President Nicolas Sarkozy, confirming a report in Les Echos, said France will build a second EPR European pressurised water nuclear power reactor.
Sarkozy, who made the announcement on a visit to ArcelorMittal's factory at Le Creusot, gave no indication of where the plant will be built, not when it will start output.
The first of Areva's 1,600 megawatt third-generation reactors to be ordered in France is under construction for EDF at Flamanville.
The president, Areva CEO Anne Lauvergeon and ArcelorMittal CFO Aditya Mittal signed an agreement for a 70 million euro investment aimed at increasing production at the Industeel plant, the nuclear energy company said.
The investment, which will be staggered between 2008 and 2010, will increase ingot production capacity significantly from 35,000 tonnes to 50,000 tonnes per year, it said.
Dieter Furniere of Dexia said it is unclear who will be picked as the operator of the reactor, since EDF does not see the necessity to construct new nuclear capacity before 2020.
In a note to clients, the Dexia analyst mentioned Suez and Poweo as among companies which might be interested in the additional nuclear capacity.
The first commercial EPR plant on which construction began, at Olkiluoto in Finland, is two years behind schedule.
In November, Areva received an order to supply EPRs to China in a contract worth 8 billion euros including fuel, the biggest contract in civilian nuclear engineering.
France has 58 nuclear reactors of earlier models and produces 80 percent of the country's electricity from them.