Yekaterina Tripoten, analyst of Sovlink IC

– Russian-US relations on uranium have switched from political to commercial format

On May 26 2009, Techsnabexport OJSC (Tenex) and three companies of Fuelco LLC (the United States) signed three long-term contracts for the supply of enriched uranium. The contracts were signed at the central office of Rosatom State Nuclear Energy Corporation in the presence of Director General of the Corporation Sergey Kiriyenko. These contracts are the first since the adoption of an amendment to the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation in 2008. The contracts envisage direct supply of enriched uranium to the three US companies in 2014–2020. The uranium will be supplied from one of the four Russian plants having modern highly efficient centrifuges and based on the high scientific-technical potential of the Russian enrichment industry. The signing of the contracts is the result of the effective cooperation between the US companies and Tenex in the last few years.

It is good news but one could well expect it after the signing of a memorandum for lifting the anti-damping restrictions on the Russian uranium supplies to the US market. The lifting of the sanctions was the initiative of American power companies and this proves that Russian-US relations on uranium are switching from political to commercial format.

This contract, unlike the HEU-LEU agreement, stipulates commercial pricing and is, therefore, more profitable for the Russian party.

The contract stipulates the supply of exclusively enriched uranium. But in the future the parties may agree on the processing of American uranium in the territory of Russia. The point is that the uranium processing capacities of the United States are not very efficient. Such a decision would be a breakthrough for Russia as the United States is the biggest consumer of this market. This possibility is mentioned in the US-Russian inter-governmental agreement signed a year ago but dismissed by US Congress following the conflict in Georgia. Let’s hope that the forthcoming meeting of the US and Russian presidents will bring progress on this matter.  

Meanwhile, Techsnabexport says that after the termination of the HEU-LEU agreement it is planning to gain almost 20% of the market.