US antidumping case finally settled

18 May 2009

Usec and Areva have agreed to settle all pending appeals and administrative proceedings arising from an antidumping order imposed on imports of French low enriched uranium (LEU) by the US Department of Commerce (DoC) in 2002.
Under the terms of the settlement, the Usec and Areva will immediately withdraw or request dismissal of all pending appeals and DoC proceedings. This is expected to bring to an end all pending litigation and administrative proceedings regarding DoC's 2002 antidumping duty order, which is now expected to remain in place until at least the next five-year 'sunset review' in 2012.

  "It is now time to put
  seven years of litigation
  behind us and move

  Peter Saba, senior vice
  president, general counsel and
  secretary of Usec

Usec said that it expects to realize some $70 million (before taxes) from estimated duties deposited by Areva's Eurodif and Areva NC subsidiaries. The funds are expected to be received no earlier than the fourth quarter of 2009 from a US government program implementing federal legislation, commonly known as the Byrd Amendment. The Byrd Amendment was revoked in October 2007, but permits US producers to seek recoveries from duties collected on covered imports up to September 2007.
The settlement agreement also provides for Eurodif to purchase enrichment services from Usec in 2009 and 2010. Usec said that this purchase will help support its purchases of LEU downblended from Russian nuclear weapons material under the 'Megatons to Megawatts' program.
Peter Saba, senior vice president, general counsel and secretary of Usec, said, "It is now time to put seven years of litigation behind us and move forward." He added, "Today's action eliminates any further resource drain this case may have on both companies and is a positive step for both companies, their workers, their customers and their shareholders."
Francois-Xavier Rouxel, executive vice president of Areva's enrichment business, echoed this sentiment, saying that the agreement was "excellent for both companies and for our US customers."
Usec said that its original objective in asking the US government to conduct an antidumping investigation was to protect the US uranium enrichment industry, its workers and the communities in which they live from unfairly priced imports.
"Today's settlement resolves this complex litigation and gives Usec and the US market greater certainty about the future of the antidumping measures taken by the US government in this case," said Saba.
Until recently, the litigation was dominated by the question of whether French LEU sold under SWU contracts should be treated as sales of services outside the scope of the US antidumping law. In January of 2009, the US Supreme Court sided with the US government and Usec, ruling that DoC had reasonably concluded that such sales were sales of merchandise covered under the antidumping law.
Usec said that, had a settlement agreement not be reached, it anticipated at least three to five more years of significant litigation and uncertainty regarding the application of the antidumping order to imports of French LEU.
Usec is the only current supplier of commercial enrichment services in the USA, and is in the process of building the American Centrifuge Plant (ACP) at Piketon, Ohio. However, Usec's position as the only domestic uranium enricher is under threat, with European-led consortia also in the process of setting up enrichment plants in the USA. Louisiana Energy Services (LES), a subsidiary of Urenco, is in the process of constructing a new centrifuge plant at Eunice, New Mexico, while French nuclear company Areva has applied to build a centrifuge plant, the Eagle Rock Enrichment Facility, in Idaho, with a view to operation in 2014.