KHNP Signs 10-Year Contract with Centrus Energy Amid Geopolitical Tensions
In a strategic move to diversify its nuclear fuel sources, Korea Hydro & Nuclear Power (KHNP) has signed a 10-year supply contract with Centrus Energy, a U.S.-based nuclear fuel supplier. Announced on Feb. 4 in Washington, D.C., this agreement marks a significant shift in South Korea’s nuclear fuel procurement strategy, aiming to reduce its dependency on Russian nuclear fuel amid rising geopolitical tensions.
From 2019 to 2023, South Korea imported approximately 1,947 tons of nuclear fuel, with 662 tons sourced from Russia. This reliance has become increasingly precarious due to Russia’s ongoing conflict with Ukraine and the growing trend of protectionism in global trade, which has heightened concerns over resource weaponization. In response, the United States, which had exited the nuclear fuel business in the 1990s, has reinitiated its production of low-enriched uranium (LEU), with Centrus Energy being the only company approved by the U.S. Nuclear Regulatory Commission to produce enriched uranium since 2021.
The contract with Centrus Energy is expected to significantly reduce KHNP’s dependence on Russian supplies. Although the specific volume of the contract was not disclosed, industry experts anticipate that the introduction of American low-enriched uranium will enhance resource security for both South Korea and the United States. A KHNP representative emphasized the strategic importance of this agreement, stating, “The importance of securing resources in the international nuclear market has increased following the Russia-Ukraine war. The contract with Centrus not only strengthens resource security for both countries but also serves as a catalyst for closer U.S.-South Korea nuclear cooperation.”
Low-enriched uranium, enriched to a concentration of 3-5% U-235, an isotope that induces nuclear fission, is essential for nuclear reactors and is produced by a limited number of authorized companies worldwide. The global market for enriched uranium is dominated by key players such as Orano, Rosatom, Urenco, and CNNC. South Korea’s historical reliance on Russian and French nuclear fuel underscores the strategic necessity of diversifying its supply sources to ensure energy security.
The U.S. re-entry into the nuclear fuel market is a response to geopolitical tensions and the need to secure energy supplies for itself and its allies. This development is part of broader efforts to strengthen U.S.-South Korea cooperation in the nuclear sector, fostering closer diplomatic and economic ties between the two nations.
Source: Business Korea
