US uranium producers call for level playing field

The USA's two main uranium producers yesterday filed a petition with the US Department of Commerce (DOC) seeking an investigation into the effects of uranium imports on US national security. Energy Fuels Inc and Ur-Energy are calling for a limit to imports that would reserve 25% of the US nuclear market for domestic uranium production.

White Mesa uranium mill (Image: US Nuclear Regulatory Commission/Energy Fuels)

The petition, filed under the Trade Expansion Act of 1962, describes how the loss of a viable US uranium mining industry would have a "significant detrimental impact" on the country's national, energy and economic security and its ability to sustain an independent nuclear fuel cycle.

Imports from Kazakhstan, Russia and Uzbekistan now fulfil nearly 40% of US demand, the companies said. Such imports of uranium and nuclear fuel - produced by enterprises that are state-owned and state-subsidised - have "in large part" been responsible for a decrease of domestic US uranium production to "near historic" lows in 2017. Production is likely to be even lower this year, they said.

Further pressure will be placed on US uranium producers from China, which has significantly grown its state-owned enterprises and announced its intention to enter the US nuclear fuel market in direct competition with US miners, the companies said. The expiry in 2020 of the US-Russia Antidumping Suspension Agreement - which limits US imports of uranium from Russia - will add further pressure.

A healthy uranium mining industry is vital to US national security both to supply fuel for nuclear power plants and to support national defence, the companies said. The DOC in 1989 launched a Section 232 investigation, at the request of the US Department of Energy, because of concerns that uranium imports exceeded 37.5% at that time. "The problem is far worse now," they said.

According to the 2017 edition of the US Energy Information Administration's annual uranium marketing report, 11% of the 50.6 million pounds U3O8 purchased by the owners and operators of US nuclear power plants in 2016 was of US origin. Uranium originating in Kazakhstan, Russia, and Uzbekistan accounted for 38%, with uranium of Australian and and Canadian origin accounting for 40%. The remaining 22% originated from Brazil, Bulgaria, China, the Czech Republic, Germany, Malawi, Namibia, Niger, South Africa, and Ukraine.

"Today's extreme dependence is not a matter of foreign competition legitimately underpricing domestic production. It is the result of certain foreign state-subsidy policies that undermine US companies who could otherwise compete fairly on a global basis," the companies said.

The remedies sought under the petition would set a quota to limit imports of uranium into the USA, effectively reserving 25% of the market for domestic production. It also suggests that federal utilities be required to buy US uranium in accordance with President Donald Trump's 'Buy American' policy. These remedies, the companies say, are expected to result in US utilities purchasing about 12 million pounds U3O8 per year from domestic production, creating a "healthy" US uranium mining industry, bolstering national defence and improving diversity of supply.

Production would come from existing US producers, other US producers that are currently on standby because of low uranium prices, and new producers.

"US uranium producers will continue to compete with global uranium producers, but on a more level playing field," the companies said.

The price of US uranium would be expected to increase through domestic competition to levels more consistent with unsubsidised global uranium production costs, but modelling has shown the average price impact to consumers will be negligible.

"There can be no certainty of the outcome of the investigation or the recommendation of the Secretary, and therefore the outcome of this process is uncertain.

Section 232 of the Trade Expansion Act of 1962 authorises the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the United States. Once the DOC initiates an investigation, the secretary has 270 days to prepare a report to the President, who then has 90 days to act on the secretary's recommendations.

Energy Fuels Inc and Ur-Energy are both based in Denver, Colorado. Energy Fuels' uranium production includes the country's only currently operating conventional uranium mill, White Mesa Mill in Utah, the Nichols Ranch in-situ leach facility in Wyoming, and the Alta Mesa ISL project in Texas, which is currently on care and maintenance due to low uranium prices. Ur-Energy operates the Lost Creek ISL facility in Wyoming.

Researched and writtenby World Nuclear News