Russian domination of uranium and possibilities of American sanctions against Rosatom

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 world’s enriched uranium market.

In May 2022, the head of Rosatom reported to Russian President Vladimir Putin that Russia had reached second place in uranium production in the world, confidently held first place in enrichment and conversion, and was regularly doing part of the top three in fuel fabrication.

Almost all major world powers buy enriched uranium from Russia, Lenta newspaper wrote 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.

Although it produces 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), behind Kazakhstan, the Australia, Namibia, Canada, Uzbekistan and Nigeria. The total volume of extracted raw materials was 2904 tons. According to these figures, Russia accounted for 5.96% of the world’s primary uranium indicator (47,731 tons).

The Russian holding company ARMZ (a Rosatom company) ranked ninth among the top uranium mining companies in 2020, with 2,846 tonnes (6% of global production). Kazakhstan’s Kazatomprom (22%), France’s Orano (9%) and Canada’s Uranium One (9%) ranked first to third in the rankings. At the same time, according to the media, Uranium One, which has uranium deposits in Kazakhstan, Namibia, Tanzania, Australia, Canada and the United States, is the subsidiary of Rosatom. Additionally, Kazatomprom is an unofficial joint venture with a Russian state corporation. Thus, if we add the shares of ARMZ, Uranium One and Kazatomprom, Russia already controls about 36% of world production.

According to Bloomberg, in 2020 Russia accounted for 16.5% of the uranium imported into the United States and 23% of the enriched uranium for American commercial nuclear reactors. The agency said Rosatom and its subsidiaries supply 35% of the world’s uranium enrichment.

Experts believe that Russia’s refusal to supply the United States with enriched uranium will lead to a shortage of American nuclear reactors. Nuclear power represents more than 20% of generating capacity in some parts of the United States, so electricity prices will exceed current inflation.

American partners in Europe also face a similar fate. Many reactors used in nuclear power plants in Europe and the United States were purchased from Moscow, and it is natural that Russia provides them with spare parts. They are installed in the Czech Republic, Hungary, Finland, Bulgaria, Romania and Slovakia. Slovak State Secretary for Energy Karol Galek stressed 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, “long mothballed” since 2013. This, however, requires state aid. To do this, the White House needs congressional approval. The Biden administration has urged lawmakers to back a plan to buy $4.3 billion worth of enriched uranium directly from domestic producers. Representatives from the US Department of Energy 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), the US nuclear industry has been trying to mislead the public and policy makers about it since the first calls for economic sanctions to stop the invasion Russian. After operation and maintenance (O&M, at 60%) and investment costs (25%), nuclear fuel represents the smallest share (16%) of nuclear production costs. The cost of mined uranium is only half of the total fuel cost (8%). Nuclear power plants buy fuel only every 18 to 24 months and only to replace a third of the reactor fuel. Fuel price increases affect only a third of total fuel costs. Even if uranium prices were to double due to the sanctions, nuclear power generation costs would increase by less than 3%. That’s less than the rate of inflation and the 200% increase that people pay for gasoline.

Furthermore, any short-term increase in uranium costs would most likely be temporary, with even less impact after the first year. In the United States, reactors recharge during two seasons when electricity demand is lowest: late winter to mid-spring and late summer to mid-fall. About a third of the reactors recharge in the first and about a quarter in the second. As a result, about a third of US reactors will have been refueled before the sanctions come into effect. In the fall, another quarter of them will fill up. Because uranium must be ordered months in advance, much of it has already been purchased.

The rest of the US industry has 12-24 months to find other suppliers, which should be relatively easy as there are plenty of idle and under-producing mining capacities around the world that could be scaled up fairly quickly. For example, Australian and Canadian mines have recently reduced production due to Russian dumping of uranium on the world market. Nuclear energy represents less than 20% of total electricity production in the United States. Whether electricity prices are determined by the volatile cost of fracking gas, a Russian uranium ban would have no significant impact on American consumers or the ability to keep the lights on.

So far, the NIRS argument hasn’t been bought off, but the US president has declared a state of emergency over a possible power generation capacity shortage. To solve the problem, the head of state exempted specific import duties on solar cells and modules from Vietnam, Cambodia, Thailand and Malaysia for two years.

The United States also needs enriched uranium for the production of nuclear weapons. The 1993 HEU-LEU (high-enriched uranium – low-enriched uranium) agreement, also known as the Gor-Chernomyrdin agreement, allowed the supply of nuclear fuel to the United States by diluting Soviet weapons-grade uranium by 90% of the isotope 235 at only 4-5%. As a result, after 30 years, the United States has entirely lost its uranium enrichment technologies. There are more than 15,000 abandoned uranium mines in the United States, and high-grade deposits were depleted decades ago by mining for the nuclear weapons program. Even if the United States buys the uranium enrichment technology, it will take a long time for the United States to produce the fuel.

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