Citing worries over uranium imports, Energy Fuels and Ur-Energy have asked the government to take steps to adjust the current climate.
On Tuesday (January 16), Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) and Ur-Energy (TSX:URE,NYSEAMERICAN:URG) raised concerns over US uranium imports, asking the government to intervene.
Energy Fuels and Ur-Energy, both of which produce uranium in the US, are major players in the space and supplied more than half of all US uranium in 2017.
The companies have have filed a petition under the Trade Expansion Act of 1962, requesting that the US Department of Commerce investigate the effects of uranium imports on national security; they have also asked that the president use his authority to adjust imports to ensure the long-term viability of the US uranium-mining industry.
In a joint press release, the miners explain that state-subsidized enterprises in Russia, Kazakhstan and Uzbekistan now fulfill nearly 40 percent of US uranium demand, while domestic production fulfills less than 5 percent. They also note that US uranium production fell to near-historic lows in 2017 due largely to uranium and nuclear fuel being imported from those state-subsidized foreign entities.
Looking forward, they expect 2018 domestic production to be even lower, and suggest that without a viable nuclear fuel cycle, the US’ commercial and nuclear capabilities will be diminished. If that happens, the nation could become wholly dependent on foreign parties. The companies believe a healthy uranium-mining industry is vital to US national security because uranium fuels nuclear power plants, which are a key component of the nation’s energy infrastructure and are imperative for US defense needs.
Facing this situation, Energy Fuels and Ur-Energy have come up with proposed remedies that will support a viable US uranium-mining industry with negligible impacts on US nuclear utilities.
In their petition, the companies seek remedies that will limit US uranium imports, effectively reserving 25 percent of the US nuclear market for US uranium production. Additionally, they suggest that US federal utilities and agencies buy US uranium in accordance with the president’s “buy American” policy. If enacted, they see US utilities purchasing approximately 12 million pounds of uranium per year from US producers.
The proposed solutions are aimed at creating a healthy US uranium-mining industry, as well as at bolstering national defense and improving supply diversification for US utilities and their customers. Greater diversification will lessen US exposure to the policies of nations like Russia, Kazakhstan and China. US utilities and their customers will also receive greater protection from supply shocks, price increases and other geopolitically motivated actions of foreign state-controlled uranium producers.
For its part, the US government appears to be open to the idea of creating more uranium production in the US. As of late November of last year, President Donald Trump had publicly announced that he was considering revising an Obama-era rule that banned new claims on uranium mining on about 1 million acres of public lands surrounding the Grand Canyon National Park.
Additionally, the Trump administration reaffirmed its commitment to clean energy during “Energy Week” in June of last year. US Energy Secretary Rick Perry told reporters, “[n]o clean energy portfolio is truly complete without nuclear power.”
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Energy Fuels is a client of the Investing News Network. This article is not paid-for content.