US uranium producer Energy Fuels, and Strata Energy – a subsidiary of Australia-based Peninsula Energy – have been awarded contracts to sell natural uranium concentrates (U3O8) to the US government for the establishment of a strategic uranium reserve. Energy Fuels is contracted for $18.5 million U3O8 and Strata for $57 million.

The US Department of Energy’s (DOE’s) National Nuclear Security Administration (NNSA) in July kick started a process to initiate a US strategic uranium reserve, by issuing a solicitation to purchase up to an estimated one million pounds of domestically-produced U3O8. The Request for Proposal was for purchase of uranium from “a vendor that has produced uranium at a domestic uranium recovery facility at any time since 1 January 2009”. The uranium must be from inventory already in storage at the Honeywell Metropolis Works uranium conversion facility in Metropolis, Illinois, and must not have been "exchanged, swapped, or augmented with uranium imported from foreign countries and shall not have any peaceful-use or end-use restrictions”.

The government said it expected to make up to four individual awards of 100,000 to 500,000 pounds U3O8 for the total of 1 million pounds U3O8 (385 tU). The US Congress allocated funding establishment of the reserve in its 2020 budget for the, to address challenges to the production of domestic uranium and ensure a backup supply in the event of a significant market disruption. 

Strata has been contracted to supply 300,000 pounds U3O8, from US-origin material currently held in the company's accounts. Peninsula said the agreed pricing is above current reported spot and term pricing benchmarks, reflecting the scarcity of US origin materials in the uranium market. Peninsula said it will restart uranium production operations early next year at its Lance in-situ leach (ISL) project in Wyoming, where it produced uranium from 2015 until 2019. 

Energy Fuels did not disclose the size of its contract but said it expected to realise total gross proceeds of $18.5 million and expects to complete the sale of the material in the first quarter of 2023. The company owns the USA's only currently operating conventional uranium mill at White Mesa in Utah as well as the Nichols Ranch in-situ leaching project in Wyoming. 

However, the White Mesa mill is facing opposition from local communities and environmental groups. A report by The Grand Canyon Trust released in March said the mill is acting as an unregulated radioactive waste site. The mill opened in the 1980s and was supposed to only operate for 15 years, but it stayed open because of a shift in business. An official with the Utah Department of Environmental Quality said Energy Fuels had alerted the state of plans to import Monazite sand in order to extract rare earth elements and uranium from it. As the mill is recovering uranium from the ore, along with the rare earth metals, the Department said it is licensed to dispose of the final waste product in its tailing ponds.

Tribal members and environmentalists are calling for changes in its management. The report said radioactive waste from industrial and military facilities are sent and only a small amount of uranium is extracted. The Trust said over 700 million pounds of waste has been buried at the site. The report recommended that if the mill wants to function like a radioactive waste disposal business, it should be regulated like one. With the new contract, however, the focus may return to uranium production.

CEO Mark Chalmers noted that the US and European nuclear industries are working to move away from Russian uranium supply, but said this will be a "difficult and lengthy" process. "For the past several years, US uranium production has been near-zero and our only uranium conversion facility has been shut-down. The Uranium Reserve is a small, but important, step toward resolving this untenable situation."

Energy Fuels also announced it has applied to join the HALEU Consortium which was recently launched by the DOE Office of Nuclear Energy to help create a secure domestic supply of high-assay low-enriched uranium needed by next generation advanced nuclear reactor technologies. 

Image: The White Mesa uranium mill in Utah (courtesy of Energy Fuels)