Retaliation To US Ban On Russian Uranium Seems To Have Begun

Russia’s state-owned uranium supplier, Tenex, has issued a force majeure notice to its U.S. customers, giving them 60 days to secure waivers exempting them from a recently enacted U.S. law that bans imports of the company’s nuclear fuel. The notice, seen by Bloomberg, was sent to utilities including Constellation Energy Corp., Duke Energy Corp., and Dominion Energy Inc., according to an anonymous source familiar with the matter.

This notification follows the signing of a new law by US President Joe Biden, which prohibits the import of Russian enriched uranium. This law has created significant uncertainty for the U.S. nuclear power industry, which relies heavily on Russian uranium.

Russia supplies approximately 25% of the uranium used in U.S. reactors, making it the largest supplier of this crucial fuel.

Utilities can obtain waivers allowing the import of Russian enriched uranium until 2028 if the U.S. government determines that no alternative sources are available or if the imports are deemed to be in the national interest.

In its letter, Tenex indicated that utilities that choose to suspend production due to the new law would have their operations resumed once a waiver is granted. However, this would likely require renegotiation of the delivery schedule, potentially causing delays.

If utilities do not secure a waiver within the 60-day period, they risk losing their place in line for fuel shipments, which typically take three to four months to complete.

Constellation Energy declined to comment on the situation, while Duke Energy and Dominion Energy did not respond to requests for comment.

Tenex, owned by the Russian nuclear corporation Rosatom, has stated its intention to honor all its contractual commitments in the U.S. However, it also acknowledged that it has no control over potential actions by the Kremlin.

Analysts suggest that Russia might preemptively halt fuel shipments to the U.S. before the waiver period expires in 2028. Such a move could drive up the spot price of enrichment services by up to 20%, according to the nuclear fuel market research firm UxC.

Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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