First contracts awarded for US strategic uranium reserve

The US Department of Energy (DOE) National Nuclear Security Administration earlier this year issued a solicitation to purchase up to an estimated 1 million pounds (385 tU) of domestically produced U3O8, through up to four awards of 100,000 to 500,000 pounds U3O8. The US Congress in 2020 allocated USD75 million to set up the reserve.

Strata has been contracted to supply 300,000 pounds U3O8, from US-origin material currently held in the company's accounts. The agreed pricing is above current reported spot and term pricing benchmarks, reflecting the scarcity of US origin materials in the uranium market, Peninsula said.

Peninsula recently made the decision to restart uranium production operations early next year at its Lance in-situ leach (ISL) project in Wyoming, where it previously produced uranium from 2015 until 2019. "This transaction with the DOE is highly supportive of our objective to become a long-term reliable uranium producer. We are also pleased to support the DOE's efforts aimed at revitalising the US nuclear fuel cycle," Managing Director and CEO Wayne Heili said.

Colorado-based Energy Fuels owns the White Mesa uranium mill in Utah - the USA's only currently operating conventional uranium mill - and the Nichols Ranch ISL project in Wyoming. The company's announcement did not disclose the size of its contract award but said it expected to realise total gross proceeds of USD18.5 million. It expects to complete the sale of the material - which is currently held in the company's inventory at the Metropolis Works Conversion Facility in Illinois - during the first quarter of 2023.

"Energy Fuels is pleased to contribute to US energy security by supplying US-origin uranium to the US uranium reserve," CEO Mark Chalmers said. US and European nuclear industries are actively working to shift away from Russian uranium supply, but this will be a "difficult and lengthy" process, he added. "For the past several years, US uranium production has been near-zero and our only uranium conversion facility has been shut-down. The Uranium Reserve is a small, but important, step toward resolving this untenable situation."

Energy Fuels also announced it has applied to join the HALEU Consortium which was recently launched by the DOE Office of Nuclear Energy to help create a secure domestic supply of high-assay low-enriched uranium - or HALEU - that will be used by many of the next generation of advanced nuclear reactor technologies. One developer of such reactors, TerraPower, earlier this week this week said it expected the operation of its Natrium demonstration reactor in Wyoming to be delayed by at least two years because of the lack of domestic capacity to manufacture HALEU fuel commercially.