Feature: US nuclear plants, uranium miners prepare for possible US ban on Russian uranium

A bill in the US Congress to restrict imports of Russian uranium is stalled in the Senate, but uranium miners and nuclear power providers are already changing their buying habits, analysts told S&P Global Commodity Insights.

The US Prohibiting Russian Uranium Imports Act, which passed the House on Dec. 11, has bipartisan support, but it has been held by Senator Ted Cruz, a Texas Republican, over unrelated matters.

The law would appear to be a problem for US consumers of uranium, who sourced 3,142 metric tons of uranium products from Russia between the first quarter of 2018 and the third quarter of 2023, according to S&P Global Market Intelligence data. This made Russia the fourth-largest supplier of US uranium. The US imported 22,827 metric tons of uranium products from Canada, the country's largest supplier, over the same period.

The prospect of a ban, alongside other recent developments in the sector, has driven up the price of uranium, motivating US and Canadian producers to increase production.

"I think there's political desire to get it done... [and] it doesn't feel like there's a lot preventing it from getting passed and going forward, I think timing is just sort of uncertain right now," Jonathan Hinze, president at nuclear industry research company UxC, told S&P Global Commodity Insights. "From what I can see in the industry, most folks are preparing for that eventuality that that bill passes and that there is a formal legal cutoff of Russian supply in the US."

Shifting away from Russia

In March 2022, weeks after Russia invaded Ukraine, Senator John Barrasso, a Wyoming Republican, introduced a bill that would prohibit imports of select uranium products from Russia, followed by another bill the same month that would establish a strategic reserve of uranium. Both pieces of legislation stalled in committee, but in December the House unanimously passed a bill that would likewise curb imports of Russian uranium, this time with a clearer off-ramp for Russia-dependent nuclear power plants. The bill would ban the import of unirradiated, low-enriched uranium from Russia and establishes a waiver system through the end of 2027 for nuclear power plant operators without viable alternative sources of the fuel.

Cruz prevented the bill from being approved in the Senate by blocking unanimous consent. Barrasso and Cruz have been trying to clear a path forward for the legislation, Axios reported Jan. 10. Cruz's office did not respond to questions from Commodity Insights. Barrasso did not comment on developments in talks with Cruz to date when asked by Commodity Insights Jan. 23.

Democratic senators Joe Manchin or West Virginia and Martin Heinrich of New Mexico, as well as Republican senators Roger Marshall of Kansas and Cynthia Lummis of Wyoming, or their spokespeople, all confirmed to Commodity Insights that they support restrictions on imports of Russian uranium.

"Senator Manchin remains committed to seeing a ban on Russian uranium imports become law as soon as possible to help secure our supply chains and eliminate a source of funding for Putin's illegal war against Ukraine," a Manchin spokesperson said in an email.

The bill is not the first effort to cut down US use of Russian uranium. In October 2020, the US Commerce Department and Russian state nuclear company Rosatom agreed to extend export limits on Russian uranium through 2040. Their agreement under an anti-dumping investigation suspension, also establishes a phasedown schedule for imports of Russian uranium as a percentage of US enrichment demand, with a cap of 15% of such demand beginning in 2028 and carrying on through 2040. US nuclear power plants relied on Russia for 24% of their enrichment services in 2022, according to the US Energy Information Administration.

Industry stands ready

The industry is already shifting.

"It appears that nuclear plant operators are already pivoting to other suppliers," said Timothy Fox, managing director at research firm ClearView Energy Partners. "We do think that there was available but untapped capacity from other providers in the world that are friendly sources — Canada and Australia being two of the biggest examples."

The price of uranium has been rising in recent months, thanks in part to expected new demand as the world takes a second look at nuclear power as a carbon-free energy source. The price has become high enough that Canada-based uranium producer Cameco has already reopened an old mine and is considering further expansion.

French fuel cycle company Orano is already responding to the bill.

"Orano has an industrial project aimed at increasing its enrichment capacities by 30% in order to contribute to Western security of supply and reduce the dependence of certain states on Russia, subject to long-term commitments," a spokesperson for Orano said in an email.

Rival uranium enricher Urenco has announced capacity expansions at facilities in the US and Europe, also in response to growing demand for Western sources for enrichment services.

Phase-in plans

The industry could be in for a bumpy ride if the bill passes. The prospect of a ban helped boost the Platts-assessed spot price of uranium delivered to Canada to $106/lb on Jan. 22, up 66.1% from 2022's high of $63.80/lb and up 343.5% from 2020's low of $23.90/lb.

"Our excess supply is gone ... And what that means is it leaves the short-term market, I think, much more exposed to tactical or short-term impacts: things like short-term production interruptions or shortfalls [or] geopolitical impacts on short-term deliveries," David Doerksen, vice president for marketing at Cameco, said during a Dec. 19, 2023, investor day presentation. "For example, in the market, the conversation we're hearing about [the] US government banning Russian material in the US [will] have a very sharp impact on the thinly traded market."

The US Energy Department has said a ban on Russian uranium akin to the total restrictions proposed by Barrasso in March 2022 would require $1 billion or more in government spending to replace that fuel supply and related nuclear fuel services. The US Congressional Budget Office, meanwhile, said it expects passage of the ban recently passed by the House to increase the price of nuclear fuel by 13%.

The waiver written into Barrasso's bill could be a key shock absorber.

"There is some concern round how the waiver process will be implemented ... There's certainly some skepticism that that's actually going to be able to happen as simply as the Congress has written," Hinze said. "There's a reason those waivers exist, because you just don't have an immediate alternative to the Russian supply. So if the waivers are onerous and create either delivery delays or even cancellations or if there's other reasons why the Russian supply is no longer coming, at the moment, there's very few alternatives."

Susan Dlin contributed to this article.

S&P Global Commodity Insights reporter Camellia Moors produces content for distribution on S&P Capital IQ Pro. S&P Global Commodity Insights is a division of S&P Global Inc.