TASS notes that half of the world’s uranium isotope separation facilities are located in Russia. They are redundant for Russia, so a significant part is export-oriented, including the United States. The newspaper writes that Moscow controls about 35% of the global enriched uranium market.
In May 2022, the head of Rosatom reported to the Russian President Vladimir Putin that Russia had reached second place in uranium production in the world, confidently holds first place in enrichment and conversion, and is steadily among the top three in fuel fabrication.
Almost all the world’s leading powers buy uranium enriched in Russia, wrote the newspaper Lenta in 2016. The publication noted that orders for Russian uranium come from companies in Europe, America, Africa and Asia and are signed ten years in advance.
Despite producing only 6% of the world’s uranium, Russia controls 46% of the world’s uranium processing market. According to the World Nuclear Association, Russia ranked seventh in terms of uranium production from mines in 2020 (the most recent data available on the association’s website), trailing Kazakhstan, Australia, Namibia, Canada, Uzbekistan, and Nigeria. The total volume of extracted raw materials was 2904 tonnes. According to these figures, Russia accounted for 5.96% of the global primary uranium indicator (47,731 tons).
The Russian holding ARMZ (a Rosatom company) ranked ninth among the top uranium mining companies in 2020, with 2846 tonnes (6% of global production). Kazakhstan’s Kazatomprom (22%), France’s Orano (9%), and Canada’s Uranium One (9%) ranked first through third in the rating. At the same time, according to the media, Uranium One, which owns uranium deposits in Kazakhstan, Namibia, Tanzania, Australia, Canada, and the United States, is Rosatom’s subsidiary. Furthermore, Kazatomprom is an unofficial joint venture with a Russian state corporation. Thus, if one adds up the shares of ARMZ, Uranium One, and Kazatomprom, Russia already controls approximately 36% of global production.
According to Bloomberg, in 2020, Russia accounted for 16.5% of uranium imported into the U.S. and 23% of enriched uranium for U.S. commercial nuclear reactors. The agency said that Rosatom and its subsidiaries provide 35% of the world’s uranium enrichment.
Experts believe that Russia’s refusal to supply the United States with enriched uranium will result in a shortage of American nuclear reactors. Nuclear energy accounts for more than 20% of generating capacity in some parts of the U.S., so electricity prices will rise above today’s inflation.
The U.S. partners in Europe, too, face a similar fate. Many reactors in use at nuclear power plants in Europe were purchased from Moscow, and it is only natural that Russia supplies spare parts for them. They are installed in the Czech Republic, Hungary, Finland, Bulgaria, Romania and Slovakia. Slovak Secretary of State for Energy Karol Galek pointed to 100% dependence on supplies from Russia. These reactors will be shut down if “Russian-Western” relations remain tense. The problems could be solved by restarting the conversion plant in the United States, which has been “long mothballed” since 2013. However, this requires state assistance. To do so, the White House needs congressional approval. The Biden administration has urged lawmakers to support a plan to buy $4.3 billion in enriched uranium directly from domestic producers. The U.S. Department of Energy representatives held a meeting with lawmakers, noting the “urgent need to allocate funds” from the budget.
Some argue that Rosatom should be sanctioned right away. Nuclear Information and Resource Service (NIRS, an NGO for a nuclear free world) writes on its website that the U.S. nuclear industry has been attempting to mislead the public and policymakers about this since the first calls for economic sanctions to stop Russia’s invasion. After operations and maintenance (O&M, at 60%) and capital costs (25%), nuclear fuel accounts for the smallest share (16%) of nuclear generation costs. The cost of mined uranium is only half the total fuel cost (8%). Nuclear power plants only purchase fuel every 18 to 24 months and only to replace one-third of the reactor’s fuel. Fuel price increases affect only one-third of total fuel costs. Even if uranium prices doubled due to the sanctions, nuclear power generation costs would rise by less than 3%. That is less than the inflation rate and the 200% increase people are paying for gasoline.
Furthermore, any near-term increases in uranium costs would most likely be temporary, with even less impact after the first year. Reactors in the United States refuel during two seasons when electricity demand is lowest: late winter to mid-spring and late summer to mid-fall. Approximately one-third of reactors refuel in the former and about one-quarter in the latter. As a result, roughly one-third of U.S. reactors will have been refuelled before the sanctions take effect. In the fall, another quarter of them will refuel. Because uranium must be ordered months in advance, much of it has already been purchased.
The rest of the U.S. industry has 12-24 months to find alternative suppliers, which should be relatively easy as there is a lot of idle and under-producing mining capacity around the world that could be ramped up fairly quickly. For example, Australian and Canadian mines have recently reduced output due to Russia’s uranium dumping on the global market. Nuclear power accounts for less than 20% of total electricity generation in the United States. That electricity prices are determined by the volatile cost of fracked gas, prohibiting Russian uranium would have no meaningful impact on American consumers or the ability to keep the lights on.
So far, the NIRS argument has not been bought, but the U.S. President has declared a state of emergency for the possible electricity generating capacity shortage. To solve the problem, the head of state exempted specific solar cells and modules from Vietnam, Cambodia, Thailand and Malaysia from import duties for two years.
The United States also needs enriched uranium for the production of nuclear weapons. The HEU-LEU Agreement (highly enriched uranium – low enriched uranium) in 1993, also called the Gor-Chernomyrdin agreement, enabled nuclear fuel supplies to the United States by diluting Soviet weapons-grade uranium from 90% of the isotope-235 to only 4-5%. As a result, after 30 years, the United States lost its uranium enrichment technologies entirely. There are over 15,000 abandoned uranium mines in the United States, and high-grade deposits were exhausted decades ago by mining for the nuclear weapons program. Even if the U.S. purchases the technology for Uranium enrichment, it will take a long time for the United States to produce the fuel.
