USEC proposals anger operators

30 June 2000

Opposition is mounting in the US to proposals by USEC, the uranium enricher, to increase the amount of Russian material it imports; at the same time it seems increasingly likely that the company will shut down one of its two US enrichment plants.

USEC has petitioned the US Department of Commerce for exclusive permission to import as much as 1MSWU a year from Russia, over two years - 15% of US annual demand. The company believes the deal would rescue it from financial troubles that will see its net profits dive from $120.6 million this fiscal year to $35 million in 2001.

Corbin McNeill, president of Peco Energy, warned that generators faced severe economic effects if the monopoly on imports was granted to USEC. “If non-weapons uranium is allowed into the US it will severely disturb the world market. The price of enriching uranium is one of our major costs and we would not want to go through a middle-man who just wants to gain margin,” he said.

If the new deal goes ahead, USEC will release the Russian uranium on to the market as part of a package deal. It would be sold only “if matched with material manufactured in our country by our employees,” USEC chairman William Timbers explained. “This matched material will be used to make high-cost US produced (uranium) more attractive to our customers and help us beat the aggressive foreign competition.” Legislators argue that this would turn USEC into a broker that may later serve all its customers with foreign uranium, signalling the demise of the US domestic industry.

Meanwhile, USEC has given strong indications that one of its enrichment plans will close. The company operates gaseous diffusion enrchment plants at Paducah, Kentucky and at Piketon, Ohio. Timbers told the US Treasury Department in a letter in mid-June that the board of directors expected to close one of the plants; a decision on which was expected as NEI went to press.

When the company was sold to private investors it was required to keep the plants open until 1 January 2005, but the parlous state of USEC’s finances may mean it meets special conditions allowing that requirement to be waived.



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