The Department of Energy awarded a subsidiary of Centrus Energy Corp., Bethesda, Md., a potentially 10-year, $1-billion contract to operate a new uranium enrichment cascade the company built at the agency’s Portsmouth site near Piketon, Ohio.
The competition was notionally open to all U.S.-controlled companies, but with two of the biggest uranium enrichment companies in the country owned by foreign entities, the deal was all but tailored for Centrus, which built the 16-machine cascade under a sole-source deal DOE awarded in 2019. A DOE spokesperson refused to say whether the company got bids from anyone but Centrus.
Though the Centrus-built cascade contains parts that were not produced domestically, building the machines has given the company the chance to bug shake a potential supply chain for a future, all-domestic centrifuge that could be used not only to produce high assay low enriched uranium (HALEU) for DOE research programs but for nuclear-weapons and Navy programs too.
The base period of Centrus’ new HALEU Demonstration Cascade Completion and HALEU Production contract runs through December 2023 and is worth about $150 million. A trio of three-year options would take the deal out to 2032. The first two of those options are worth about $295 million each while the last is worth a little more than $320 million.
In each year of the deal, Centrus would have to produce up to 900 kilograms of high assay low enriched uranium (HALEU) for DOE. That is a little under the theoretical maximum that the 16-machine cascade of AC100M machines can crank out, Centrus CEO Daniel Poneman, the former deputy secretary of energy, said in a quarterly earnings call with investors last week.
The first phase of the base of Centrus’ new contract called for the company and the government to split the roughly $30-million cost of completing the cascade. Centrus would then have to produce a 20-kilogram sample tranche of HALEU. Under the second phase of the base, Centrus would enrich as many as 900 kilograms of HALEU.
HALEU contains 19.75% uranium-235 by mass, just below the threshold of what is conventionally considered high enriched uranium. DOE wants to establish a means of producing HALEU domestically to aid with research and development of reactor designs that require that level of enrichment. Broadly, the effort is part of the Joe Biden’s administration to promote domestic sources of carbon-free electricity generation.
An all-domestic enrichment cascade, which Centrus’ 16-machine setup in Ohio is not, could also allow DOE to produce uranium for nuclear weapons and Navy warships. DOE’s National Nuclear Security administration says it needs a new all-domestic source of uranium, enriched by all-domestic machines, by the 2050s or so.
DOE once had plans that would have allowed the government to let Centrus complete and operate the 16-machine cascade in Ohio under the sole source contract awarded in 2019.
However, in December 2021, the government decided instead to cancel the option on the cascade construction contract that would have let Centrus produce HALEU and instead write a new contract that called for production of a much larger volume of the material.
Neither Orano USA, Bethesda, Md., nor Urenco USA, Eunice, N.M., bid for the contract, spokespersons for the U.S. arms of these foreign-owned enrichment corporations confirmed to the Exchange Monitor this week.
“Urenco USA is maintaining its focus on the preparatory work necessary to produce commercial quantities of higher assay enriched uranium at our facility in Eunice, New Mexico, the only operating commercial enrichment facility in the U.S.,” a spokesperson said.
“Orano continues its stated support for the developing U.S. advanced reactor market and for helping stand up a LEU+ and HALEU supply chain meeting the various needs for unique fuel types and enrichment, and closing the fuel cycle for these materials,” a spokesperson said.
DOE is contemplating a HALEU availability program, run by the Office of Nuclear Energy, that could result in a 25 metric-ton HALEU buy, if Congress approves all the necessary funding and once the DOE completes required environmental reviews.
Someone who attended a recent industry day about the HALEU availability told DOE that Orano, Urenco and Global Laser Enrichment, a Australian-Canadian joint venture with U.S. headquarters in Wilmington, N.C., look like look like locks for that work, given what the agency has so far revealed about its plans for the hoped-for buy.
