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US DOE issues process for utility waivers of Russian enriched uranium ban

US nuclear operators will have to show alternatives unreasonably priced

Russia supplies one-fifth of enrichment to US reactor operators

Congress passed ban but allowed waivers through end of 2027

The US Department of Energy has issued details of a process it will use to evaluate requests for a waiver of a ban on imports of Russian enriched uranium, allowing US utilities to immediately seek such waivers to avoid potential reactor outages.

Russia supplies about 20% of US nuclear plant enrichment needs, but Congress April 30 banned future imports in response to Russia’s invasion of Ukraine in 2022. Nuclear industry officials have said exceptions are needed in the short term while the US develops more capacity to convert mined uranium to gas form and enrich it domestically.

A draft Federal Register notice on the process was posted to the DOE website late May 21.

The ban formally takes effect Aug. 11 but allows the DOE to issue waivers through the end of 2027 if no “alternative viable source” of LEU is available for a nuclear operator or import of Russian LEU is found to be in the national interest. The DOE, in the draft Federal Register notice said it was interpreting that to mean that an alternative would be deemed available if it could be secured at reasonable price “in the context of overall market conditions” and in a timely fashion given the long lead times needed for uranium to be processed and fabricated into nuclear fuel.

One goal is to avoid reactors having to shut because of a lack of nuclear fuel, the DOE said.

The language in the notice appeared to be somewhat softer than that the DOE had articulated during an April 30 meeting with industry officials, according to one nuclear fuel official. At the April 30 meeting, the DOE had said it would want concrete proof that no alternate sources of enriched uranium were available in inventory or on the market, even at much higher prices, according to several participants.


‘Reasonable market conditions’


“But now they’re saying reasonable market conditions … it gives them, I think, a little bit of wiggle room,” said an industry official, speaking on condition of anonymity to discuss DOE internal decisions. “DOE didn’t want to be the bad guy” and perhaps spur the closure of nuclear reactors due to prevailing enriched uranium prices, the person said.

Prices of uranium conversion and enrichment, as well as to a lesser degree mine uranium concentrate, have climbed sharply since the 2022 invasion of Ukraine. Platts, part of S&P Global Commodity Insights, has assessed U3O8 prices about double what they were in 2021, while uranium hexafluoride and uranium conversion prices have climbed proportionally even more.

Waiver requests will be presumed to be in the national interest if they are needed to maintain the viability of a critical US nuclear fuel company or to support an existing arrangement to supply fuel to a third country, the DOE said in the notice. Nuclear industry officials have noted that some Russian enriched uranium is used by US fuel fabricators to supply foreign nuclear operators, notably in Mexico and Japan.

The DOE said it will seek to provide decisions on waiver requests within 30 days of application.


Russian supplier declares force majeure


The waiver process became more complicated when Tenex, the subsidiary of Russian state nuclear company Rosatom that enriches uranium, sent a notice of force majeure last week to US end-users, citing the enactment of the ban. The notice, a copy of which was obtained by Commodity Insights, said uncertainty about the waivers would cause Tenex to either stop enriching and delivering uranium for US customers or receive financial guarantees that customers would pay for the material regardless of their ability to secure a waiver.

The notice went to all US customers of Tenex, including Constellation Energy, Duke Energy and Centrus Energy, according to two nuclear industry officials who spoke on condition of anonymity to discuss legal matters. Constellation and Duke are the two largest US nuclear operators; Centrus is a reseller of enriched uranium from Russia and is ramping up an enrichment facility of its own in the US.

Tenex told customers to elect either to accept an indefinite delay in receiving their enriched uranium or make financial arrangement to pay regardless of a waiver within 60 days of May 14, the date of the notice.

Constellation and Centrus declined to comment on the force majeure notice, although Centrus officials have said they will seek a waiver. Duke Energy did not immediately reply to a request for comment.

Source: S&P Global