US producers call for suspension of federal inventory transfers

26 April 2016

An organization representing US uranium producers has called on the Department of Energy (DOE) to cease transfers of excess uranium from federal inventory until the uranium market recovers from its current oversupplied state.

The Uranium Producers of America said in a statement that the sale by the DOE of inventory into a market that is oversupplied and with persistent low uranium prices has a negative impact on the uranium market and the domestic uranium industry.

The DOE sells more than 5 million pounds U3O8 (1923 tU) per year - more than double expected uranium production this year - the UPA said. Proceeds from the sale of federal inventory are used to fund the cleanup of legacy federal government nuclear facilities, such as the former Paducah and Portsmouth uranium enrichment plants.

"We can stomach the ups and downs of a commodity market, but it's harder to take when a great deal of the pressure we are facing comes from the federal government selling uranium in an already oversupplied market," UPA president Harry Anthony said. "While we recognize these cleanup projects are important, they should be funded in the regular appropriations process, and the Department of Energy should cease further uranium transfers until the market recovers."

The UPA's plea follows Cameco's recent announcement of its plans to scale back uranium production at operations in Canada and the USA in response to market conditions. The uranium producer is deferring the development of new wellfields at its in-situ leach operations at Crow Butte in Nebraska and Smith Ranch-Highland in Wyoming, with the loss of 85 jobs. The combined output of the two operations had made Cameco the largest uranium producer in the USA. The company now expects 2016 production from its US operations to be 1.1 million pounds U3O8 (423 tU), down from a previously expected 1.4 million pounds (539 tU).

The DOE's uranium inventory includes surplus highly enriched uranium, natural uranium and low-enriched uranium, but it is dominated by depleted uranium tails from historic uranium enrichment activities which can be re-enriched for use in nuclear fuel. The DOE's 2008 excess uranium inventory management plan undertakes to dispose of the material through sales or transfers of uranium based on a combined annual quantity of no more than 10% of annual US nuclear fuel requirements. According to the UPA, the country currently imports almost 95% of the uranium it needs to fuel its reactors.

The UPA said that, with Cameco's announcement following similar announcements from other domestic uranium producers, the USA's 2016 uranium production is likely to fall to the lowest levels seen in more than a decade.

The UPA was formed in 1985 to promote a "sustainable and strong domestic uranium mining and conversion industry by fostering free and fair competition while being environmentally sensitive to the communities in which we live and work". Its eight member companies are AUC, Cameco Resources, ConverDyn, Energy Fuels, Uranium Energy Corporation, Uranium One, Ur Energy and General Atomics' Rio Grande Resources.

Researched and written
by World Nuclear News