Hot U market and simmering interest in HALEU: It boils down to demand
For years, pressure has been building for a commercial path to a stable supply of high-assay low-enriched uranium (HALEU)—deemed essential for the deployment of advanced power reactors—but advanced reactor developers and enrichment companies are still watching and waiting. In contrast, the uranium spot price soared after Sprott Physical Uranium Trust, a Canadian investment fund formed in July, began buying up U3O8 supplies, causing the price to increase over 60 percent, topping $50 per pound for the first time since 2012. Fueled by growing acknowledgment that nuclear power is a necessary part of a clean energy future, uranium is the focus of attention from Wall Street to Capitol Hill.
Say hello to HALEU: Since HALEU started gaining attention about two years ago, there has been measurable progress on advanced reactors. Congress authorized and appropriated funds for the Advanced Reactor Demonstration Program (ARDP), the Department of Energy made 10 awards under the ARDP, and Oklo applied for a construction and operating license for its Aurora microreactor. Yet there is currently no commercial supply of HALEU in the United States, and no clear route to producing enough to deploy advanced reactors in the 2030 time frame.
HALEU, enriched to between 5 and 19.75 percent fissile uranium-235, occupies a middle ground between low-enriched uranium (enriched up to 5 percent U-235 and used in the U.S. power reactor fleet today) and high-enriched uranium (enriched above 20 percent U-235). HALEU can be fabricated into different fuel forms, including TRISO fuel particles and solid metallic fuel, and has the potential for improved reactor economics and fuel efficiency. Operating light water reactors could potentially transition to HALEU-based oxide fuels for extended operating cycles and improved plant economics.
Before advanced reactor developers boosted anticipation of future demand for HALEU, the need for the material was already increasing in other sectors. Medical isotope production once relied on high-enriched uranium, but the National Nuclear Security Administration now supplies U.S. medical isotope producers with HALEU. Research reactors around the world have been converted from HEU to HALEU, adding to increased demand. And NASA and the Department of Defense are developing HALEU-based systems to deliver lunar surface power and nuclear thermal propulsion.
Making HALEU: Unenriched uranium, including the more than 28 million pounds of U3O8 (market value $1.47 billion) that Sprott is holding at this writing on September 21, is only about 0.7 percent U-235. To get to HALEU levels above 5 percent U-235, one can either start low and go up (through enrichment) or start high and dilute (by downblending high-enriched uranium).
The only uranium enrichment company producing a commercial supply of HALEU anywhere in the world today is Russia’s Tenex. The fuel is available in the United States in limited quantities from the DOE through downblending of existing stockpiles of HEU and through reprocessing of HEU fuel from the EBR-II reactor.
Because HEU stocks are finite, the long-term solution is enrichment, but U.S. enrichers want to know that their investments in HALEU capacity will be met by a stable market for the product. HALEU enrichers would use conventional LEU—not natural uranium—as a starting point, so investing in HALEU production will mean continuing and expanding LEU production. But HALEU will require new infrastructure and licensing to meet the safety and safeguards requirements for Category II special nuclear material.
In May 2019, the DOE signed a three-year, $115-million contract with American Centrifuge Operating, a subsidiary of Centrus Energy, to develop a HALEU demonstration production line at the American Centrifuge Plant in Piketon, Ohio. The company committed to deploying a 16-machine AC-100M HALEU cascade and producing up to 600 kg of uranium enriched to 19.75 percent by June 2022. In June of this year, Centrus received a license from the Nuclear Regulatory Commission, making it the only U.S. facility licensed to enrich uranium up to 20 percent uranium-235. There is a hitch, however. The NRC license will expire at the end of the DOE contract unless a source of funding is secured and the license is amended.
While Centrus was awarded the contract in part because it uses enrichment technology that was developed in the United States and can potentially supply enriched uranium for defense needs, other enrichers are watching closely, including Urenco USA, in Eunice, N.M., which is working toward producing what it calls LEU+ (enriched up to 10 percent), and Global Laser Enrichment, of Wilmington, N.C., which is working to complete a full-scale demonstration of its SILEX uranium technology, developed in Australia.
Legislative process: Just who needs HALEU, when they need it, and how much they need are questions gaining attention in Congress.
The ARDP required applicants to establish a plan by which they would obtain the fuel/special nuclear material needed for their projects, and the Energy Act of 2020 required the DOE’s Office of Nuclear Energy to fund an established U.S. supply in anticipation of advanced nuclear reactor needs, and to protect medical isotope target production and other government programs that require HALEU.
More recently, an amendment to the $1 trillion Infrastructure Investment and Jobs Act (H.R. 3684) was proposed that would have required the Department of Energy to make HALEU available for advanced reactors. While that amendment was stripped from the final bill, HALEU funding could be added to the budget through the ongoing reconciliation process.
ANS backing: In a letter sent on September 14 on behalf of ANS to Sens. Joe Manchin (D., W.Va.), chair of the Senate Energy and Natural Resources Committee, and John Barrasso (R., Wyo.), the committee’s ranking member, ANS President Steven Nesbit and Executive Director/Chief Executive Officer Craig Piercy argued in favor of swift action to build a domestic supply of HALEU.
“Without a substantial domestic HALEU enrichment capability, we risk not having the fuel needed to power advanced nuclear energy as part of our clean energy future,” the letter states. ANS calls for an investment of $200 million annually over five years to downblend DOE material at levels sufficient to supply demonstrations of next-generation reactor designs. “To address enrichment,” the letter adds, “ANS recommends $1.5 billion total over 10 years to produce 20 tons annually, which is what our experts believe will be needed in that time frame.”
