The US Department of Energy (DoE) will sell off excess uranium over the next three years to help fund the cleanup of a former enrichment site but has determined this will not adversely affect uranium markets.
|The vast Portsmouth diffusion plant site (Image: DoE)
The DoE pledged in 2008 to manage stocks equivalent to 59,000 tonnes of natural uranium in such a way as to maintain a strong domestic nuclear industry. However, businesses were concerned by a July 2009 announcement that excess uranium could be sold to fund plans for an accelerated cleanup of the former Portsmouth uranium enrichment plant at Piketon, Ohio. Uranium miners worried that the amounts DoE could offload might not lie within the bounds of its 2008 plan.
The 2008 policy foresaw that 22,700 tonnes of the DoE's excess material would be placed on global markets before the end of FY2017, with no more than 10% of US annual requirements being released in any single year.
Now, energy secretary Stephen Chu has announced there would be no adverse impact on domestic uranium industries from a proposed transfer of 450 tonnes of uranium (tU) per quarter, starting this year. This determination was based on an Energy Resources International (ERI) analysis and takes into account other sales or transfers into the market of DoE uranium, including low enriched uranium from the downblending of weapons material under the DoE's National Nuclear Security Administration (NNSA). Including the NNSA's scheduled transfers, the DoE would be transferring approximately 2000 tU per year over the three years involved, 2011-2013.
The analysis prepared by ERI found that the proposed quarterly transactions of natural uranium hexafluoride (UF6), beginning in the first quarter of 2011 and continuing through to the end of 2013, are equivalent to 10% of US requirements for natural UF6 in that period. Once delivered to contractors, the speed at which the material actually enters the market and the manner in which it does so – through the spot market or through long-term-contracts – are no longer under the control of the department, although the analysis suggests that on average, in any single year, the total amount of material entering the market would not exceed the specified level of 10%.
The transfers could result in an average $4.45 per pound decrease in spot market prices over the three years to 2013 and a $1.24 reduction in long-term prices, ERI has found. This compares to current spot market prices of around $69 per pound quoted by UX Consulting and Tradetech. However, the uranium will be transferred as UF6, so could potentially trigger slight falls in conversion and enrichment prices, although the analysts note that in reality many market participants have already anticipated most of the impacts based upon statements released by the DoE in previous years.
ERI warns that "perceived uncertainty" over potential future DoE involvement in the commercial sphere might have a greater potential impact on the market than the likely effects on prices and the possible displacement of domestic uranium production that could arise from the proposed transfers.
The gaseous diffusion uranium enrichment plant at Portsmouth began operations in the 1950s, enriching uranium for military use, but from the 1960s it produced low enriched uranium for use in civil nuclear power stations alongside the Paducah plant in Kentucky. Enrichment ceased at Portsmouth in May 2001 and operations were consolidated at Paducah, which is still operating. In August 2010 the DoE awarded a $2.1 billion contract to a joint venture of Fluor Corporation and Babcock and Wilcox for decontamination and decommissioning of the vast Portsmouth site.
Researched and written
by World Nuclear News