The two largest uranium producers in the country, both operating in Wyoming, are asking President Donald Trump for relief from one of their greatest challenges: foreign imports.
Denver-based Energy Fuels and Ur-Energy petitioned the Department of Commerce to look into whether imports from dominant uranium producers, like Russia, pose a national security risk. The firms are also asking the president to make adjustments to imports of uranium, according to a statement released by the companies last week.
The companies propose carving out about 25 percent of the domestic market solely for U.S. producers. That would hopefully boost prices and give companies like Energy Fuels an opportunity to grow their businesses, said Paul Goranson, executive vice president of operations for Energy Fuels.
Global uranium prices have hit near historic lows as cheap resources have been made available from mines in countries like Kazakhstan, companies argue.
Industry says that new nuclear power plants in the queue and a depletion of cheaply mined reserves in places like Kazakhstan could lift prices in years to come.
In the meantime, domestic companies are not doing well.
About 40 percent of U.S. uranium demand is served by cheaper resources from Russia, Kazakhstan and Uzbekistan.
Domestic production of uranium only fills about 5 percent of U.S. demand. About half of that comes from Energy Fuels and Ur-Energy, according to the companies.
“I think they feel we are over-reliant on imports,” explained Travis Deti, executive director of the Wyoming Mining Association. “Why would you import from Russia, a country we don’t have the best relations with right now, and Kazakhstan, when you have uranium in your own back yard?”
Restricting imports from these countries could make Wyoming companies more competitive within the U.S., he added.
The Wyoming Mining Association asked state lawmakers for a tax break for uranium last year given the low price environment. Companies in the state say they are only producing to meet their current contracts and that layoffs have and will result.
That request was denied by the minerals committee in June.
There is a downside to the proposed import quota.
It would likely put pressure on utilities that use enriched uranium for power and can buy it cheap from other countries.
“As you would expect, the utilities aren’t happy about this,” Goranson said. “They are the ones that are going to have to bear the burden of the higher prices.”
However, in the past, opening up the domestic market meant taking on fees for importing uranium, which is less flexible, and more punitive, than bartering contracts with U.S. producers, he argued.
Uranium is an incredibly powerful fuel source. A single pellet of uranium fuel holds the same amount of power potential as nearly 2,000 tons of coal. But last year it was the most expensive source of new power for utilities to build.
There are no nuclear power plants in Wyoming, but the state produced about two-thirds of the uranium in the U.S. in 2016.
Sen. John Barrasso came out in support of the investigation into uranium imports.
“For years, government-owned uranium producers in Russia, Kazakhstan, and Uzbekistan have unfairly flooded American markets with cheap uranium,” he said in a statement last week. “The Trump administration needs to expedite this investigation and take action to preserve this vital industry.”
The senator has his own gripe with uranium related to former presidential candidate Hillary Clinton and her position as Secretary of State when Russia’s state-controlled nuclear power agency Rosatom took majority ownership of the Canadian company Uranium One. Uranium One has a mine in Wyoming, north of Casper. Rosatom also had significant uranium control in Kazakhstan.
The New York Times wrote a wave-making story in 2015 looking into whether the Clinton Foundation benefited from the deal. To date, no connection has been verified of greased wheels to get U.S. approval of the Rosatom acquisition.
Barrasso has repeatedly pressed for information in investigating various aspects of the Uranium One deal in his role as chairman of the Senate Committee on Environment and Public Works. The Senate Judiciary Committee also launched an investigation into the matter in October.
Uranium producers in Wyoming have said they are not comfortable with the lingering Clinton-Uranium One saga, fearing it puts their industry in a bad light.
Source: Energy Journal | trib.com