Paris  - French energy technology company Areva said Friday it has signed an agreement with the US Department of Energy (DOE) to construct with the American company Shaw a mixed oxide (MOX) fuel fabrication facility in the United States.

The contract, which is worth nearly 2.7 billion dollars, includes construction of the main MOX facility and all support facilities, start-up of the MOX plant and support of licensing activities associated with the project, Areva said in a press statement.

The plant will remove impurities from surplus weapon-grade plutonium and mix it with uranium oxide to produce MOX pellets to be used in commercial nuclear fuel reactors.

Construction of the facility began on August 1, 2007, in Aiken, South Carolina. It will help the United States dispose of 34 metric tons of surplus weapon-grade plutonium by converting it into fuel that is to be used to generate electricity

Areva head Michael A. McMurphy said the MOX facility "will be the keystone of one of the most important nonproliferation programmes currently under way in the world." (dpa)