The American nuclear fuel supplier Centrus Energy Corp (NYSE American: LEU) will begin producing high-assay low-enriched uranium (HALEU) next month at a facility in Ohio, a significant milestone for the company.
Centrus announced that it would start the “first-of-a-kind” production on Wednesday, which it says is two months ahead of schedule. The company signed an agreement with the United States Department of Energy last year specifying that Centrus was required to begin producing HALEU by the end of this year.
“This will be the first new U.S.-owned uranium enrichment plant to begin production since 1954,” said the company’s President and CEO Daniel B. Poneman.
HALEU is uranium that has been enriched to have a concentration of uranium-235 (U-235) ranging between 5-20 per cent of the uranium mass. The U.S. Nuclear Regulatory Commission says uranium naturally contains about 0.7 per cent U-235 and standard reactor fuel has historically contained between 3 and 5 per cent of the isotope.
Uranium-235 is the only naturally occurring fissile isotope and fissile materials are used as fuel in nuclear reactors because of their ability to split neutrons in a self-sustaining nuclear chain reaction, according to the University of Calgary.
The company announced in June that it had successfully completed the U.S. Nuclear Regulatory Commission’s operational readiness reviews and received the organization’s approval to possess uranium at the facility in Piketon, a village in Ohio primarily known for the uranium enrichment plant.
Those approvals marked the final regulatory hurdles for Centrus and the company says it is now completing final system tests and other preparations this month before commencing production in October.
Starting next month, the company expects to produce approximately 900 kilograms of HALEU annually. Centrus says it is an advanced nuclear fuel needed for the majority of next-generation nuclear reactor designs currently being developed.
The company currently has 16 centrifuge machines, collectively known as a “cascade,” used for uranium enrichment at the plant but says it wants to secure enough funding for 120 of them, which would be capable of producing up to 6,000 kilograms annually.
Centrus also has a 440,000-square-foot uranium enrichment plant in Oak Ridge, Tennessee.
“This will be a key milestone, not only in providing a critical component of fuel for the next generation of reactors, but as the first step toward converting southern Ohio into a vibrant hub that will strengthen our nation’s nuclear supply chain and facilitate the accelerated deployment of the nuclear energy increasingly demanded domestically and abroad to meet global climate objectives,” said Senior Vice President for Field Operations at Centrus, Larry Cutlip.
At the end of last month, Centrus signed a memorandum of understanding with the fission technology developer Oklo to support the development of nuclear infrastructure in Piketon. Oklo will soon be publicly listed on the New York Stock Exchange through a business arrangement with the special purpose acquisition company AltC Acquisition Corp. (NYSE: ALCC) announced in July.
The price of uranium rose by 40.3 per cent during the first half of this year to US$56.23 per pound.
Centrus observed a significant drop in net income year-over-year at the end of June. The company generated US$12.7 million at the end of Q2, a 66 per cent drop from the US$37.4 million generated during the quarter in 2022.
Centrus shares dropped by 1.8 per cent Thursday to US$49.57 on the NYSE American stock exchange and have steadily risen by over 48 per cent since January 1.