Uranium [Prices] May Fall on Possible U.S. Disposal, Rio Says

Let's go over this one more time...there is no shortage of U, especially in the US. And according to this, if the US unloads its surplus (the opposite of shortage, you know) prices will drop world-wide. It gonna be one HUGE dump to have that effect! But that's the amount of surplus U the US has. Sooo...VUI, listen up: we don't need your uranium and you're not going to make much money from it anyway. Let's just leave it where it is.

By Anna Stablum and Edmond Lococo

Sept. 10 (Bloomberg) -- A U.S. government sale of uranium may drive prices lower over the next few years, said Clark Beyer, managing director of Rio Tinto Uranium Ltd.

A possible U.S. Department of Energy sale “is weighing on everybody’s mind,” Beyer said in an interview in London today. “If they are going to push a large volume into the spot market in the next year or two, then prices will go lower.” Rio Tinto Group is the world’s largest uranium producer.

The uranium market will have a surplus next year for the first time in at least three years as producers increase output faster than demand rises for the nuclear fuel, the London-based World Nuclear Association said in a report today. Secondary sources such as stockpiles will supply 18,711 metric tons in 2010 compared with 17,620 tons this year, the report showed.

“The Department of Energy has from time to time used uranium barter arrangements to fund cleanup work,” Jen Stutsman, a department spokeswoman, said today in an e-mail. “In order to avoid undue market disruption, DOE intends to stay within the 10 percent limit on domestic uranium sales or exchanges as laid out in the Department’s Uranium Management Plan.”

The sale or transfer of U.S. stockpiles to USEC Inc., the biggest domestic supplier of enriched uranium, may add 10 percent to U.S. fuel supplies in 2009 and next year, Max Layton, an analyst at Macquarie Bank Group Ltd. in London, said in an Aug. 10 report. The Department of Energy in July denied a loan guarantee to complete construction of the American Centrifuge plant in Ohio.

Sales Options

“The DOE has been talking about selling uranium and using it as payment for decommission services,” Beyer said, adding one possible plan would be to sell a fixed dollar amount of uranium every quarter. “It would be much better if the DOE appointed a marketing manager who could sell the material on a long-term basis.”

Uranium prices will fall 25 percent this year to an average of $48 a pound and slide as low as $40 by December, Layton said yesterday. The metal for immediate delivery was at $45 a pound as of Sept. 7, according to Roswell, Georgia-based Ux Consulting Co. Uranium rose to a record $136 in July 2007.

Projects in Africa and other “high-cost areas” may have “difficulties getting into production,” Beyer said. He declined to say a price needed to encourage new supply, saying it depended on each particular project.

To contact the reporters on this story: Anna Stablum in London at astablum@bloomberg.net; Edmond Lococo in Boston at elococo@bloomberg.net.

Last Updated: September 10, 2009 18:10 EDT

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Piketon Plant: Uranium Project May Go on Hold

Oh, great! This leaves USEC's gaseous diffusion plant in Paducah, KY still the only operational nuclear enrichment plant in the US.

Thursday, July 9, 2009 3:06 AM

By Jonathan Riskind

THE COLUMBUS DISPATCH

WASHINGTON -- The planned uranium-enrichment plant project in Piketon, Ohio, faces "demobilization" beginning in August unless the federal government grants a $2 billion loan guarantee, says USEC Inc.

USEC, the suburban Washington company trying to build the $3.5 billion advanced-technology plant on the same site where it ran the enrichment facility closed in 2001, has indicated for months that without the loan guarantee from the Department of Energy, the Piketon project would fail to get needed financing.

USEC has spent about $1.4 billion to build a test plant and begin work on the full-scale commercial facility, which would make fuel for nuclear power plants. The company says the enrichment plant could be operating by early 2011.

An Energy Department spokesman declined on Tuesday to discuss the status of the USEC request. However, Energy Secretary Steven Chu has made it a priority to speed up the loan guarantee process.

USEC made its application more than 10 months ago. Announcements are expected "fairly soon" for several projects, said Ebony Meeks, an Energy Department spokeswoman. But she could not say whether USEC would be the subject of one of those announcements.

Overall, the project employs 5,700 directly or indirectly; jobs range from construction of the plant in Piketon to work on the enrichment-facility components and supplies in eight states, the company says. In Piketon, more than 600 are working, and a fully operating plant would employ about 400 for years to come.

The enrichment facility is separate from the planned nuclear-power plant that a consortium of companies recently announced. The nuclear power plant could take a decade to go online even if it gains all the necessary approvals.

USEC said this week that it expects the Energy Department to make a decision by early August on whether to grant a "conditional commitment" for the loan guarantee. But if the decision is no, or there is no decision, a demobilization plan for significantly slowing down the project will be put into effect that would "involve the partial or full halt of certain American Centrifuge project activities and plant construction," the company said.

"Even if a conditional commitment is provided by early August, demobilization may be initiated if the terms of such conditional commitment are not acceptable or if subsequent progress toward achieving actual funding later this year under the loan guarantee is not maintained," the company said.

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