If implemented, the draft amendment will give Russia measured access to the U.S. nuclear fuel market starting in 2011, and full access by 2021. It amends the 1992 Russian Suspension Agreement that suspended the U.S. government's antidumping investigation and currently limits uranium imports from Russia to material from dismantled nuclear warheads under the Megatons to Megawatts nonproliferation program, which is set to expire in 2013.
USEC believes that the amendment's terms have been calibrated so that America's existing nuclear fuel capacity and important projects to deploy new domestic fuel capacity, such as USEC's American Centrifuge Plant, will not be threatened by a sudden increase in Russian imports. The amendment will also help maintain a stable market for uranium products that is necessary for the completion of the Megatons to Megawatts program.
Under the terms of the amendment, Russia will be permitted to export low enriched uranium and other commercial uranium products to the United States in addition to the weapons-related material currently imported under the Megatons to Megawatts program. These sales would be subject to yearly quotas that limit Russian exports, other than under the Megatons to Megawatts program, to a small amount of U.S. nuclear fuel demand from 2011 to 2013 and then increase to approximately 20 percent of U.S. demand from 2014 through 2020. In addition to the quotas, the amendment immediately allows Russia to export unlimited amounts of uranium products to supply the initial fueling of new nuclear reactors once those reactors receive a construction and operating license.
However, USEC expressed concern in its comments that the amendment does not sufficiently ensure that the quotas will be honored because of recent court decisions that exclude certain uranium transactions from U.S. antidumping law. USEC remains concerned that the potential benefits of this amendment could be undermined by pending litigation before the U.S. Court of International Trade regarding the Russian Suspension Agreement.
In its comments, USEC asked the U.S. government to commit to using "all diplomatic, statutory and administrative measures at its disposal to ensure that the quotas are not exceeded." USEC urged the U.S. government not to fully implement the amendment until it has obtained adequate assurances from the Russian Federation that Russia will not export uranium products in excess of the quotas. USEC also asked the Department of Commerce to ensure that all sales made under the quotas or otherwise as part of the amendment be at market rates to prevent undercutting prices for U.S.-produced uranium products, as required under U.S. trade law.
USEC submitted its comments, which also contained a number of technical suggestions concerning the implementation of the amendment, in response to a request for public comment published in the Federal Register in December. The amendment will not take effect until it is signed by both the Russian and U.S. governments. A schedule for execution of the amendment has not been announced.
USEC continues to support efforts by the U.S. government to address the dumping of foreign-produced uranium imports. Kentucky's U.S. Sens. Jim Bunning and Mitch McConnell and U.S. Rep. Ed Whitfield recently introduced legislation clarifying that all nuclear fuel imports are subject to U.S. trade law. The U.S. Departments of Commerce, Defense and State as well as the National Nuclear Security Administration have expressed their support for the bills.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.
SOURCE: USEC Inc.
USEC Inc. Media: Elizabeth Stuckle, 301-564-3399 Investors: Steven Wingfield, 301-564-3354