US amending trade pact to reduce dependence on Russian uranium

This amendment, if finalised,   will extend the agreement to 2040 and reduce US reliance on uranium from Russia during that time period, the commerce department stated in a release.

Under the current agreement, Russian uranium exports are limited to approximately 20 per cent of US enrichment demand. Under the amended agreement, this figure would drop to an average of approximately 17 per cent over the next 20 years and would be no higher than 15 per cent starting in 2028.

The agreement suspending the antidumping investigation on uranium from the Russian Federation was originally signed in 1992.  

“This draft agreement represents an important step forward for the American nuclear industry,” said commerce secretary Wilbur Ross. “If finalised, it will contribute to the restoration of America’s nuclear energy advantage and protect the domestic industry from dumped Russian uranium.” 

The draft amendment would strengthen existing protections for the US commercial enrichment industry. By extending and reducing the agreement’s export limits, the draft amendment would enable the US commercial enrichment industry to compete on fair terms.

Under the current agreement, Russia can use its entire export quota for the sale of not only the enrichment component of the low-enriched uranium (LEU), but also the natural uranium concentrates and conversion components of the LEU. By contrast, the amended agreement would allow only a portion of the export quota to be used for the sale of the natural uranium components (concentrates and conversion) from Russia. On average, this portion will be equivalent to approximately 7 per cent of US enrichment demand, and no higher than 5 per cent starting in 2026. This, according to commerce department, would establish unprecedented protections for US uranium miners and the US uranium converter.

Under the current agreement, foreign origin returned feed (ie, natural uranium delivered by US customers to the Russian exporter, in exchange for enriched uranium) can be delivered to the Russian exporter, enriched in Western Europe, and then exported to the United States outside the agreement’s export limits, which is prejudicial to US uranium miners. The amended agreement would require foreign origin returned feed that is enriched in third countries to be subject to the agreement’s export limits if exported back to the United States. 

The amended agreement, however, would allow for the fulfilment of US customers’ pre-existing contracts for Russian uranium. There are US companies that have contracts to purchase uranium from Russia before the commerce department launched negotiations to extend the agreement beyond 2020. The limits in the agreement are structured to enable the majority of these contracts to be fulfilled.

Commerce department said it would be releasing the draft amendment for public comment by evening of 28 September 2020. The department is seeking to finalise an amendment to the agreement not later than 5 October 2020, which would enable it to avoid possible termination of the agreement and resumption of the underlying suspended antidumping investigation of uranium from Russia.