Tag Archives: uranium markets

Builiding a Nuclear War Chest: the US Uranium Reserve

The US electricity production from nuclear plants hit at an all-time high in 2019… generating more than 809 billion kilowatt-hours of electricity, which is enough to power more than 66 million homes.  Yet, despite operating the largest fleet of reactors in the world at the highest level in the industry, US ability to produce domestic nuclear fuel is on the verge of a collapse.  

Uranium miners are eager for work, the United States’s only uranium conversion plant is idle due to poor market conditions, and its inability to compete with foreign state-owned enterprises (most notably from China and Russia) is not only threatening US energy security but weakening the ability to influence the peaceful uses of nuclear around the world. Restoring America’s Competitive Nuclear Energy Advantage was recently released by the U.S. Department of Energy (DOE) to preserve and grow the entire U.S. nuclear enterprise…. The first immediate step in this plan calls for DOE to establish a uranium reserve.   Under the Uranium Reserve program, the DOE Office of Nuclear Energy (NE) would buy uranium directly from domestic mines and contract for uranium conversion services. The new stockpile is expected to support the operation of at least two US uranium mines, reestablish active conversion capabilities, and ensure a backup supply of uranium for nuclear power operators in the event of a market disruption [such as that caused the COVID-19 pandemic]. 

NE will initiate a competitive procurement process for establishing the Uranium Reserve program within 2021.  Uranium production in the United States has been on a steady decline since the early 1980s as U.S. nuclear power plant operators replaced domestic uranium production with less expensive imports. State-owned foreign competitors, operating in different economic and regulatory environments, have also undercut prices, making it virtually impossible for U.S. producers to compete on a level-playing field.  As a result, 90% of the uranium fuel used today in U.S. reactors is produced by foreign countries.

Establishing the Uranium Reserve program is exactly what United States needs at this crucial time to de-risk its nuclear fuel supply. It will create jobs that support the U.S. economy and strengthen domestic mining and conversion services….The next 5-7 years will be a whirlwind of nuclear innovation as new fuels and reactors will be deployed across the United States.

Excerpts  from USA plans revival of uranium sector, World Nuclear News, May 12, 2020.  See also Building a Uranium Reserve: The First Step in Preserving the U.S. Nuclear Fuel Cycle, US Office of Nuclear Energy, May 11, 2020.

Why Russia Loves Germany’s Toxic Waste

Environmental groups have voiced concern in November 2019 that Russia is again accepting shipments of uranium tails, a byproduct formed when uranium is enriched, from a German nuclear fuel firm, reigniting a debate over whether the substance meets the definition of nuclear waste.  The shipments of the toxic compound – also called uranium hexafluoride – were halted in 2009 over revelations that Russia was accepting it from foreign customers and storing it in the open. At that time, Rosatom, Russia’s nuclear corporation, bowed to environmental pressure and promised to no longer import the radioactive substance.

But German government documents revealed in November 2019 by Greenpeace and the Russian environmental group Ecodefense show that the German-based enrichment company Urenco resumed the uranium tail shipments as long ago as May 2019.  According to Urenco’s contract with the Russian nuclear-fuel giant Teksnabeksport (Tenex), a subsidiary of Rosatom, some 12,000 tons of uranium tails are set to be delivered to Novouralsk, near Yekaterinburg by 2022. Four thousands tons have been sent so far….

Urenco, Germany

Uranium hexafluoride, also called depleted uranium, is a colorless radioactive powder that is produced as a byproduct of enriching uranium for use as fuel in nuclear power plants. Urenco, which is a partnership involving German, British and Dutch energy firms, has operated an enrichment facility in Gronau, Germany since 1985.  This facility stores depleted uranium in the open air. In the early 1990s, Russian opened its doors to reprocessing depleted uranium from foreign customers. A previous contract between Tenex and Urenco envisioned the import of 100,000 tons of uranium tails between 1996 and 2009.

The issue of whether uranium tails in fact constitute nuclear waste depends on whom you ask. Both Rosatom and Germany’s nuclear industry classify uranium hexafluoride as a recyclable material. The US Nuclear Regulatory Commission, however, has long held that uranium tails should be classified as nuclear waste – a view that Bellona, Ecodefense and Greenpeace share.  But while Rosatom asserts that uranium tails are valuable raw material, the motive for importing them is unclear. By most estimates, Russia already holds nearly 1 million tons of uranium tails from its own fuel production – making the need for another 12,000 tons from abroad questionable.

Charles Digges, Russia resumes importing depleted uranium from Germany, breaching old promises, Bellona, Nov. 1, 2019

Choking Uranium Markets to Stop Nuclear Weapons

Making nuclear weapons requires access to materials—highly enriched uranium or plutonium—that do not exist in nature in a weapons-usable form.   The most important suppliers of nuclear technology have recently agreed guidelines to restrict access to the most sensitive industrial items, in the framework of the Nuclear Suppliers Group (NSG). Nevertheless, the number of countries proficient in these industrial processes has increased over time, and it is now questionable whether a strategy based on close monitoring of technology ‘choke points’ is by itself a reliable barrier to nuclear proliferation.  Time to tighten regulation of the uranium market?

Not all the states that have developed a complex nuclear fuel cycle have naturally abundant uranium. This has created a global market for uranium that is relatively free—particularly compared with the market for sensitive technologies….

Many African states have experienced increased investment in their uranium extractive sectors in recent years. Many, though not all, have signed and ratified the 1996 African Nuclear Weapon Free Zone (Pelindaba) Treaty, which entered into force in 2009. Furthermore, in recent years, the relevant countries have often worked with the IAEA to introduce an Additional Protocol to their safeguards agreement with the agency…

One proliferation risk inherent in the current system is that inadequate or falsified information connected to what appear to be legitimate transactions will facilitate uranium acquisition by countries that the producer country would not wish to supply….

A second risk is that uranium ore concentrate (UOC) is diverted, either from the site where it was processed or during transportation, so the legitimate owners no longer have control over it. UOC is usually produced at facilities close to mines—often at the mining site itself—to avoid the cost and inconvenience of transporting large quantities of very heavy ore in raw form to a processing plant.,,,UOC is usually packed into steel drums that are loaded into standard shipping containers for onward movement by road, rail or sea for further processing. The loss of custody over relatively small quantities of UOC represents a serious risk if diversion takes place regularly. The loss of even one full standard container during transport would be a serious proliferation risk by itself. There is thus a need for physical protection of the ore concentrate to reduce the risk of diversion at these stages.

A third risk is that some uranium extraction activity is not covered by the existing rules. For example, uranium extraction can be a side activity connected to gold mining or the production of phosphates. Regulations should cover all activities that could lead to uranium extraction, not only those where uranium extraction is the main stated objective.

Restricting access to natural uranium could be an important aspect of the global efforts to obstruct the spread of nuclear weapons

Excerpts, from  Ian Anthony and Lina Grip, The global market in natural uranium—from proliferation risk to non-proliferation opportunity, SIPRI, Apr. 13, 2013

Nuclear Energy and the Supplies of Uranium: 2013

Uranium is poised to rebound from a second annual decline as Japan considers restarting its atomic plants almost two years after the Fukushima disaster and China pushes ahead with the world’s biggest nuclear building program…A revival in demand from Japan is raising the prospect that supplies of the radioactive metal will shrink at the same time as China continues with a project to increase its nuclear power capacity at least fivefold by 2020. That’s a boost for uranium producers such as Perth, Australia-based Paladin (PDN) Energy Ltd. It’s also a blow for liquefied natural gas exporters including Qatar and Australia, which have helped plug Japan’s power shortage since the earthquake that led to the meltdown at the Fukushima Dai-Ichi plant in March 2011.,,,

The uranium forecasts for 2013 ranged from $45 to $62.60 a ton in the Bloomberg survey conducted Dec. 10 to Dec. 19. That compares with a three-year high of $73 in February 2011, according to data from Roswell, Georgia-based Ux Consulting, which advises the nuclear industry. The fuel averaged $56.80 in 2011 and was $43 a pound on Jan. 3.  The price plunged as low as $49.75 a ton in March 2011 after Japan’s biggest earthquake on record and a subsequent tsunami damaged reactors at the Fukushima site run by Tokyo Electric Power Co. (9501), releasing radiation and causing the evacuation of 160,000 people. The government responded to the disaster by keeping all 54 of the nation’s then-functioning atomic plants shut after safety checks, while countries from China to France reviewed their nuclear policies and Germany said it would close its facilities….

Speculation that uranium demand will rebound has grown since Dec. 16, when Japan’s Liberal Democrat Party won a landslide election victory. The previous administration of the Democratic Party of Japan, which ordered the shutdowns, planned to phase out nuclear power by the end of the 2030s…

Stockmarket investors have been betting that the resumptions will occur and boost uranium demand just as China pushes on with plans to build at least 26 new reactors. At the same time, analysts are predicting a drop in the price of LNG as Japan’s utilities seek to reduce their electricity-generation costs by switching back to nuclear.

Paladin, which operates two uranium mines in Africa and has exploration assets in Australia, rose 22 percent in Sydney in the two days through Dec. 18. Energy Resources of Australia Ltd. (ERA), whose Ranger mine in the Northern Territory produces about 10 percent of the world’s mined uranium, advanced 13 percent over the same period. Australia has the world’s largest known deposits of the fuel, according to the World Nuclear Association.

The cost of Japan’s LNG imports almost doubled in the past three years, reaching a record $18.07 per million Btu in July, according to Finance Ministry data. Purchases for the first 11 months of last year increased 11.5 percent from the same period in 2011 to a record 79.5 million tons, according to data from the ministry….The country must restart reactors quickly because of the price of fossil fuels, LDP General Council Chairman Hiroyuki Hosoda said Nov. 27.

Ben Sharples. Uranium Rebound Seen as Japan Considers Nuclear: Energy Markets, Bloomberg, Jan. 4, 2012