Canadian, Australian miners cheer Trump’s uranium import decision

15th July 2019

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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US President Donald Trump’s decision to back away from implementing new trade restrictions on uranium imports into the US has won praise from Canadian and Australian producers, which argue that the uranium they supply is not a threat to US national security.

Trump has rejected the recommendation by the Commerce Department to require US power producers to source up to 25% of their uranium from domestic mines, and instead created a working group to review the country’s nuclear fuel supply chain.

Colorado-based Energy Fuels and Wyoming-based Ur-Energy have lobbied for quotas under Section 232 of the Trade Expansion Act, arguing that imports, particularly from State-owned companies in Russia, Kazakhstan and Uzbekistan, are a threat to national security.

Uranium mining major Cameco, from Canada, has welcomed the decision not to implement trade restrictions, the prospect of which has created much uncertainty in the global uranium industry.

Cameco stated at the weekend that the decision to establish a nuclear fuel working group, which would have 90 days to report back to Trump, would consider a wider range of options available to the US uranium mining industry, than merely looking at trade-related restrictions.

“As a long-term commercial producer, employer, supplier and investor in the US uranium and nuclear energy sectors, we want to see this industry succeed and grow,” said Cameco president and CEO Tim Gitzel, adding that the company would cooperate with the working group.

The US is Cameco’s largest customer by country, accounting for about 25% of its total sales by volume last year. In addition to being the largest uranium producer in Canada, Cameco was the largest uranium producer in the US for most of the past two decades.

The Minerals Council of Australia has also welcomed the decision on uranium imports, with CEO Tania Constable saying that the response to the investigation represented a balanced approach, which recognised the importance of suppliers like Australia.

EASING UNCERTAINTY
The Section 232 investigation, started in April last year, has created a period of substantial uncertainty in the uranium industry, compounding an already challenging global market.

Cameco stated that some uncertainty would remain until the efforts of the working group were complete, but said that it was overall a positive outcome for the global market.

Uranium fund Yellow Cake, which is listed on London's Aim, responded that activity in the market should pick up in the near term.

"The Section 232 investigation has created an 18-month period of uncertainty, which has severely restricted activity in the uranium market. We view the decision that no new trade restrictions will be implemented at this stage as positive, and likely to support a return to more normal levels of activity.

"We note the creation of a new working group which will look at the full nuclear fuel supply chain in the US and report back on its findings. We therefore expect a more measured return to market activity in the near term and remain highly confident in the long-term price outlook for uranium, and therefore in the Yellow Cake investment model," said CEO Andre Liebenberg in a statement.

US PRODUCER RESPONSE
Meanwhile, Energy Fuels and Ur-Energy said in a joint statement that the nuclear fuel working group was the “next phase” of the investigations into challenges that the US uranium mining industry faced, arguing that the Trump administration conceded that imports were a threat to US national security.

“The entire front end of the US nuclear fuel cycle is under siege. The American uranium mining industry will produce less than 1% of the uranium needed to fuel US nuclear power plants this year. The only domestic uranium conversion facility in the US shut down in 2017, and we lack any domestic uranium enrichment capability for national security applications.

“The industrial base to support US nuclear fuel production is rapidly disappearing. Reliance is shifting from allied to foreign nuclear fuel sources and technology in much the same manner as what has happened with rare-earth minerals. We need nuclear power, supported by a robust and reliable domestic uranium and nuclear fuel industry, to power our 21st Century economy and ensure our national security,” the companies said in a joint statement.

The Trump administration has identified uranium as critical to the nation’s security and economic prosperity. The US relies on imported uranium, with deliveries from State-owned companies in Russia, Kazakhstan and Uzbekistan having increased by 16% from 2017 to 2018, the statement noted, citing the US Energy Information Administration. These countries provided 44% of the uranium imported in the US last year.

Meanwhile, US mines produced 37% less uranium from 2017 to 2018, reaching a record low. Deliveries from Canada and Australia, allied nations whose production is also in steep decline owing to the flood of uranium from State-owned companies, declined by 25%.

Kazakhstan’s State-owned Kazatomprom CEO Galymzhan Pirmatov previously warned against imposing tariffs, arguing that such a move would force more US reactors to close.

Edited by Creamer Media Reporter

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