Headquarters Daily Report

                         SEPTEMBER 25, 1996

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                    REPORT             NEGATIVE            NO INPUT
                    ATTACHED           INPUT RECEIVED      RECEIVED

HEADQUARTERS                           û                   
REGION I                               û                   
REGION II           û                                      
REGION III                             û                   
REGION IV                              û                   
PRIORITY ATTENTION REQUIRED  MORNING REPORT - REGION II  SEP. 25, 1996

Licensee/Facility:                     Notification:

Babcock And Wilcox Company             MR Number: 2-96-0088
Naval Nuclear Fuel Division            Date: 09/25/96
Lynchburg,Virginia                                                        
Dockets: 07000027 License No: SNM-42       

Subject: ZIRCONIUM FIRE                                                  

Discussion:

At approximately 3:00 p.m. on September 24, 1996, a fire occurred in an  
area where encapsulated fuel components were being machined.  The fire   
occurred in a local ventilation system in the same immediate area as a   
fire that occurred on September 19, 1996.  This local ventilation system 
was used to remove vapors and zirconium fines generated during machining 
operations.  This local ventilation system was not connected to any other
plant HVAC systems.                                                      
                                                                         
A flexible duct hose used for local ventilation of the machining tool    
caught fire while zirconium metal was being machined.  The fire destroyed
the flexible hose and some galvanized metal ducting.  The fire brigade   
quickly responded and extinguished the fire.  The area was evacuated     
until the smoke was cleared.  No damage occurred to an encapsulated fuel 
component that was being machined at the time of the fire.  There was no 
release of licensed material to the environment as a result of the fire. 
                                                                         
The licensee has suspended use of the machining tools and local          
ventilation equipment associated with the fire of September 24 pending   
the outcome of their investigation.                                      
                                                                         
The resident inspector and a region-based inspector, who were on site,   
responded to the fire.                                                   

Regional Action:

Region II plans to issue a letter confirming that the licensee's actions 
to not use the equipment involved in the fires until the licensee's      
investigation is completed.                                              
                                                                         
The Senior resident inspector is currently following the licensee's      
investigation. A special team inspection is scheduled for the week of    
September 30 to review the licensee's fire prevention program for        
machining zirconium.                                                     

Contact:  C. A. Hughey               (804)847-7343
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