US Nuclear Growth at Risk as Enrichment Supply Gap Looms

A looming shortage of uranium enrichment services could threaten US nuclear expansion plans, according to the leader of Centrus Energy (NYSE:LEU), one of the country’s largest suppliers of enriched uranium.

Amir Vexler, president and CEO of Centrus, is warning that rising demand from existing reactors, combined with a legislated ban on Russian uranium imports, risks creating a supply gap before new domestic capacity is ready.

“It is my strong belief that there is a gap between supply and demand for the existing market — just the operating reactors that we have now,” Vexler told the Financial Times, adding that efforts to restart shuttered plants and upgrade reactors to boost electricity output would further strain western suppliers.

Enriched uranium is produced by refining mined uranium, converting it into a gas and processing it to increase the concentration of a specific isotope used for nuclear fuel. The service is measured in separative work units, or SWU. Prices have surged 167 percent since Russia’s invasion of Ukraine in February 2022.

Currently, the global enrichment market is dominated by four major players: Russia’s Rosatom, China National Nuclear, France’s Orano and Urenco, a company jointly owned by the British and Dutch governments and German utilities RWE (ETR:RWE,OTCPL:RWNFF) and E.ON (ETR:EOAN,OTCPL:ENAKF).

In the US, only Centrus and Urenco are licensed to enrich uranium.

Centrus currently sources most of the enriched uranium it sells to US utilities from Russia, but this trade will be prohibited from January 1, 2028, under sanctions passed by Congress in 2024. The company is also building new enrichment capacity at its Ohio plant, but that facility is not due to come online until 2029.

According to World Nuclear Association data, the US has domestic enrichment capacity of 4.3 million SWU, compared with requirements of 15.6 million SWU. There are also currently no US-based commercial suppliers of the higher-enriched fuel needed for next-generation small modular reactors under development.

Last month, the Trump administration awarded US$900 million each to Centrus, Orano and new entrant General Matter to strengthen domestic enrichment services.

The government is also offering energy companies access to weapons-grade plutonium to convert into fuel in an effort to reduce reliance on Russia.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.