US to Ban Russian Uranium Imports

Author

Future Money
December 18, 2023

⚡ Five Second Summary:

Last week, the US House approved the Prohibiting Russian Uranium Imports Act - the goal is to ban Russian uranium imports 90 days after enactment with waivers through to January 2028. The bill will now head to the Senate.

📊 The Charts

🤔 What's Happening:

  • The US House of Representatives passed the “Prohibiting Russian Uranium Imports Act”, which seeks to ban Russian uranium imports with a temporary waiver option.

  • Russia supplied nearly 25% of enriched uranium for the US's commercial reactors in the past year.

  • Senators Manchin and Barrasso expect Senate approval, citing concerns about Putin using the nuclear industry to fund Ukraine invasion.

🔢 Numbers + Facts:

  • Russia is the largest foreign provider of the nuclear power fuel - responsible for ~24% of the US’s enriched uranium.

  • The US spends ~US$1 billion annually on Russian nuclear fuel.

  • The Biden administration supports the ban and aims for a domestic supply chain, requesting US$2.2 billion for uranium enrichment which is currently held up in the Senate.

🔮 Looking Ahead:

  • The bill faces Senate hurdles, including a hold by Senator Ted Cruz, possibly impacting its passage this year.

  • Prospects for passage of the Act could be more favorable in the following year.

  • A potential ban on Russian uranium imports may lead to increased nuclear fuel costs in the US, with estimates suggesting a 13% rise, and without waivers, prices could escalate further, causing supply disruptions and market volatility.

  • The uranium spot price is already at 15 year highs, with potentially more to come given the macro and geopolitical forces at play

📈 The Company: Global Uranium and Enrichment (ASX:GUE)

Market Cap: $19M | Share Price: $0.11 | Industry: Mining

GUE is a uranium explorer and developer with projects across four uranium districts in the USA & Canada.

GUE also has a cornerstone stake in a uranium enrichment technology company.

GUE's enrichment technology uses a chemical process which could make uranium enrichment more efficient, safer and cheaper than other enrichment technologies.

How does GUE fit into the story?

If the bill passes the senate then there will be a large shortfall for US enriched uranium.

If the US wants a leverage uranium supply chains locally to fill the gap, companies like GUE, which have access to uranium deposits and enrichment technology will become increasingly important. 

With the uranium spot price at ~US$82/lb, this could hurt the economics of nuclear power plants. To keep uranium affordable to power companies, new domestic sources of uranium will need to be mined. GUE has a total JORC resource base of 49.8Mlb and potentially significantly more at its projects in the US and Canada.

📰 Mainstream Media Coverage

The non-partisan Congressional Budget Office has estimated a ban on Russian uranium imports could increase nuclear fuel costs in the US by 13%… a record high $180 per SWU was “not out of the question.”

"The risks of continuing this dependence on Russia for our nuclear fuels are simply too great,"... "It's weakening America's nuclear fuel infrastructure, which has declined significantly because of reliance on these cheap fuels."