Senate Votes to Approve Ban on Russian Uranium Fuel Imports: Impact on Market

The Uranium Industry Jolt: Senate Approves Ban on Russian Uranium Imports

• The ban on Russian uranium imports, supported by the White House, aims to reduce dependence on Russian sources and bolster domestic uranium production.
• Potential consequences include a 20% increase in enriched uranium prices, with implications for nuclear power plants and energy markets globally.
• The move has raised concerns about retaliation from Russia and the impact on uranium supply chains and prices in the coming years.

The US Senate voted late on Tuesday to approve legislation banning the import of enriched uranium from Russia – a move that is expected to catapult uranium prices to new highs.

The Prohibiting Russian Uranium Imports Act, approved by unanimous consent, will bar US imports from Russia 90 days after enactment, with temporary waivers allowed until January 2028. This legislation is a response to Russia providing almost a quarter of the enriched uranium used to fuel America’s fleet of commercial reactors, making it the top foreign supplier.

The United States Senate passed H.R. 1042, a bill to ban Russian uranium imports into the United States, by unanimous consent. The House bill was approved by voice vote in December amid growing congressional support to cut off Russia in the wake of its invasion of Ukraine. The US has banned imports of Russian oil and worked with Group of Seven allies to impose a price cap on seaborne exports of crude and petroleum products.

To be sure, there are loopholes: the legislation, which expires at the end of 2040, permits the Department of Energy to issue waivers authorizing the entire volume of Russian uranium imports allowed under export limits set in an anti-dumping agreement between the Department of Commerce and Russia through 2027.

Without those waivers, an approximate 20% jump is possible from the current enrichment spot price of $165 per separative work unit to a record high of as much as $200 per SWU(separative work unit), according to Jonathan Hinze, president of nuclear fuel market research firm UxC. Enriched uranium is measured in separative work units, or SWU, which account for the volume and enrichment density of the radioactive metal.

Senator Barrasso of Wyoming stated: “I have fought for years to end America’s reliance on Russian nuclear fuel. Our efforts have finally paid off with passage of our bill to ban these imports once and for all. Wyoming has the uranium to replace Russian imports, and we’re ready to use it. Our bipartisan legislation will help defund Russia’s war machine, revive American uranium production, and jumpstart investments in America’s nuclear fuel supply chain. This is a tremendous victory. I’m grateful to members of both parties for helping get this over the finish line.”

Senator Manchin of West Virginia agreed: “It is unconscionable for the United States of America, as the superpower of the world, to contribute to Vladimir Putin’s ability to finance his unlawful war against Ukraine through our reliance on Russia for the uranium we need to power our nuclear reactors. I am proud to have worked on this legislation with Ranking Member Barrasso to put an end to Russian uranium imports, which simultaneously unlocks $2.72 billion to ramp up domestic uranium fuel production. Building on initiatives I worked to include in the Energy Act of 2020, the Bipartisan Infrastructure Law, and the Inflation Reduction Act, this legislation is one more critical step toward reshoring our nuclear supply chains.”

The White House has called for a “long-term ban” on Russian imports, citing national security concerns and the need to reduce dependence on Russian sources of uranium. The ban is also expected to unlock $2.7 billion to establish a domestic uranium industry, as provided by Congress earlier this year.

The potential consequences of the import ban are significant. Enriched uranium prices could increase by about 20%, from the current spot price of $165 per separative work unit to as much as $200 per SWU. The Department of Energy has the authority to issue waivers for Russian uranium imports under certain circumstances until 2027, but without these waivers, prices could soar even higher.

While most US nuclear power plants have already secured enough uranium to operate for the next few years, the long-term effects of the ban remain uncertain. Negotiations for future fuel purchases take place regularly, and the impact on uranium stocks could be substantial.

The possibility of Russia implementing a unilateral export ban in response to the US import ban adds another layer of complexity to the situation. Russian state-owned uranium company Tenex has warned American customers of a potential preemptive export ban if the US restricts imports starting in 2028.

Executives in the uranium mioning and processing industry see this as a positive for the US uranium power industry. Amir Adnani, President and CEO of Uranium Energy Corporation observed: “We thank both chambers of Congress for passing this bipartisan bill that demonstrates the U.S. commitment to nuclear energy, the carbon free energy source that powers one in every five homes in America. Upon enactment, this will strengthen United States energy and national security, ending an untenable reliance on Russian uranium imports. This new law, in conjunction with the recently passed Nuclear Fuel Security Act, creates a firm foundation for long-term growth of the U.S. uranium industry to supply the fuel that powers American households, data centers, and industrial base with clean baseload power. As the fastest growing U.S. uranium company, we are delighted to have this exciting backdrop along with positive global uranium market fundamentals and advance the re-start of uranium production in Wyoming this August, followed by the resumption of our South Texas operations next year.”

The future of the uranium industry remains uncertain, but one thing is clear – the ban on Russian uranium imports is set to shake up the market and drive prices to new heights.