US demand for nuclear power prompts fuel drive
The United States and Canada are expanding nuclear fuel manufacturing capacity to power the growth in demand through more enrichment facilities, recycling, and increased uranium mining.
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The United States has the largest nuclear generation capacity in the world but in recent decades it has relied almost entirely on others to mine and enrich the uranium it needs to fuel its fleet.
The region’s exposure to an uncertain supply is exacerbated by an imminent need for the preferred fuel of next-generation nuclear reactors.
Production of high-assay low-enriched uranium (HALEU) requires uranium-235 enrichment of 5%-20%, compared to the up to 5% needed for most previous-generation reactors.
Increased global geopolitical uncertainty, especially in countries that have traditionally dominated the nuclear fuel space such as Russia and its allies, make the task of shifting uranium mining, conversion, and enriching back to North America a top, bipartisan priority.
“There is a really high sovereign risk around the current state of the world's mined uranium supply, and this is particularly relevant in the United States,” says CEO of uranium mining company NexGen Energy Leigh Curyer.
NexGen Energy is developing the Arrow Deposit in Saskatchewan Canada, the basis for the Rook I Project which will be the world’s largest single source uranium project. Once constructed and operational – the company is awaiting final federal approval – Rook I is expected to produce up to 30 million pounds (15,000 tons) of uranium a year.
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Current global annual uranium production is between 55,000 to 65,000 tons, according to the International Atomic Energy Agency (IAEA).
Provincial environmental assessment approval for Rook I was granted in November 2023, and full support has been given by the local Indigenous Nations, so Curyer believes the final inking of the deal by Ottawa, subject to completion of their review, is a case of “when” not “if”.
Demand surge
It will take three-and-a-half years to build the NexGen facility before production begins, followed by another near two years for enrichment and fuel fabrication for use inside a nuclear reactor, just in time for an expected demand surge as next generation nuclear projects move to deployment.
The first large, commercial advanced reactor projects, such as X-energy and TerraPower, in development under the U.S. Advanced Reactor Demonstration Program (ARDP), are expected to come online in the early thirties.
With artificial intelligence and data centers driving sharp rises in orders, NexGen’s Rook I Project will only supply a fraction of what’s needed.
“In the last three weeks, you've had Google, Amazon, and Microsoft, all commit to nuclear, and they are recognizing the merits scientifically, environmentally, and cost effectively, of nuclear power … (but) there’s a gap that requires the need for three or four Rook I-sized projects by 2030,” Curyer says.
Meeting that demand will be especially complicated for the United States, which imports around 90% of the uranium needed to fuel its nuclear fleet, as it weans itself off Russian supply.
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NexGen Production Profile
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Source: Arrow Deposit, Rook I Project, Technical Report on Feasibility Study
In October, the U.S. government announced a total of ten contracts with companies such as Westinghouse, BWXT, Framatome, GE Vernova, Urenco, Centrus, and Orano to provide enrichment services that will help establish a U.S. supply of HALEU and low-enriched uranium (LEU), build out the supply chain, and for deconversion services.
The 10-year contracts will each offer a minimum of $2 million, with up to $3.4 billion available from the Inflation Reduction Act (IRA).
Free from Russia
In 2022, the United States acquired 40.5 million pounds of uranium (equivalent), of which almost half (48%) came from Russia or Russian-influenced countries including Kazakhstan and Uzbekistan, according to the U.S. Energy Information Administration (EIA).
Russia is also the world’s largest enricher, with about 46% of global capacity while supplying some 40% of global conversion services, according to a 2023 U.S. House of Representatives report.
The United States enriches only 30% of its fuel needs and imports over a fifth of its enriched uranium needs from Russia.
In August, a U.S. ban on Russian enriched uranium imports came into law, with provisions for waivers in case of supply issues, unlocking some $2.7 billion in government subsidies to support domestic nuclear fuel capacity.
A full ban, without exceptions, is due in 2028.
In recognition of the pending nuclear fuel crunch, Canada, Japan, France, the United Kingdom, and the United States (the so-called Sapporo 5) resolved during the COP28 conference in December 2023 to establish a resilient global uranium supply market free from Russian influence.
New fuel
Almost all of the advanced nuclear reactors under development in North America will require more highly enriched fuel, including HALEU, and will be highly reliant on domestic production.
For HALEU production, government support is key.
Without today’s reactors using the fuel, there are no existing task orders, and without that demand signal, companies are reluctant to start producing the fuel.
“Absent government funding, investors and lenders might not want to help finance HALEU production until there are firm customer orders, and it’s also hard for a utility to buy a reactor with no fuel supply,” says Centrus Vice President of Corporate Communications Dan Leistikow.
“The solution to that problem is that DOE is supporting the deployment of the first reactors as well as initial HALEU production capacity. You create the chicken and the egg at the same time, so it becomes self-sustaining.”
French enricher Orano, which provides 12% of global uranium enrichment capacity, has already begun the expansion of its French facility Georges Besse 2 to generate over 30% more enriched uranium by 2028 in an effort to meet pending demand and by-pass Russia.
In the United States, the federal contracts have been necessary to create a market and establish a secure supply chain, according to Orano’s Senior Director of Communications Curtis Roberts.
“The lack of sufficient enrichment services is the primary concern for meeting the needs of the U.S. nuclear energy market,” says Roberts.
“Since we have not yet received the task orders, we cannot comment on the level of funding that may be provided by the DOE. However, we believe that our ability to co-locate the two technologies—the enrichment and deconversion of HALEU—can save time for the DOE to achieve the first HALEU production.”
By Paul Day