UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
_________________
Date of Report (Date of earliest event reported): September 12, 2020
Centrus Energy Corp.
(Exact name of registrant as specified in its charter)
Delaware | 1-14287 | 52-2107911 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
6901 Rockledge Drive, Suite 800
Bethesda, MD 20817
(301) 564-3200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Class A Common Stock, par value $0.10 per share | LEU | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
On September 12, 2020, the U.S. Department of Commerce (the “Department”) announced that the Department and the Russian State Atomic Energy Corporation (“ROSATOM”) initialed a proposed 20-year extension of the Russian Suspension Agreement (“RSA”). The RSA is a trade agreement between the United States and Russia that suspends an antidumping duty investigation of Russian uranium and allows for limited imports, subject to annual quotas. The RSA applies to imports by Centrus Energy Corp. (the “Company”) under its long-term supply agreement with TENEX. The proposed extension is subject to public comment until September 28, 2020, and the Department stated that it is seeking to sign the amendment no later than October 5, 2020. If signed, the extension of the RSA would provide stability and certainty regarding nuclear trade with Russia through 2040 unless earlier terminated.
Quotas provided in the proposed extension are expected to be adequate to support the Company’s long term strategic goals and to permit enriched uranium delivered during the remaining term of the Company’s contract with TENEX to be imported to supply U.S. utilities, thereby securing a key part of Centrus’ diverse supply base for the benefit of its customers and providing the revenues needed by Centrus to support its work on high-assay low-enriched uranium (HALEU) and other advanced technology projects in the United States. If signed, the extension is expected to avoid the risk of a restart of the Commerce Department’s suspended 1992 antidumping case, which could have led to the imposition of duties on Russian imports. There can be no assurance that the agreement to extend the RSA will be signed or that material changes will not be made to the agreement. For further information on the risks and uncertainties discussed in this and our other filings with the Securities and Exchange Commission, including under Part 1. Item1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, and our quarterly reports on Form 10-Q.
The Press Release issued by the Commerce Department on September 12, 2020, and the Company’s posting on its website furnished as Exhibits hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit | Description | |
99.1 | ||
99.2 | ||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Centrus Energy Corp. | ||||
Date: | September 14, 2020 | By: | /s/ Philip O. Strawbridge | |
Philip O. Strawbridge | ||||
Senior Vice President, Chief Financial Officer, | ||||
Chief Administrative Officer and Treasurer | ||||
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
U.S. Department of Commerce Announces Draft Amendment to the Suspension Agreement on Uranium from the Russian Federation
Saturday, September 12, 2020
Office of Public Affairs
(202) 482-4883
publicaffairs@doc.gov
Today, the U.S. Department of Commerce (Commerce) and the State Atomic Energy Corporation Rosatom (Rosatom), on behalf of the Government of the Russian Federation, initialed a draft amendment to the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation (Agreement), which was originally signed in 1992. This amendment, if finalized, will extend the Agreement to 2040 and reduce U.S. reliance on uranium from Russia during that time period.
“This draft agreement represents an important step forward for the American nuclear industry,” said Secretary of Commerce Wilbur Ross. “If finalized, it will contribute to the restoration of America’s nuclear energy advantage and protect the domestic industry from dumped Russian uranium.”
The draft amendment would:
• | Reduce U.S. imports of uranium from Russia. Under the current Agreement, Russian uranium exports are limited to approximately 20% of U.S. enrichment demand. Under the amended Agreement, this figure would drop to an average of approximately 17% over the next 20 years and would be no higher than 15% starting in 2028. |
• | Strengthen existing protections for the U.S. commercial enrichment industry. By extending and reducing the Agreement’s export limits, the draft amendment would enable the U.S. commercial enrichment industry to compete on fair terms. |
• | Establish unprecedented protections for U.S. uranium miners and the U.S. uranium converter. Under the current Agreement, Russia can use its entire export quota for the sale of not only the enrichment component of the low-enriched uranium (LEU), but also the natural uranium concentrates and conversion components of the LEU. By contrast, the amended Agreement would allow only a portion of the export quota to be used for the sale of the natural uranium components (concentrates and conversion) from Russia. On average, this portion will be equivalent to approximately 7% of U.S. enrichment demand, and no higher than 5% starting in 2026. |
• | Fix “returned feed” provisions in the existing Agreement that prejudice U.S. uranium miners. Under the current Agreement, foreign origin returned feed (i.e., natural uranium delivered by U.S. customers to the Russian exporter, in exchange for enriched uranium) can be delivered to the Russian exporter, enriched in Western Europe, and then exported to the United States outside the Agreement’s export limits. The amended Agreement would require foreign origin returned feed that is enriched in third countries to be subject to the Agreement’s export limits if exported back to the United States. |
• | Allow for the fulfillment of U.S. customers’ preexisting contracts for Russian uranium. There are U.S. companies that have contracts to purchase uranium from Russia before Commerce launched negotiations to extend the Agreement beyond 2020. The limits in the agreement are structured to enable the majority of these contracts to be fulfilled. |
Commerce is releasing the draft amendment for public comment. Comments will be due by 5:00 p.m. EDT on September 28, 2020. The draft amendment is available to registered users at https://access.trade.gov (reference case number A-821-802), and it will also be published in the Federal Register. Commerce is seeking to finalize an amendment to the Agreement no later than October 5, 2020, which would enable Commerce to avoid possible termination of the Agreement and resumption of the underlying suspended antidumping investigation of uranium from Russia.
Commerce’s Enforcement and Compliance unit in the International Trade Administration, which negotiated today’s amendment to the Agreement, is responsible for vigorously enforcing U.S. trade law and does so through an impartial, transparent process that abides by international rules and is based on factual evidence provided on the record.
EXHIBIT 99.2
Centrus Welcomes Proposed Agreement to Extend the Russian Suspension Agreement
The Russian Suspension Agreement is a trade agreement between the United States and Russia that suspends an antidumping duty investigation of Russian uranium and allows for limited imports, subject to an annual quota. On September 12, the U.S. Department of Commerce and Rosatom initialed a proposed extension of that agreement through 2040 that is expected to avoid the imposition of new duties on imports from Russia, which would have disrupted the U.S. nuclear fuel market.
The proposed agreement is expected to be good news for America’s nuclear industry. Once signed, it will remove uncertainty, promote domestic nuclear fuel production and preserve diversity of supply for U.S. utilities. The proposed agreement would protect existing supply contracts that U.S. companies - including Centrus - have signed in good faith. Under the agreement’s terms, Centrus would be permitted to continue imports for the duration of our existing supply contract with our Russian supplier, allowing us to meet the needs of our U.S. customers.
Centrus maintains a diverse base of supply, including our major supply contracts with Russian and French producers as well as other sources. The revenue generated from those sales supports the investments we are making alongside the US Department of Energy to deploy advanced centrifuge technology that can meet the long-term needs of U.S. utilities and national security. That includes the demonstration plant we are currently building in Ohio, which will be the first U.S. technology-based facility licensed to produce High-Assay, Low-Enriched Uranium (HALEU) to power the next generation of advanced reactors.
We applaud the dedicated efforts that the Department of Commerce and the other parties involved have put forth in working toward this new agreement.