Russia is temporarily limiting exports of enriched uranium to the US, creating potential supply risks to utilities operating American reactors that generate almost a fifth of the nation’s electricity.
The Russian government didn’t provide details of the restrictions or their duration in a Friday statement on Telegram. Utilities tend to make purchases well in advance, so any impact is unlikely to be immediate.
As Russia’s prolonged war in Ukraine has made it increasingly unpopular on the world stage, the nation has repeatedly signaled a willingness to use its vast energy resources as geopolitical bargaining chips. Russia also told Austria on Friday it’s throttling gas supplies, interrupting a six-decade supply agreement currently covering 80% of demand because of a legal dispute.
The latest move targets a particularly vulnerable US link in the nuclear fuel cycle. Russia controls almost half the world’s capacity to separate the uranium isotopes needed in reactors, and last year supplied more than a quarter of the US’s enriched fuel.
While most deliveries have already been made this year, a ban could have implications from 2025, said Jonathan Hinze, president of UxC, which tracks uranium-fuel markets. That may leave some reactor operators without an alternative supplier.
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“There would be some utilities maybe that would be expecting that material and now might not get it,” he said.
Canada’s Cameco, one of the world’s biggest uranium miners, said the cumulative risks to the supply of nuclear fuel are significant.
“To break the dependence on Russia and other state-owned enterprises, coordinated western responses are required,” Cameco spokeswoman Veronica Baker said in a statement.
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Russia said the move was a response to a ban imposed by the US on imports of Russian enriched uranium. President Joe Biden signed the legislation in May, but it allows for shipments to continue until 2028 under a system of waivers. The exceptions underscore a simple fact about the industry — that the US has allowed its domestic enrichment capacity to languish.
“We don’t have enough enriched uranium here,” Chris Gadomski, head nuclear analyst for BloombergNEF, said in an interview. “They should have been stockpiling enriched uranium in anticipation of this happening.”
While the Biden administration has launched a multibillion-dollar effort to restart the nation’s domestic uranium enrichment capabilities, it is still in its nascent form. The US has just one commercial enrichment facility in New Mexico, which is owned by a British, Dutch and German consortium, Urenco.
Urenco’s US unit supplies about one-third of the enriched uranium used in American reactors, and is working to expand capacity 15% by 2027.
The company “recognises the critical need to ensure a reliable, secure and domestically supported supply of enriched uranium for the US nuclear energy industry, particularly as geopolitical tensions highlight the risks of reliance on unstable sources”, Rebecca Astles, Urenco’s head of communications, said by email.
Among the recipients of waivers to import Russian reactor fuel are Constellation Energy, the biggest US nuclear operator, and Centrus Energy, a nuclear fuel supplier. Other requests are pending.
Constellation Energy fell as much as 1.7% in New York on Friday. Centrus is the biggest US trader of Russian enriched uranium — its stock fell as much as 13%.
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In a statement, Centrus said the Russian decree wasn’t available to the company and it had not been able to verify or assess its implications.
“Should Tenex be unable to perform as expected under our supply agreement, Centrus has alternatives under consideration that could be used to mitigate a portion of the near-term impacts,” the company said, referring to Russia’s state-owned uranium supplier. “We expect Tenex to take the necessary actions to continue meeting its contractual obligations.”
Shares of other uranium or uranium-related companies rose, with Cameco climbing more than 6% at one point, while the US miner Ur-Energy surged as much as 10% and rival Uranium Energy jumped 13% before giving back most gains.
Chart: Bloomberg
