • A $5 million investment in NB Power, and more than $500,000 to the University of New Brunswick in support of SMR development and deployment in the province.
  • A $20 million investment in Terrestrial Energy that will enable an innovative Ontario technology company to take a critical step toward commercializing its cutting-edge SMR technology, creating significant environmental and economic benefits for Canada.
• These commitments complement Ontario’s investment of $26 billion to extend the life of Ontario’s nuclear reactor fleet past the middle of the century, enabling ramped up supply chains well suited to seizing the SMR opportunity

3. Economic Comparison to Alternatives

• For more information, see Canada’s SMR Roadmap and the background Economics and Finance Working Group Report(PDF) (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 the 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 nuclear 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 in 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 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.

4. 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 SMR as a demonstration unit at a site owned by Atomic Energy of Canada Limited (AECL) and operated by Canadian Nuclear Laboratories (CNL).
  • CNL has established a vision to have the first demonstration units operating by 2026. SMRs could be available on the market soon afterwards.
  • Four proponents with reference SMR designs for off-grid scale SMRs have entered CNL’s process.
    • Three have successfully completed the pre-qualification phase;
    • One has progressed through the due-diligence phase, and is currently in preliminary, non-exclusive discussions with CNL and AECL regarding land arrangements, project risk management, and contractual terms. This proponent, namely Global First Power, commenced an environmental assessment for their demonstration project in July 2019.
• A mining company may choose to work directly in partnership with an SMR vendor to develop and deploy an SMR at a commercial site in advance of a demonstration project to gain a competitive edge.
• The CNSC has a pre-licencing engagement process called the Vendor Design Review (VDR).
  • The VDR process can provide opportunities for 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.
  • If the vendor or proponent addresses issues raised in the VDR process early, it may enable efficiencies in the licensing process and a higher quality licence application, as the VDR process can be completed independent of a licensing process for a specific site.
  • 12 SMR design vendors have engaged with the CNSC in the vendor design process and are at various stages of review.

Licensing for a Site:

• According to the CNSC, SMRs licensing timelines for all phases of licensing, excluding operation, could be 7-9 years for first-of-a-kind (FOAK) reactors and 5-7 years for nth-of-a-kind (NOAK) reactors.
• These timelines are approximate and take into consideration, for each licensing stage:
  • The time required to conduct a technical assessment of the SMR.
  • The time required to engage and involve stakeholders and Indigenous communities.
  • Government and stakeholder decision making processes.
  • Sufficient time for the licensee to complete their licensed activities at each specific stage.
• Other factors may shorten SMR licensing timelines, such as:
  • Simpler, smaller SMRs may have a potential for shorter regulatory timelines.
  • The quality of applicant submissions may substantively impact timelines, and higher quality application submissions may reduce regulatory timelines.
  • The CNSC can leverage VDR results to the extent practicable where the applicant references the vendor’s information and addresses any issues identified by the CNSC.
  • CNSC experience or familiarity with previously submitted designs by the same operator, or of the same design of SMR.
  • A mining company may be able to minimize incremental costs and time if they plan on having an SMR from the planning stage of the mine, which would result in all potential activities being assessed from the outset.
• Additional time in CNSC licensing timelines might be required for:
  • The CNSC, or the applicant, to engage with the public and Indigenous groups on SMR projects. The CNSC has a duty to consult on any project that might adversely impact potential or established Indigenous or treaty rights.
  • The applicant to prepare and submit supplemental information identified during the assessment as necessary to complete the licensing and any environmental/impact assessments.
  • The proponent or vendor to address issues that arise during site preparation, construction and commissioning.
• An SMR is subject to an impact assessment under the Impact Assessment Act (IAA) if it is proposed to:
  • Have a combined thermal capacity of more than 900MW(th) on a site that is within the boundaries of an existing licensed Class IA nuclear facility.
  • Have a combined thermal capacity of more than 200MW(th) on a site that is not located within the boundaries of an existing licensed Class IA nuclear facility.
• An SMR proposed on federal lands that does not require an impact assessment undergoes an IAA federal lands review in addition to the CNSC’s regular environmental protection review within its licensing process.
• An SMR may also be subject to an environmental assessment under provincial or land claim legislation.

5. 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, the licensee is responsible for site preparation activities, 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 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. However, global experience has shown that there is a steep learning curve for a new nuclear operator.
  • The owner of the SMR would be required to secure a licence from the CNSC, and the onus will be on a licence applicant to demonstrate to the Commission of the CNSC that they are qualified to conduct the licensed activities in accordance with the Nuclear Safety and Control Act (NSCA). A first deployment by a mining company will require significant 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 be responsible for developing a plan to ensure safe oversight of the SMR facility over its entire lifecycle, including management of 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 out 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.

6. 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 could reduce logistical costs and challenges of transporting and/or handling 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 fall under the Class I Nuclear Facilities Regulations. The applicant will be required to demonstrate the presence of a sufficient number of qualified workers to carry on the licensed activity safely. Some workers may be subject to certification by the CNSC.
  • Depending on the business model, these personnel could either be employed by the nuclear operator or the mining company but would need to be under direct control of the licensee.
• The type and number of qualified workers would be determined in accordance with the NSCA, the Regulations made under the NSCA, the facility licence, and the corresponding licence conditions handbook.

Security:

• Many SMR designs offer enhanced safety and security features such as 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.
• Provisions to ensure physical and cybersecurity of the facility is a key consideration in the licensing reviews and decision making by the Commission to issue a licence. These provisions are subject to compliance during operation.
• Potentially long refueling cycles for some SMR designs could translate into reduced handling and transport requirements of nuclear materials.

7. Management of Nuclear Waste

• 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 legislation and regulations as waste from traditional nuclear energy.
  • SMR licensees will be required to have programs in place to safely manage the radioactive wastes that result from their operations.
• The Nuclear Waste Management Organization (NWMO) is responsible for safely managing Canada's used nuclear fuel over the long term. Nuclear waste is the responsibility of the owner of the SMR (polluter pays principle). 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 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.
• 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.
• On November 16, 2020, the federal government launched an inclusive engagement process to modernize Canada’s Radioactive Waste Policy. Through this process, the Government of Canada will engage interested Canadians, including Indigenous peoples, waste producers and owners and other levels of government. The key objectives of the policy review are to elaborate on the existing policy in order to provide greater leadership on radioactive waste management and to ensure that Canada continues to meet international practices, align with best available science, and reflect the values and principles of Canadians.
• 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.

8. Developing a Social Licence for 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 field of SMRs, 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, which Alberta later signed in April 2021.
• Canada’s Strengthened Climate Plan: A Healthy Environment and a Healthy Economy, announced on December 11th, 2020, specifically noted the intention of the Government of Canada to work with interested parties, including Indigenous communities and organizations, to advance the development and deployment of SMRs.

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:

• In 2018, Canada’s SMR Roadmap held workshops in New Brunswick, Nunavut and Alberta to gain preliminary knowledge and insights from Indigenous groups and organizations on current views of SMRs as well as identify appropriate approaches for future outreach.
  • The key recommendation from the workshops and the report of the Indigenous and Public Engagement Working Group was for governments and industry to engage meaningfully, early and often, well before any specific projects.
• In Canada’s SMR Action Plan, Canada and all participants endorsed a statement of principles that included the intention to explore meaningful and long-term economic partnership opportunities with Indigenous, remote and northern communities. Canada recognizes that genuine, meaningful partnerships with Indigenous Peoples are a critical component for Canada to capture the SMR opportunity.
  • As part of its commitment to ongoing, meaningful engagement on SMRs, NRCan launched an ongoing Indigenous engagement process in 2020 to engage Indigenous groups and organizations on SMRs across Canada.
  • More than 30 participants, including governments and industry, have committed to over 57 actions specific to Indigenous engagement and partnership on SMRs in the SMR Action Plan. 
• 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 deep geological repository (DGR), NWMO solicited input from the public and specialists. Initially, 22 communities voluntarily came forward to learn more about hosting a DGR and the process of selecting site has been based on both technical as well as municipal and Indigenous engagement assessments. Two communities remain in the site selection process, and the NWMO plans to select a final site by 2023.