ConverDyn has received a $14 million award for uranium conversion services from the US Department of Energy under its $75 million program to create a domestic uranium reserve to boost energy security.
Shayela Hassan, deputy public affairs director for the National Nuclear Security Administration, the US Department of Energy agency leading program procurement activities, confirmed the award Jan. 5, stating that it was made before Dec. 31, the date Congress set for the appropriated funds to be spent.
Establishment of the reserve program was recommended by a Trump administration nuclear fuel working group tasked with a strategy to revitalize a US domestic fuel cycle that had been imperiled by low prices and demand for years. Uranium industry officials have said the market had become dominated by Russia and central Asian neighbors.
In the nuclear reactor fuel cycle, U3O8, a uranium oxide concentrate, is converted to uranium hexafluoride, or UF6, which is used as feedstock for enrichment plants, with the output used to fabricate nuclear reactor fuel.
ConverDyn is the marketing arm of conversion services from Honeywell International's Metropolis Works plant in Illinois, the sole such plant in the US.
"At this time we have no additional details to share," Hassan said.
The NNSA said in a June 30 notice its intent to award a sole source contract to ConverDyn to convert up to one million lb domestically-sourced U3O8 to UF6 and deliver it by book transfer to the DOE agency's Metropolis plant account. The anticipated period of performance is five years, according to the notice.
Canada's Cameco, also a provider of conversion services, said in its third-quarter earnings report that average spot conversion prices were $38/kgU as UF6 as of Sept. 30.
Honeywell did not reply to requests for comment.
This is likely the last contract the department will sign as part of the $75 million program established in the fiscal year 2021 omnibus appropriations bill to pay suppliers for uranium and uranium conversion.
Five US uranium producers, enCore Energy, Energy Fuels, Peninsula Energy, Uranium Energy Corp. and Ur-Energy announced in December contracts to supply over 800,000 lb U3O8 to the DOE under the program at prices ranging between $59.50/lb and $70.50/lb.
The companies are actively working to restart their mining operations, some in 2023, as prices and demand have risen partly due to US nuclear utility concerns over the availability of Russian uranium fuel supply in the wake of that country's Feb. 24 invasion of Ukraine. US uranium production fell in recent years to almost nothing as a result of a long period of low prices.
US utilities have signed multi-year supply contracts with those uranium producers over the past year to hedge against possible US government sanctions on Russian uranium, although no European or US sanctions apply to nuclear fuel components.
A US Senate committee held a hearing in December on a bipartisan bill that would add $150 million annually to the initial $75 million appropriation for the uranium reserve, but the bill did not receive a vote before the session ended.