Bloomberg | Sep 07, 2019 08:09
(Bloomberg) -- The White House is considering a plan that would have the government directly purchase uranium from U.S. producers as it contemplates ways to revive the flagging domestic mining industry.
A group set up by President Donald Trump to study the issue is considering a request by the nuclear industry to use the Defense Production Act, a 68-year-old Cold War-era statute once invoked by President Harry Truman to help the steel industry. The plan calls for requiring the government to buy American uranium to replenish their stockpiles and for other purposes, Paul Goranson, chief operating officer for Energy Fuels Inc., said in an interview.
Energy Fuels and Ur-Energy Inc. unsuccessfully petitioned the White House to put quotas on foreign imports of uranium. The concept of direct government purchases of U.S. uranium was among ideas discussed during a roundtable with administration staff and the nuclear industry at the Old Executive Office Building earlier this week, Goranson said.
“They seem receptive to direct purchasing of material,” Goranson said. “The president intends to take bold action on this. It’s got his attention now.”
The White House didn’t immediately respond to a request for comment.
Shares in U.S. uranium producers rose on the report. Energy Fuels jumped as much as 11% while Ur-Energy climbed as much as 10%. Cameco Corp. increased about 2%.
Trump in July rejected the Commerce Department’s recommendation that he impose quotas on uranium imports using a trade law tied to national security concerns that he invoked to impose tariffs on steel, solar panels and hundreds of billions of dollars of Chinese goods. Instead, Trump said a fuller analysis was needed and he directed his administration to identify other options. He created a nuclear fuel working group comprised of six cabinet secretaries and several other top White House officials.
The Uranium Producers of America, which represents miners including Cameco, is requesting “federal actions facilitating domestic uranium production” of at least 7.5 million pounds per year by 2025 and 10 million pounds per year by 2030, according to a letter the Santa Fe, New Mexico, trade group sent to the working group last month. That includes millions of pounds via contracts with the Department of Defense, requirements that government-owned utilities buy domestic uranium, and the creation of a new “Federal Uranium Security Stockpile.”
“We may not be able to continue any operations without immediate relief from the impact of state-backed entities, which have distorted global prices and made it more difficult for free market mines in the U.S. to compete,” the group wrote in the letter, which included a request to direct payments to domestic uranium companies.
In a separate letter, the Nuclear Energy Institute, which represents nuclear reactor operators, also recommended the working group use the Defense Production Act to “accelerate the procurement” of domestic uranium as well as “incentivize” the annual purchase of domestic uranium through a tax credit for nuclear utilities.
In addition, the trade group urged expanding an Energy Department loan program to include domestic uranium projects and to ”modernize the Nuclear Regulatory Commission’s regulatory regime to be more safety focused, risk-informed, timely, consistent, cost-contained, and transparent.”
(Updates with more details starting in seventh paragraph.)
Written By: Bloomberg
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