updated 5/16/2008 6:00:13 PM ET 2008-05-16T22:00:13

Canada's state-owned atomic energy company said Friday that it is scrapping development of a nuclear reactor project designed to produce medical radioisotopes after it failed a number of tests.

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The decision leaves Atomic Energy of Canada Ltd.'s aging reactor to continue generating half the world's supply of medical isotopes.

Canada's Natural Resource Minister Gary Lunn and Health Minister Tony Clement said in a joint statement that the MAPLE project underwent a number of tests between January and April, all of which it failed.

The reactors have never worked and have never produced medical isotopes, even after 12 years, Lunn said. The project has also faced regulatory challenges and commercial disputes that have cost hundreds of millions of dollars in private and public funds; technical malfunctions that could not be resolved; and reviews conducted by the Auditor General which revealed significant concerns about the costs, the delays, and the technical issues, he said.

AECL said the decision to stop development of the MAPLE reactors is based on the costs of further development, as well as the time frame and risks involved with continuing the project.

"We are making the right business decision given the circumstances," AECL president and chief executive officer Hugh MacDiarmid in a statement Friday. "This was a difficult choice given the tremendous efforts expended by our people on development of the MAPLE reactors. Nevertheless, our board of directors and senior management have concluded that it is no longer feasible to complete the commissioning and startup of the reactors."

Isotopes vital for body scans
The MAPLE reactors, described as the first in the world dedicated entirely to medical isotope production, were intended to supply the entire global demand for a radioactive substance called molybdenum-99. Molybdenum-99 is processed and packaged for sale to big hospitals and specialized pharmacies, which turn the substance into technetium-99. Technetium-99 is injected into patients undergoing body scans to assess a wide variety of conditions, including cancer, heart disease and bone or kidney illnesses.

AECL said its 51-year-old National Research Universal reactor at the Chalk River facility in eastern Ontario will remain operational under a contract with health care company MDS Nordion. This reactor provides half the world's supply of isotopes, which are used in about 25 million medical diagnoses and treatments each year.

The AECL signed a 40-year contract with MDS Nordion in 2006 to supply it with isotopes, said AECL Dale Coffin in an interview Friday.

He would not say if AECL faces penalties or fines from MDS Nordion if it cannot deliver medical isotopes

AECL was under the international spotlight late last year after the Canadian Nuclear Safety Commission forced the shutdown of the NRU reactor, causing a shortage of radioisotopes, which forced postponement of medical treatments for cancer patients in many countries.

Reactor closed last year
The Canadian government bypassed the order of the safety regulator and the reactor was restarted.

The reactor "is operating safer than it ever has been before in its entire history. This decision made today is about good governance," Lunn said.

MDS President and CEO Stephen P. DeFalco said the company was "disappointed" by the latest decision.

"The company will evaluate all options and pursue appropriate steps to protect the interests of patients, its customers and its shareholders," he said in a statement.

The Canadian Nuclear Safety Commission did not immediately respond to calls.

The NRU reactor has an operating license from the Canadian Nuclear Safety Commission valid through October 2011, and AECL said it will work with the commission and MDS Nordion to continue production beyond that date.

But questions linger about how long the operating license for the NRU reactor can be extended.

"Now they're going to have to go back to the commission again and ask for another licence extension," said Shawn Patrick Stensil, a Greenpeace researcher on energy issues. "The NRU started in 1957. How long can you run a reactor before you should just shut it down?

Canada's federal auditor general reported last year that the NRU reactor is "nearing the end of its useful life."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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