There is great potential for several new uranium production markets as the U.S. and Europe look to diversify away from Russia for new nuclear energy pursuits. The U.S. and several European countries have announced ambitious nuclear power plans for the coming decades, in support of a green transition. However, the lack of uranium production outside of Russia is posing a threat to achieving these plans. Sanctions introduced on Russian energy and other products, following the 2022 Russian invasion of Ukraine, have led to global shortages of natural gas, uranium, and other critical materials. This has driven several state powers to diversify their supply chains and increase the regional production of a variety of energy sources and related materials. This means we could soon see new uranium-producing markets emerge in Europe and the U.S.
While the U.S. and Europe imposed strict sanctions on the import of energy products, such as oil and gas, it was more difficult to do the same with uranium due to the lack of alternative supplies. The decrease in Russian uranium imports has led to delays in several nuclear power projects in the U.S., despite the government’s ambitious nuclear project pipeline.
Russia only mines 5 percent of the global uranium supply domestically, while Russia’s Rosatom State Nuclear Energy Corporation has several subsidiaries that mine uranium ore abroad, in countries such as Kazakhstan. Russia controls around 40 percent of the global processing facilities and 46 percent of the world’s total enrichment capacity. It is also way ahead of its competitors when it comes to producing innovative types of uranium, such as the high-assay low-enriched uranium (HALEU) with a 15-19.75% share of enrichment, needed to power the latest generation of nuclear reactors.
As Europe diversified away from Russian supplies of uranium, Kazakhstan became a major supplier, providing 26.82 percent of the EU’s uranium in 2022. Kazakhstan has been steadily increasing its production capacity in recent years. Meanwhile, Niger provided 25.38 precent of the EU’s supply, while Canada delivered 21.99 percent. However, Europe and the U.S. must develop their own uranium production capabilities if they want to avoid Russian-linked uranium production altogether, as well as ensure they remain competitive in the nuclear energy field.
In December, the U.S. voted on a bill prohibiting the import of Russian low-enriched uranium to the U.S. until 2040. This follows several stricter sanctions on Russian energy and recent innovations in the U.S. energy industry, such as increased LNG output and improved uranium production capabilities. In November, Centrus Energy Corp announced it had achieved the production of the first 20 kilograms of high-assay low-enriched uranium (HALEU) in the U.S. Part of the U.S. Department of Energy’s (DOE) HALEU Demonstration project, the project provided the first production of its kind in the country in over 70 years. The DOE hopes to achieve production at 16 advanced centrifuges at an enrichment facility in Piketon, Ohio.
Piketon is currently the only facility licensed to produce this type of uranium, but, if successful, the U.S. could establish other production sites. Centrus was two months ahead of schedule in delivering the first 20kg of HALEU. The company’s President and CEO, Daniel B. Poneman, stated, “This critical milestone is essential to meeting the Department’s near-term HALEU needs while laying the groundwork for the full restoration of America’s lost domestic uranium enrichment capacity… We are committed to working with the Department and industry to build a public-private partnership so that we can scale up production in the coming years to meet the full range of commercial and national security requirements for enriched uranium.” Centrus hopes to boost its annual production of HALEU to 900km in 2024, and even higher in the future. The fuel will be used to power the initial cores of two demonstration reactors awarded under DOE’s Advanced Reactor Demonstration Programme.
The U.K. is also developing a HALEU production programme. The U.K. Department for Energy Security and Net Zero (DESNZ) recently announced plans to produce up to 24 GW of nuclear power by 2050. To achieve this feat, it will invest almost $12.7 million to develop the skills and site required to produce other advanced nuclear fuels in the country. The U.K. plans to use HALEU to power its next-generation reactors, which are expected to be up and running by the early 2030s. The DESNZ expects the funding to support the development of HALEU production capabilities in the northwest of England. It stated, "This builds on the UK's work to displace Russia from the global nuclear fuels market, particularly in uranium conversion services, where government and industry are together investing up to £26 million to bring this capability back to the UK by the end of the decade.”
As the U.S. and Europe look to shift their nuclear dependency away from Russia by developing alternative supply chains and developing their uranium production capabilities, we can expect to see a rise in the number of uranium-producing markets around the world. This will support ambitious nuclear power plans across Europe and North America, as well as develop a more competitive global nuclear energy landscape.
By Felicity Bradstock for Oilprice.com
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