The US Department of Energy (DOE) has awarded NYSE-listed Uranium Energy Corporation (UEC) and TSX-V-listed enCore Energy Corporation with contracts to supply it with uranium concentrates under its new Uranium Reserve Programme.
The contracts represent the first uranium purchase by the US government in 40 years, enCore says, adding that it will help the government to establish a strategic uranium reserve.
The uranium reserve is intended to be a backup source of supply for domestic nuclear power plants, in the event of a significant market disruption, and provide support for restarting uranium production in the US.
In particular, enCore will supply 100 000 lb of natural uranium concentrates to the US government at a price of $70.50/lb, while UEC will supply 300 000 lb of uranium concentrates at $59.50/lb, during the first quarter of next year.
The $1.5-billion Uranium Reserve plan was launched in the 2021 financial year, and it managed by the National Nuclear Security Administration, which will continue to buy uranium directly from domestic mines and contract companies for uranium conversion services.
So far, the Uranium Reserve plan spans ten years, with the awards to enCore and UEC comprising an initial $75-million under the programme.
UEC president and CEO Amir Adnani says it looks forward to further expansion of the Uranium Reserve programme in coming years, especially since the US’ overdependence on uranium concentrate imports have create untenable energy and national security risks that need high-priority attention.
The US nuclear reactor fleet provides about 20% of America’s electricity production, and over half of its clean energy, and, up to now, imported nearly 60% of its current uranium requirements from Russia, Kazakhstan and Uzbekistan.
UEC chairperson and former US Energy Secretary Spencer Abraham comments that the Uranium Reserve is an important step to help rebuild America’s nuclear fuel capabilities, not only as a backup to mitigate potential supply disruptions, but also to revitalise US capacity to fuel the existing reactor fleet.
enCore Energy CEO Paul Goranson notes that the company is one of five selected uranium companies that have been approved to provide uranium to the Uranium Reserve. “As we have seen this year, global supply chains for nuclear fuel have been severely disrupted by the geopolitical events and the need for a domestic and secure supply chain for nuclear fuel is a stark reality,” he adds.
The company will use the proceeds from this contract to advance new production from its South Texas Rosita project in 2023.
enCore chairperson William Sheriff states that the US has become the world’s largest consumer of uranium over the past 40 years and welcomes the bipartisan efforts to reverse the US’ reliance on foreign sourced nuclear fuel.