Washington — The US Department of Commerce and Russian-state owned nuclear company Rosatom have signed a proposal to extend an agreement limiting US imports of Russian uranium from 2021 to 2040 and reduce the amount of material that US utilities can buy from the current 20% of US reactors’ enrichment needs to about 17% on average over the 20-year period, Commerce said Sept. 14.

“This draft agreement represents an important step forward for the American nuclear industry,” said Secretary of Commerce Wilbur Ross in statement.. “If finalized, it will contribute to the restoration of America’s nuclear energy advantage and protect the domestic industry from dumped Russian uranium.”

The existing suspension agreement has limited Russian uranium imports to 20% of US reactor enrichment requirements since 2008 and was set to expire Dec. 31. The agreement was established in 1992, when it was signed by the US and Russia after Commerce suspended an anti-dumping investigation.

Under the draft amendment, reached Sept. 11, the amount of Russian enriched uranium that could be sold to US utilities would be no higher than 15% beginning in 2028, said Ross.

But the quota rises to 24% in 2021, decreases to 20% in 2022, increase again to 24% in 2023, then remains at 20% through 2027. The draft amendment then sets the quota at 15% beginning in 2028 through 2040. The higher limits between 2021 and 2027 are due to contracts signed by US utilities with Rosatom before February 2019, when Commerce began negotiations with Russia over a suspension agreement extension.

In addition to lowering the enrichment quota, for the first time since the agreement’s establishment, the draft amendment caps the amount of Russian enriched uranium product, not simply enrichment, that can be purchased by US utilities.

Reactor fuel is comprised of three components: uranium, the conversion services that transform it to uranium hexafluoride, or UF6, and enrichment services that allow UF6 to be enriched in U-235 sufficiently for user in a reactor. Enriched uranium is then fabricated into nuclear fuel assemblies.

Currently Russia can use its entire export quota for the sale of not only the enrichment component of LEU but also the uranium and conversion components of the LEU.

The proposed specific caps on enrichment plus conversion will be equivalent to roughly 7% of US demand and no higher than 5% starting in 2026.

Ad Hoc Utilities Group in support

Centrus, a company that brokers and trades enriched uranium purchased through multiple contracts, including with Russia and France, said Sept. 14 it “would be permitted to continue imports for the duration of our existing supply contract with our Russian supplier, allowing us to meet the needs of our U.S. [utility] customers.”

The contract with supplier Tenex, Rosatom’s enrichment marketing arm, ends in 2028, according to the Sept. 11 Commerce memo.

The Ad Hoc Utilities Group, an organization of nearly all US nuclear utilities, said in a Sept. 14 statement it will support the draft agreement.

It “provides a number of important provisions that allow the U.S. nuclear industry to continue providing affordable energy to consumers,” the group said. “These include contracting stability measures that reduce the risk of unexpected price increases, which would cause significant economic harm to ‘at-risk’ plants,” it said.

Uranium Producers of America President Ralph Knode said in a Sept. 11 statement the amendment recognizes “the severe threat to the domestic uranium industry posed by Russian uranium imports.”

UPA is a group that represents US uranium producers and converters on federal policy and regulatory issues.

“There remains an urgent need for immediate relief for the domestic uranium mining and conversion industries in the form of the Uranium Reserve proposed by the Department of Energy and the U.S. Nuclear Fuel Working Group,” Knode added.

The working group, established by President Donald Trump in July 2019 to provide recommendations to help the US uranium industry, issued an April 23 report calling for the establishment of a 10-year, $150 million uranium reserve and lower quotas for Russian enriched uranium under the suspension agreement.

*Original article online at https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/091420-proposed-deal-cuts-average-us-utility-quota-of-russian-uranium-to-17-from-20