Putin statement on possible end to uranium exports ‘not a huge surprise’: Centrus CEO

Russian President Vladimir Putin's statement this week asking his government to consider restrictions on uranium exports “is not a huge surprise to anybody,” said Amir Vexler, CEO of enriched uranium company Centrus, in an interview Sept. 13.

That is because of a US law that took effect Aug. 11 banning imports of Russian enriched uranium beginning in 2028, Vexler told S&P Global Commodity Insights.

According to a Sept. 11 transcript on the Kremlin website, Putin asked Russian Prime Minister Alexey Mishustin to examine products that Russia delivers to foreign customers in large quantities and weigh imposing "certain restrictions" on their sales abroad in response to similar measures introduced by other countries against Russia.

Under the US legislation, companies with supply contracts with Tenex, the marketing arm of Russian-state owned nuclear company Rosatom, must seek waivers from the Department of Energy in order to take delivery of the Russian enriched uranium until 2028.

Centrus in July received a waiver, and has said it is seeking two additional waivers from DOE. Tenex, under a decades-long contract, has been a significant supplier of enriched uranium to Centrus, which then sells that material to its own customers.

“We have not heard anything from the people we talk to about the contract,” Vexler said, noting that if Russia was serious about ending uranium exports, “it would have happened a while ago,” as the ban legislation was proposed in the aftermath of that country’s 2022 invasion of Ukraine.

Still, he added, “I don’t know if this is a warning shot across the bow by Putin.” Nevertheless, Centrus has always prepared contingencies for supply sources, Vexler said.

Utilities want more diversity, competition

Such statements by Putin, as well as Russia's 2022 invasion of Ukraine, are why utility organizations have had “serious discussions” on diversifying their supplies, especially given the Russian ban, Vexler said.

Top nuclear reactor officials “want more competition in the market, more diversity,” he said.

Centrus and Korea Hydro & Nuclear Power announced Sept. 11 that they have entered into a contingent supply commitment to support construction of new uranium enrichment capacity at the Centrus enrichment plant in Ohio.

“The purchase commitment from KHNP covers a decade of deliveries of low-enriched uranium to help fuel Korea's large fleet of reactors,” the Sept. 11 announcement said.

Centrus said it “has now secured a total of $1.8 billion in contingent sales commitments to date, including KHNP and, as previously disclosed, other customers, to support deployment of new capacity.”

It continued, “These commitments, including KHNP's, are contingent upon the parties entering into definitive agreements and also upon Centrus securing the substantial public and private investment necessary to build the new capacity.”

That public investment could come through the Department of Energy’s June request for proposals to purchase up to $3.4 billion in low-enriched uranium produced at new domestic enrichment capacity. Proposals were due earlier in September. Two or more contracts of up to 10 years will be awarded. That new capacity is needed to fill enrichment capacity gap that will be created by the federal Russian ban starting in 2028.

But competition for federal funding is stiff, with Urenco USA and Orano, which announced Sept. 4 a project to build an enrichment plant in Tennessee, also vying for DOE money. Global Laser Enrichment, a joint venture of Cameco and Australia's Silex considering building an Ohio enrichment plant, has also said it planned to participate in the RFP.

Utility purchase commitments in works for months

Vexler said that purchase commitments from utilities like KHNP “have been in the works for several months. It is reasonable to expect we are not stopping with KHNP.”

He added, “It is not unreasonable to believe that a good part of the [$1.8 billion] in commitments is with US utilities."

Centrus can build “a decent-sized facility, an enrichment capacity expansion,” with $1.8 billion, Vexler said.

He added that due to its contract with DOE to produce high-assay low enriched uranium at its Ohio enrichment plant, Centrus has “demonstrated its ability to enrich uranium.” The company started producing HALEU for the department in late 2023 under a contract that runs until the end of the year. HALEU is uranium which is enriched to more than 5% but less than 20% U-235 and is proposed to be used by most advanced reactor developers.

“Subject to securing sufficient funding and purchase agreements, Centrus plans to scale up the plant with additional centrifuges for large-scale production of LEU for existing reactors as well as HALEU for the next generation of advanced reactors,” the company said in its Sept. 11 announcement.

The company will still need to obtain private capital to make a construction decision, even with utility commitments and a Department of Energy purchase order for LEU, Vexler said.

“Centrus is the only [enrichment] company that has a supply chain, workforce and manufacturing capability sourced entirely in the US,” Vexler said. The Ohio plant’s technology is also US-owned and US-developed, he said.