The United States nuclear fuel supplier Centrus Energy Corp (NYSE American: LEU) shipped its first batch of high-assay low-enriched uranium (HALEU) to the U.S. Department of Energy (DOE), thereby completing the first phase of its contract with the government department initiated last year.
On Tuesday, Centrus announced completion of the delivery. The company started producing the enriched uranium at its American Centrifuge Plant in Piketon, Ohio last month and was required to make the initial shipment to the DOE by the end of 2023.
Centrus will now be required to provide the DOE with 900 kilograms of HALEU produced at the facility per year. The US$60 million cost of production and the first shipment was split between the company and the government department in the deal’s first phase. The DOE will be paying Centrus on a cost plus incentive fee basis during the second supply phase.
HALEU is uranium enriched to have a concentration of uranium-235 (U-235) ranging between 5-20 per cent of its mass. The U.S. Nuclear Regulatory Commission says uranium naturally contains about 0.7 per cent U-235 and normal reactor fuel has contained 3-5 per cent of the isotope historically.
Uranium-235 is the only naturally occurring fissile isotope. Fissile materials are used as fuel in nuclear reactors because of their ability to split neutrons in a self-sustaining nuclear chain reaction, thereby producing the energy needed to generate electricity.
“This critical milestone is essential to meeting the department’s near-term HALEU needs while laying the groundwork for the full restoration of America’s lost domestic uranium enrichment capacity,” said Daniel B. Poneman, CEO of Centrus Energy.
“We are committed to working with the department and industry to build a public-private partnership so that we can scale up production in the coming years to meet the full range of commercial and national security requirements for enriched uranium,” he added.
Centrus workers preparing to install one of the first centrifuge machines at the company’s facility. Photo via Centrus Energy
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The only Nuclear Regulatory Commission-licensed HALEU production facility in the U.S.
Centrus aims to expand its production capacity at the Ohio facility in the coming years. The company currently has 16 centrifuge machines used to enrich uranium and the quantity being supplied to the DOE in the second phase of the deal requires those machines to operate at full production capacity.
With the right amount of capital, Centrus could equip its facility with 120 machines and produce 6,000 kilograms annually. The company says the American Centrifuge Plant has the space for several more machines and that upgrading the facility would create hundreds of jobs in the state.
Centrus entered an MOU with the fission technology developer Oklo in August to support development of the Ohio facility and a fuel supply agreement with Korea Hydro & Nuclear Power (KHNP) and South Korea’s Ministry of Trade, Industry and Energy (MOTIE) at the end of April this year.
Poneman signs supply MOU with KHNP CEO Whang Joo-ho and MOTIE minister Lee Chang-yang at the end of April in Washington D.C. Photo via Centrus Energy
Terra Power also entered a memorandum of understanding with Centrus last year to secure a supply of enriched uranium for its Natrium nuclear reactors, expected to be operating in 2030. Natrium is a reactor technology design being developed by TerraPower and GE Hitachi Nuclear Energy in partnership with the DOE.
rowan@mugglehead.com
