U.S. Department of Energy Excess Uranium Inventory Management Plan December 16, 2008

Office of Nuclear Energy

Excerpts:

On March 11, 2008, Secretary of Energy Samuel W. Bodman signed a policy statement [see Appendix A] on the management of the U.S. Department of Energy’s (DOE) excess uranium inventory (Policy Statement). This Policy Statement provides the framework within which DOE will make decisions concerning future use and disposition of this inventory…

DOE’s Office of Nuclear Energy (NE), Office of Environmental Management (EM) and National Nuclear Security Administration (NNSA) are the organizations within DOE responsible for these excess uranium inventories, and those organizations have coordinated in the development of this Excess Uranium Inventory Management Plan (Plan). The purpose of this Plan is to provide the general public and interested stakeholders more specific information and enhanced transparency with respect to DOE’s preliminary plans for its excess uranium transactions. This Plan identifies excess uranium inventories and identifies transactions that are planned or under consideration, or that may be considered by DOE in the future, for disposition of this excess uranium. The Plan also provides a strategy for the sale or other disposition of this excess uranium in a manner consistent with the principles set forth in the Policy Statement.

The objectives of the Plan are to seek to: (1) enhance the value and usefulness of DOE’s uranium by converting a portion of it into a low enriched uranium (LEU) inventory; (2) reduce DOE programmatic costs by decreasing uranium inventories; (3) meet key nonproliferation objectives; and (4) dispose of unmarketable material to facilitate the cleanup of DOE’s gaseous diffusion plants (GDPs). DOE also anticipates that it will undertake to optimize the use and disposition of its excess uranium assets in a manner that also minimizes any material adverse impacts on the domestic uranium mining, conversion and enrichment industries.

Depleted Uranium as UF6

… During the 50 years that the Federal Government controlled the U.S. uranium enrichment enterprise, DOE generated over 700,000 metric tons of depleted uranium hexafluoride (DUF6). The DUF6 is the result of feeding NU at 0.711 percent 235U into the enrichment plant to produce LEU or HEU. During the enrichment process depleted uranium is produced containing less than 0.711 percent 235U.

About 75,300 MT of DOE’s DU has an assay from 0.35 percent 235U to less than 0.711 percent 235U.3 This is equivalent to 25,950 MT of NU4. As the price of NU has increased, the value of the relatively higher assay DU makes it attractive for re-enrichment. The exact amounts and the economic attractiveness of the DUF6 depend on many variables, including assumed re-enrichment tails assay, the cost of re-enrichment, and the price of NU.

U.S.-Origin NU as UF6

DOE has an inventory of 5,156 MTU of U.S.-origin NU remaining from DOE’s former uranium enrichment activities. This entire quantity is committed under a moratorium, discussed below in regard to the Russian-origin NU, and is not available for sale before March 24, 2009.

Additional background information regarding DOE’s NU inventory, both U.S.-origin and Russian-origin, is provided in Appendix B.

Russian-Origin NU as UF6

In 1999, DOE and the Russian Federation entered into an agreement, the “Agreement between the U.S. DOE and the Ministry of the Russian Federation for Atomic Energy Concerning the Transfer of Source Material to the Russian Federation,” (hereafter “1999 Transfer Agreement”) that obligated DOE to purchase 11,000 MTU of NU as UF6 from Russia. The NU will remain under moratorium until after March 24, 2009. Prior to this date, the inventory can only be used to ensure the reliability of NU deliveries under the commercial arrangement referred to in the 1999 Transfer Agreement. This uranium meets commercial specification.

In addition, approximately 361 MTU of Russian-origin NU was received from the Tennessee Valley Authority (TVA) in 2007 under an exchange of U.S. and Russian-origin material. This NU is also subject to the moratorium and is not available for sale or transfer before March 24, 2009. Lastly, DOE has an inventory of approximately 1,079 MTU of Russian-origin NU acquired under the HEU Purchase Agreement with the Russian Federation entered into in 1993.

Off-Spec Non-UF6

DOE has about 4,461 MTU of off-spec non-UF6, uranium of which about 1,680 MTU is LEU and NU; the remaining material is comprised of DU. This uranium is in various forms and assays originating from past DOE programs in Hanford and Fernald and from university programs. This uranium requires considerable processing and, therefore, would not be readily available for use as commercial nuclear power reactor fuel.

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