Russian uranium ban aims to revive US supply
The U.S. ban on Russian uranium imports will accelerate efforts to revive the domestic nuclear fuel industry and redefine the global market.
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In May, President Joe Biden signed into law the 'Prohibiting Russian Uranium Imports Act', which bans uranium imports from Russia, a trade worth around $1 billion annually.
The ban, a response to Russia’s invasion of Ukraine, will come into effect 90 days from the signing of the Act and releases $2.7 billion in government aid to rebuild the U.S. nuclear fuel industry which has been in decline since the early eighties and is, today, virtually non-existent.
The United States today imports over 90% of the uranium needed to fuel its nuclear fleet, according to the National Mining Association, mostly from Canada, Kazakhstan, and Russia, as well as smaller producers.
It is in the enrichment process that Russia has left the United States behind.
Around a quarter of the uranium entering the United States, measured in separative work units (SWU – the standard measure of enrichment services) was from Russia which holds some 44% of global enrichment capacity, according to the U.S. Energy Information Administration (EIA).
The concern is that many U.S. utilities have become so reliant on Russia’s enriched uranium that an outright ban could lead to shutdowns, something that can be avoided if the United States works to rebuild its own industry.
“It is critical to our national security and our energy security that we move immediately to revitalize our domestic uranium conversion and enrichment capabilities to ensure an uninterrupted supply of fuel,” a spokesperson for the U.S. utility Constellation said in an emailed response to questions.
The ban doesn’t enforce an immediate Russian-uranium cold turkey on the U.S. utilities, which have been granted a work around while the industry is rebuilt in the form of waivers.
Sources of uranium for U.S. nuclear power plants, 1950-2022
(Click to expand)
Source: U.S. Energy Information Administration (IEA)
Rush for exemptions
The Act includes a waiver, until Jan 1, 2028, that allows utilities to continue to import from Russia’s TENEX if there are no viable alternative sources or if importation of the uranium is in the national interest.
The nuclear power industry is pushing the government to implement the waivers as soon as possible.
New capacity will take years to construct and the United States needs to move quickly to develop an efficient and predictable waiver process, a spokesperson for the Nuclear fuels and services provider Centrus Energy said.
Centrus’ facility in Piketon, Ohio, has already begun enrichment and is the first U.S.-technology uranium enrichment plant since 1954.
The demonstration cascade is expected to be soon joined by thousands of additional centrifuges to produce High-Assay Low Enriched Uranium (HALEU) for the next generation reactors due online in early 2030, and also low-enriched uranium (LEU) for the existing fleet.
Meanwhile, Urenco, which currently runs the only active commercial enrichment plant in the United States, believes that producers are taking sufficient actions to mitigate risks and preparing for a transition away from reliance on Russian exports.
"There are sufficient supplies available today and new capacity will come online later this decade," an Urenco spokesperson said.
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Sudden cut off
As the United States rebuilds it enrichment capabilities, driven by the Russia ban and spurred on through government subsidies, the global uranium market is being reshaped.
The increased isolationism of Russia from the West runs the risk of the fuel supply being divided along BRIC (Brazil, Russia, India, China, and South Africa) and the West lines, with Kazakhstan, the world’s largest producer of uranium, likely falling into the BRIC camp, says Scott Melbye, Chief Executive Officer and President of Uranium Royalty Corp.
“It's very important that the West develop its resources and nuclear fuel cycle in places like Canada, United States and Australia,” says Melbye, who is also Executive Vice President at Uranium Energy Corp (UEC).
The waiver clause will help the transition, says Melbye, who has held various leadership positions in major uranium mining companies and industry organizations in his more-than 40 years in the nuclear industry.
But the wildcard is Russian President Vladimir Putin, who could choose to respond to the ban with an outright and sudden cut off of all exported enriched uranium, he warns.
“A number of U.S. utilities will sign on to the waiver, but we’re just kicking the can down the road. The sooner we get off Russian supply, the sooner we won’t be vulnerable to a cut off by Putin,” Melbye says.
In fact, while Russia would lose the billion-dollar-a-year income by cutting off the United States, rescinding on present day contracts may be in their interest.
Many uranium contracts with Russia were written years ago when prices were substantially lower and tearing up those export agreements could lead to more profitable sales conditions later down the road.
The spot price for uranium stood at $89 end-April compared to around $30 at the end of 2020.
The uncertainty surrounding the market, the waivers, and Russia’s possible response to the ban, have left many in the industry nervous.
“The global markets are just not ready for a complete ban,” says Nikko Collida, Vice President, Business Development, at ConverDyn which provides uranium conversion services from the Metropolis Works conversion facility as part of the nuclear fuel supply chain.
“It's not clear that the United States is ready to rapidly wean itself off Russian supply and, while waivers are expected to be the solution near- and mid-term, if Russia pulls the rug out from under this, it’s going to be pretty catastrophic for the market.”
Rebuilding supply
Melbye is optimistic that the United States is on route to rebuilding its own supply and that the Russia ban was the necessary step to release funds, both in the United States and globally.
United States, Britain, France, Japan, and Canada – the so-called Sapporo 5 – joined forces on the sidelines of the April 2023 G7 meeting, and again following the COP28 meet in December, to collectively mobilize and invest $4.2 billion to expand enrichment and conversion capacity over the next three years.
All members of the group have made concrete commitments to expanding the nuclear fuel supply over the next few years, including Orano investments in France, a hike in enrichment capabilities in Japan, and the launch of a domestic HALEU program in Britain.
Backed by congressional funds, the United States is also moving quickly, with five members of the Uranium Producers of America, of which Scott Melbye is also president, announcing plans to restart uranium production in Wyoming, Texas, Colorado, and Utah.
“I don't have any concerns that the West can't be independent of Russia,” says Melbye.
“Before the Soviet Union broke up, we were self-sufficient in the West and, while we dialed back our plans to expand our capacity and infrastructure to make room for the Russians, now we just have to go the other way,” Melbye says.
By Paul Day