Buyers of uranium hexafluoride (hex) believe there is ample supply of UF6 on the world market to meet demand, a situation which has an obvious impact on the price of conversion services. A number of factors have created this situation, including auction sales in 1997 of UF6 by the US Department of Energy (DOE) and by Northeast Utilities, with more likely in the future, the prospect of increasing supplies of low enriched uranium (LEU) in the form of UF6 derived from the down-blending of Russian highly enriched uranium (HEU), and the anticipated sale of substantial UF6 inventories by the United States Enrichment Corporation, now USEC Inc, following its privatisation in July 1998.

Demand for conversion services is likely to rise slowly over the next few years in the Far East, but not in the US, Europe, or the Newly Independent States (NIS) of the former Soviet Union. The capacities of the five North American, European, and Russian conversion plants, when combined with the Russian and US HEU-derived LEU as UF6 and with both government and commercial inventories of uranium and LEU as UF6, should provide an adequate supply of equivalent conversion services for the foreseeable future. In fact, as the HEU and the various stockpile supplies increase in the future, existing plant production may even be reduced by 15 to 20%. The HEU and the inventories have the potential to provide a world supply of approximately 16000 tU per year until 2010 – this is equivalent to approximately 27% of world requirements, a situation that is similar to that in the uranium market (see p12). However, while most of the government inventories of uranium are subject to trade constraints, the conversion services are not.

As long as the five major suppliers of conversion services continue to operate their plants without serious interruptions, and HEU and inventory supply remains available, a buyer’s market will prevail.


The conversion services spot and long term market volumes were approximately 3.5 million kgU (as UF6) and 15.5 million kgU, respectively, in 1997. These volumes were about the same as in 1996 but at approximately half and two-thirds the 1995 spot and long term market volumes. The spot market volume in the first half of 1998 is at an even lower rate. The market price, which had remained stable at $5.85/kgU as UF6 since early 1995, began a precipitous fall in June 1997, dropping to $4.00 by the end of July 1998, a 32% drop in little more than a year. The present market price compares with the $3.09 price of October 1992, just before the 9000 tU Sequoyah conversion plant was permanently shut-down. Since the difference between today’s price and the 1992 price is only about 12% in real dollars, the current market price could be close to bottom.

The outlook for the spot and long term conversion markets will depend on whether those who own large inventories enter the UF6 into the market in a carefully modulated manner or just sell for a quick cash return. Even so, the spot market will remain under downward pressure for several years. While prices in the long term market will be related to spot market price behaviour, they will also be driven to some degree by the need to supply uncovered demand which is substantial from about 2001 onward, particularly in the US and the Far East. The total of sustainable capacity and inventory drawdown is likely to be 8-10000 tU in excess of requirements through to 2010 (see table). This implies that primary production may turn out to be between 15 and 20% below sustainable capacity.


The commercial U3O8 to UF6 conversion services supply industry began in 1959 when Allied Chemical Corporation, now Allied-Signal Inc, started up a conversion services plant in Metropolis, Illinois, directly across the Ohio River from the US Atomic Energy Commission’s Portsmouth gaseous diffusion enrichment plant. This 12700 tU conversion plant is in operation today in support of the ConverDyn partnership of Allied-Signal and General Atomics.

In 1970, Eldorado Nuclear Limited, now Cameco Corporation, brought a commercial conversion services plant into operation at Port Hope, Ontario, Canada. In 1984, Eldorado brought a large UO3 refinery into production at Blind River, Ontario, about 400 miles west of Port Hope. Today, Cameco’s 18000 tU Blind River plant produces UO3 which is converted to UF6 at the 10500 tU Port Hope plant. The Port Hope facility also produces about 2400 t of UO2 from the Blind River UO3 annually for CANDU reactors.

In the United Kingdom, the first commercial conversion services plant went into operation in 1960 to produce uranium tetrafluoride (UF4) for the UK’s gas-cooled graphite-moderated natural uranium-fuelled Magnox reactors. While a plant to convert UF4 to UF6 was brought into operation at Springfields in 1968, this was shutdown in 1993 when British Nuclear Fuels (BNFL) replaced it with a new 6000 tU plant, its current production facilities.

In 1959, the French Commissariat a l’Energie Atomique started up a conversion plant to produce uranium metal at Malvesi in France. In 1961, Societe des Usines Chimique de Pierrelatte brought a UF6 conversion plant into operation. These two companies were merged into Comurhex in 1971 which is now owned by Cogema (100%). The Malvesi plant produces uranium metal and UF4 which is converted into UF6 at the 14000 tU Pierrelatte plant.

In Russia the military and civil nuclear fuel cycles have been highly integrated over the years. Because of this and the secrecy that is still maintained, information is sparse and uncertain. There are references to two large and one small conversion plants with a total capacity of 22000 tU per year. Plant locations are at Angarsk, Tomsk, and Ekaterinburg. While the Angarsk and Tomsk plants are reported to have routinely processed recycled uranium, it has been stated that they could be quickly purged (“cleaned”) if necessary.

There are also small conversion facilities operating in countries developing their own indigenous fuel cycle capabilities. Brazil has a 90 tU per year UF6 plant at São Paulo and has for some time had plans to bring a larger plant into operation. Argentina has a 150 tU per year UO2 conversion plant at Cordoba. India has a 250 tU per year UO2 plant at Hyderabad.

South Korea has a 200 tU per year UF6 to UO2 conversion plant at Taejon. South Africa had a small facility in operation at Pelindaba East, near Pretoria, which was shutdown in 1997. Its nominal capacity was reported as being 1200 tU per year, though its highest output, in 1996, was only 828 tU. Japan operated a 206 tU per year pilot plant between 1982 and 1987.