U.S. Ban on Imports of Russian Uranium Opens Door to Domestic Production
On May 13, 2024, President Biden signed into law the Prohibiting Russian Uranium Imports Act ("the Act"), which bans imports of low-enriched uranium ("LEU") produced in Russia or by a Russian entity. The Act will go into effect 90 days after enactment.
The ban is already prompting industry to reevaluate supply arrangements for some domestic nuclear power plants. It also puts companies with long-term Russian supply contracts into a delicate position. They may be forced to look for ways to exit their contractual commitments, find alternative sources of LEU, or request a waiver. The Act allows waivers through 2027, but they must be issued by the U.S. Secretary of Energy and adhere to annual limits specified in the Act. To issue a waiver, the Secretary must determine that "no alternative source of low-enriched uranium is available to sustain the continued operation of a nuclear reactor or a United States nuclear energy company" or that importation of the uranium is "in the national interest."
In addition to furthering the goals of U.S. policy concerning exerting economic pressure on Russia, the ban also creates opportunities for the U.S. uranium mining and LEU production industry. The combination of the ban with government clean energy strategies and the $2.72 billion already allocated to build out the nuclear fuel supply chain in FY2024 reflect a bipartisan drive to mitigate geopolitical risks in the energy sector and diversify national procurement strategies.
Companies relying on uranium sourced from third parties should consider taking steps to prepare for the ban—either to locate new sources of supply, lock in current ones, or prepare a waiver request based on the statutory criteria. The U.S. Department of Energy ("DOE") estimates that U.S. companies have three years of LEU available, and there are currently limited U.S. producers of LEU. In preparation for the ban, the DOE published a contract opportunity to be issued in June 2024 seeking to buy LEU "from new domestic enrichment capacity to support the commercial availability of LEU for U.S. commercial nuclear energy companies." All LEU purchased by DOE must be enriched and stored in the continental United States.
