A looming shortage of uranium enrichment services could threaten plans to expand US nuclear power, according to the chief executive of Centrus Energy Corp (NYSE:LEU), one of the country’s largest suppliers of enriched uranium fuel.
Amir Vexler, chief executive of Centrus, warned that rising demand from existing reactors, combined with a legislated ban on Russian uranium imports, risks creating a supply gap before new domestic capacity is ready.
“It is my strong belief that there is a gap between supply and demand for the existing market — just the operating reactors that we have now,” Vexler told the Financial Times, adding that efforts to restart shuttered plants and upgrade reactors to boost electricity output would further strain western suppliers.
Enriched uranium is produced by refining mined uranium, converting it into a gas and processing it to increase the concentration of a specific isotope used for nuclear fuel.
The service is measured in separative work units, or SWU. Prices have surged 167 percent since Russia’s invasion of Ukraine in February 2022.
Currently, the global enrichment market is dominated by four major players: Russia’s Rosatom, China National Nuclear Corporation, France’s Orano, and Urenco, a company jointly owned by the British and Dutch governments and German utilities RWE and Eon.
In the US, only Centrus and Urenco are licensed to enrich uranium. Centrus currently sources most of the enriched uranium it sells to US utilities from Russia, but this trade will soon be prohibited from January 1, 2028 under sanctions passed by Congress in 2024.
The company is also building new enrichment capacity at its Ohio plant, but that facility is not due to come online until 2029.
According to World Nuclear Association data, the US has 4.3 million SWU of domestic enrichment capacity, compared with requirements of 15.6 million SWU. There are also currently no US-based commercial suppliers of the higher-enriched fuel needed for next-generation small modular reactors under development.
Last month, the Trump administration awarded US$900 million each to Centrus, Orano, and new entrant General Matter to strengthen domestic enrichment services.
The government is also offering energy companies access to weapons-grade plutonium to convert into fuel in an effort to reduce reliance on Russia.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
