USA and Russia propose amending 'Suspension Agreement'
05 December 2007
The USA and Russia have tentatively agreed to allow limited imports of uranium from Russia, suspending an ongoing antidumping investigation. The move would allow Russia to directly supply US utilities with nuclear fuel.
The import of Russian low-enriched uranium (LEU) for use in commercial nuclear power reactors has been a contentious issue for years because of concern that Russia, with its large amounts of the material, would undercut the USA's domestic uranium supplier, Usec.
The US Department of Commerce (DoC) and Russia's Federal Atomic Energy Agency (Rosatom) initialled an amendment to the 1992 Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation (the 'Suspension Agreement') on 27 November. The amendment was published in the Federal Register on 4 December, beginning a 30-day comment period. The amendment is expected to be confirmed once the comment period has expired.
The proposed amendment will allow Russia to export uranium products to the USA in accordance with the export limits and other terms detailed in the amendment. The initialled amendment details export limits expressed in kgU as low-enriched uranium (LEU), at a product assay of 4.4% and a tails assay of 0.3%. Quantities would initially be small, increasing steadily from 16,559 kgU in 2011 to 41,398 kgU in 2013 when the 'Megatons to Megawatts' program is due to expire. Quantities will rise after 2013, increasing from 485,279 kgU in 2014 to 514,754 kgU in 2020. The amendment exempts Russian uranium imported for US initial cores (the first fuel loaded into a new reactor) from the annual export limits. Under the 'Megatons to Megawatts' program, ex-military enriched uranium from Russia is diluted to reactor grade, sold to Usec and used by US nuclear utilities.
These limits were derived from the reference data in the World Nuclear Association's (WNA's) publication Global Nuclear Fuel Market Supply and Demand, 2005-2030. The DoC will adjust these export limits in 2016 and 2019 to match the projected reactor demand for subsequent years in that publication or its successor.
The amendment will not come into force until both parties sign it and changes to the initialled version, based on reviews in the US and Russia, are possible. The Suspension Agreement will expire on 31 December 2020, upon which the DoC will terminate the antidumping investigation effective on that date.
At the beginning of October, the US Court of International Trade (CIT) ruled that uranium enrichment was a service and not a product. That decision meant that the DoC would be acting unlawfully if it did not re-examine its case for import duties on uranium enrichment carried out in Russia. Any revised case for trade barriers would not be allowed to rely on uranium enrichment. Currently, import duties are imposed on low-enriched uranium imported from Russia and the former Soviet states of Ukraine, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
Much of the enrichment that Usec currently sells is under the terms of the 'Megatons to Megawatts' program, i.e. it is blended down Russian highly-enriched uranium (HEU) and not enriched in the USA. However, with the agreement due to end in 2013, and the possible relaxation of current stringent limits on imports of Russian-enriched uranium into the USA, Usec will inevitably face increased competition from overseas. Usec said last month that US utilities' use of very cheap Russian enrichment capacity would be a "significant threat to the ability of the US enrichment industry to deploy new production capacity." Usec itself is currently working hard to do just that, as it constructs the Lead Cascade of its American Centrifuge facility, while others build new US enrichment capacity based on proven Urenco centrifuge technology.
Further information
USEC
US Department of Commerce
WNA's Military Warheads as a Source of Nuclear Fuel information paper
WNA's Uranium Markets information paper
WNA's US Nuclear Power Industry information paper
WNN: Suspension Agreement rationale to be revisedWNN: Australia-Russia bilateral open door for uranium tradeWNN: Usec begins testing American Centrifuge Lead Cascade