August 24, 2023 • 24 mins
About half of the enriched uranium that nations around the world use for nuclear power comes from Russia. It supplies almost a quarter of America’s 92 nuclear reactors and dozens of other plants across Europe and Asia. The US is now trying to change that with a big push to build up its own capabilities. Bloomberg’s Jonathan Tirone and Will Wade join this episode to talk about what it will take for the US and its allies to free themselves from Russian uranium.
Read more: The Manhattan Project to Wean the World Off Russian Uranium
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Stomic test. The Russians have a bomb, were supposed to
be years ahead of them, but thumps, What were you
guys doing in Los Almus.
Speaker 2 (00:15):
Uranium, of all things, has become a hot topic this summer,
in part, of course, because of the hit movie Oppenheimer
about the Manhattan Project and the man often called the
father of the atomic bomb.
Speaker 3 (00:27):
A shark. Time ago, an American aeroplane dropped one bomb
on Hiroshima and destroyed its usefulness to the enemy. That
bomb has more power than twenty thousand tons of T
and T.
Speaker 2 (00:43):
The bomb President Truman was talking about that devastated Hiroshima
on August sixth, nineteen forty five, contained about one hundred
and forty one pounds of enriched uranium. Uranium is still
used in nuclear weapons, but it's the non military uses
that we're talking about today and the reason it's in
the news now.
Speaker 4 (01:03):
Uranium is the basic fuel that's used in nuclear power plants.
It's not particularly rare, but the whole process of getting
the U two thirty five isotopes concentrated high enough to
run in a nuclear power plant very complicated.
Speaker 2 (01:18):
That's Bloomberg's Will Wade he and Jonathan Tyrone report that
for decades, the US has depended on Russia for much
of this hard to enrich uranium needed to fuel nuclear
power plants, and that picture has become much more complicated
since Russia's invasion of Ukraine.
Speaker 5 (01:37):
It's not just the enrichment that Russia is supplying, it's
also conversion, it's also raw uranium, and so you see
weak links along the nuclear fuel supply chain at every stage.
Speaker 2 (01:50):
Will and Jonathan are here to talk about a new
push to rebuild the West's uranium capabilities. Some are likening
it to a Manhattan Project two point zero, but this
time for peaceful purposes. I'm Weskosova today on the big take.
(02:12):
Can the US wean itself from Russian uranium? Jonathan? Why
is the US dependent on Russia of all places for uranium.
Speaker 5 (02:29):
Well, it goes back to the end of the Cold War,
and what happened was the US began a commercial relationship
with Russia's national energy company Rosa Tolment. It was called
Mega tons to megawatts, and basically we began importing Russian
weapons grade uranium down blended into a mixture that could
(02:50):
be made into fuel assemblies for American nuclear power plants.
And that commercial relationship, you know, has extended for the
last thirty year years. In that period of time, there
are also serious stresses to the nuclear industry, first and
foremost being the Fukushima Daishi nuclear power plants following the
earthquake in twenty eleven. Then also we had the fracking
(03:14):
boom in the United States with massive supply of natural
gas to American electricity generators, which also served to displace
participants in the nuclear fuel cycle.
Speaker 2 (03:25):
Will As Jonathan says, after the Cold War was over
in the US and the Soviet Union were no longer
competing in an arms race, it set up a whole
different dynamic when it came to what uranium was actually worth.
Speaker 4 (03:39):
Yeah, the whole US uranium industry is kind of almost gone.
There's very little mining. The closest big mining is in Canada.
There's almost no enrichment except for the plant in New Mexico,
which is actually a European company. There's not a whole
lot of conversion. There's one facility, but it was shut down.
They're about to reopen it. In just the past several years,
(04:01):
there have been about a dozen nuclear reactors have closed
down for economic reasons because they just couldn't compete with
the cheap natural gas electricity.
Speaker 5 (04:10):
So the last US owned commercial enrichment plant was in Paducah,
Kentucky that used a radically different technology to enrich uranium
called gaseous diffusion. The gaseous diffusion is a way of
enriching uranium that uses uranium hexafluorid gas pressed through different
membranes transferred through different chambers to enrich the uranium two
(04:34):
thirty five isotope into a concentration necessary to sustain a
fission chain reaction. The US is basically the last country
to use gaseous diffusion for enriching uranium, the reason being
it takes a lot more energy to enrich uranium through
gaseous diffusion, and why did the US do that Because
they were drawing massive electricity reserves off of the Tennessee
(04:56):
Valley Authority, and so this whole industry of the nuclear
fuel cycle in the US was wrapped up with national
defense policy is about stockpiling during the Cold War, and
the commercial enrichment services for nuclear power plants came from
the same plant, but there wasn't much of a cost
benefit analysis when it came to looking for the most
(05:16):
efficient way to make uranium for fuel for reactors until
after the Cold War ended and the commercial imperatives of
competing in the market were thrust upon the US, and
that's when they had to start developing what everybody else
in the world is using for enriching uranium, which is
the centrifuge. Centrifuges, which are supersonic spinning cylinders, is similar
(05:42):
to your washing machine. These actually use only about five
percent of the energy requirements that gashous diffusion requires. Centrifuges
became the technology of choice in the post Cold War era.
Speaker 2 (05:56):
So will how much uranium does the US get from Russia?
Speaker 4 (06:01):
Well, Russia is the world's biggest supplier of enriched uranium,
about a quarter of the fuel and our nuclear power
plants comes from Russia. The uranium supply chain is long
and complicated. You start with raw uranium ore. It's milled
down into a powder they call it yellow cake. The
yellow cake is mixed with a fluorine gas and it's
(06:21):
converted into uranium hexafluoride. That's the conversion step of the process.
The UF six gets sent to the enrichment site and
that's where they concentrate it into the five percent necessary
for fuel. And once you have the enriched uranium, and
remember that's what we get mostly from Russia, then enriched
uranium gets sent to a fabricator where they create nuclear
(06:42):
fuel rods out of it.
Speaker 2 (06:44):
And so this can pass through a lot of different
countries and a lot of different companies on the way
to being the final product.
Speaker 4 (06:53):
It can, but it doesn't have to. Russia has all
of the steps, China has all of the steps. It's
only the US in Europe that's really broken it down
into so many different places and people, and that kind
of makes the whole process a lot more complicated.
Speaker 2 (07:05):
Does any of the uranium that comes from Russia wind
up in US and nuclear weapons?
Speaker 1 (07:11):
No.
Speaker 5 (07:12):
The dirty secret is that there's not a lack of
nuclear fuel. It just that it's in the wrong place.
Like the US has a lot of nuclear fuel, it
just all in bombs. We could really screw up the
nuclear fuel market if we decide to disarm and start
to downblend. You can downblend the highly enriched uranium found
in nuclear weapons and reconvert that into a lower enriched
(07:32):
blend necessary for power plants.
Speaker 4 (07:36):
It's like you're unenriching it.
Speaker 2 (07:38):
And will you visited the only enricher of uranium in
the US. It's a company called Urinko. What was that like.
Speaker 4 (07:47):
Well, it's in a tiny town called Unice, New Mexico.
It's right on the eastern border of New Mexico. It's
a mile from Texas. It was this spotless, pristine industrial
site in the middle of the desert. There's armed guards,
a lot of security getting in. It's been open for
a long time, but it was spotless, just spotless that
(08:09):
all the machines were gleaming. I was really impressed by
how clean it is. So they take us into the
room with the centrifuges and there's just hundreds and hundreds
of them, all in a row. It just stretches on
to the end of this vast room. I couldn't even
see the end of it. They're spinning so fast. There's
this really high pitched wine. We had to wear ear
(08:30):
protection and it didn't sound that loud, but they told
us that the frequency is exactly the right frequency that'll
really damage your ears if you're not careful. So all
the centrifuges, they look like long, thin tubes about twenty
something feet tall. I couldn't tell for sure. The tops
of it were concealed by these curtains because that's where
they have the piping that connects one to the next,
(08:52):
to the next to the next. They call that a cascade,
and that is apparently a really important trade secret on
how they managed to get the gear to flow from
one to the next. They wouldn't let anybody see what
that looks like.
Speaker 2 (09:04):
And once the process there is done, what happens with
that uranium? Where does it go?
Speaker 4 (09:09):
Then it gets sent to the fabricator where it is
converted into fuel pellets. The pellets are inserted into fuel rods.
Every reactor has its own specific design for what those
fuel rods are supposed to look like, and those get
sent to the power plants after the break.
Speaker 2 (09:26):
What is the US doing to limit its reliance on
Russian uranium? So, Jonathan, we've been talking about how and
why the US is so dependent on Russia for uranium,
and now the US government seems to have woken up
(09:47):
to the fact that they need to change this. What
are they doing.
Speaker 5 (09:50):
They're working with their allies to address this as a
common security problem and not just a national security problem.
There's different levels of concern. It's not just the US,
it's also Eastern European allies, which, as former Soviet satellites,
are operating about two dozen so called Vveer reactors which
(10:11):
are almost exclusively fueled by Rosatum, Russia's national nuclear giant.
So I mean that's a very acute problem affecting European
power supplies. Then you move over to the North American
supply chains, the nuclear supply chains, and there we see
it's not just the enrichment that Russia is supplying, it's
(10:32):
also conversion, it's also raw uranium, and so you see
weak links along the nuclear fuel supply chain at every stage.
So when President Biden met his Canadian counterpart Justin Trudeau
earlier this year, they agreed to reboot North American nuclear
fuel cycle.
Speaker 1 (10:51):
Because of our shared prosperity is deeply connected to our
shared security in the past. In the past years have
proved the Canada the United Days are not insulated from
the challenge to impact the rest of the world.
Speaker 5 (11:05):
They subsequently went to the G seven meeting in Sapporo, Japan.
A couple weeks later in April, they convinced the UK
and France to come on board and the joint statement
from Sapporo, they said that they want to push Vladimir
Putin and Russia out of the nuclear fuel cycle entirely. Now,
that will be pretty hard, because you know, even during
the darkest times in the Cold War, the US, for example,
(11:26):
was buying titanium from the Soviets for their nuclear deterrence.
I think the important point to recognize is that it
won't be easy to knock Roseat to them out of
the nuclear fuel business. They continue supplying Eastern European utilities
with the fuel they need for their reactors, and that
business has in fact grown in the twelve months after
(11:49):
the war began and continues to this day.
Speaker 4 (11:53):
But you know what, we should point out that they
are starting to lose some of that business. Westinghouse, the
US nuclear company, just this year, has picked up a
couple contracts to supply fuel rods to those Eastern European reactors.
Then they're going to have to build a new design
fuel rod to fit those reactors.
Speaker 2 (12:11):
And will you also write in the story that the
Biden administration is pushing Congress to spend a lot of
money to try to jumpstart the US uranium process. Again,
there's a push in Congress right now. To create a
domestic stockpile of nuclear fuel, it'd be kind of like
the Strategic Petroleum Reserve, which is exactly what it sounds like.
(12:33):
It's a huge amount of oil that stored and they
release that oil to adjust pricing when necessary. And so
the US wants to have a stockpile of nuclear fuel
just as a buffer against any kind of international tensions.
You said earlier that Russia has their entire uranium fuel
cycle in their own country. They do it from beginning
(12:54):
to end, and the US doesn't. What will it actually
take for the US to get that capability.
Speaker 4 (13:01):
It would take long term commitments from customers. Especially remember
talking to the head of Converdine, that's the company that
does conversion, the process of turning the yellow cake into
UF six. He said that they'd be happy to do it.
It's not that complicated, but it's not that cheap. He'd
need long term commitments, like long term means about ten
(13:21):
years from about ten customers to justify really going into
the expansion in a way that would be big enough
to displace the Russians.
Speaker 2 (13:30):
To have that many customers will would that mean that
the US would have to really ramp up its nuclear energy.
Speaker 4 (13:38):
It would mean that the utilities that operate nuclear power
plants now would need to start signing contracts to buy
all of their fuel from US suppliers instead of international suppliers.
And in fact, the people at Urenko in New Mexico
told me that since Russia invaded Ukraine, their orders have
gone up about twenty five percent because they're American utility.
(13:59):
Customers have come to them and said, we'd like to
start buying more from the United States than from Russia.
Speaker 5 (14:05):
And there's another dimension as well, which is more future oriented,
and it involves the next generation of American reactors. Foreseeing,
these are the so called small modular reactors, which require
a different kind of nuclear fuel, a higher concentration. It's
called high assay low enriched uranium. Rather than five percent
(14:25):
uranium two thirty five bus topes, you're looking closer to
nineteen nineteen point seventy five percent. And the reason is
that if you're deploying more nuclear reactors that are smaller,
you want to have to refuel them less often. And
so the higher grade, the higher concentration nuclear fuel, allows
them to burn longer without being refueled. And right now,
(14:48):
the US is one hundred percent dependent on Russia for
high assay low enriched uranium, and this is a key
bottleneck that has to be solved right now, because if
we want to be deploying SMR reactors at the end
of this decade, then that part of the supply chain
has to be solved now. Because these are all long
(15:09):
engineering processes. Factories have to be built, lines have to
be built, environmental regulations, safety regulations. It takes a long process.
So if we want to get it done by twenty thirty,
it has to start now.
Speaker 2 (15:22):
And you write that some plants that had closed down
are now being reopened.
Speaker 4 (15:28):
Well, the converdyine conversion facility in Illinois that was shut
down if several years ago for economic reasons because the
market was so oversupplied. They basically said, we can't make
money selling this stuff. We're just going to sell out
of inventory until further notice. And now they're starting to
reopen that because the price has gone up about tenfold.
Speaker 2 (15:47):
When we come back, what would it take for the
West to cut Russia out of the international nuclear fuel cycle.
Speaker 4 (16:02):
Nazier's new military rulers are in a standoff with the West,
and some of their neighbors, refusing to hand back power
to the man they oustd it. Nizer's coup leaders have
closed the country's airspace until further notice.
Speaker 5 (16:14):
The regional bloc ECOWAS has said it wants a diplomatic
and peaceful resolution to the takeover, but that no options
are off the table.
Speaker 2 (16:23):
Jonathan, you write that the recent coup in Niger, which
is one of the top uranium producers in the world,
shows the geopolitical stakes of this business. What should other
countries take away from what's happening there.
Speaker 5 (16:37):
So, Nizier's the sixth biggest producer of uranium or in
the world. It's a key supplier for France and other
European utilities. The lesson of Niger is what the companies
call depth and defense. They need to have a redundant
supply chain and so you will see or no investing
(16:58):
in Canadian minds. You see additional Canadian minds responding to
tightness in the ore market by opening up mothballed minds.
Just another example. Everybody is talking about Niger right now,
but you see Rosatom displacing US and European fuel makers
and entering into a new agreement with South Africa to
(17:19):
reboot that country's nuclear fuel cycle. So the thing to
pay attention to isn't just income statement the balance sheet,
it's also the geopolitical states that are shifting as Western
companies try to displace Russia and vice versa.
Speaker 4 (17:36):
I think the lesson from Niger is the same lesson
from Russia, which is you don't want to be dependent
on countries that may not be stable as your supplier.
And also we saw in South Africa, uranium isn't just
a product you buy and sell to make a profit.
It's a key part of international diplomacy.
Speaker 2 (17:56):
That's really interesting point. Will and you write then that
the US government is grappling with this very question.
Speaker 5 (18:04):
The US Department of Energy has what is called the
one two to three Agreement, which is a nuclear agreements
that it enters into with different states which will trade
US nuclear technology as long as countries do not enter
the nuclear fuel cycle. This is what we've seen in
the United Arab Emirates. This is a crux of negotiations
(18:25):
with Saudi Arabia. This is why the US takes such
a grim view of Iran entering into the nuclear fuel cycle.
So this is a big deal because of its dual
use potential, and just in terms of how you can
build this resiliency in your supply chain. The CEO of
(18:46):
Urenco told me something interesting. He was talking about the
fact that some of his oldest centrifuges operating in Europe
have been running now for fifty years. Imagine your washing
machine on the spin cycle running from the last fifty
years without ever stopping. In those centrifusias. They've been running
through three Mile Island, they've been running through Chernobyl, they've
(19:07):
been running through the Fukushima meltdowns. And he said, you know,
the only thing that they don't like is to stop.
He was talking about in terms of like a very
physical material sense, and that you know, when you try
to stop something spinning at supersonic speeds, sometimes mistakes happen
and they spin out of control, so you want to
keep them running. But more broadly, it's an anecdote about
(19:28):
the commitment that economies need to make nuclear power profitable
and it requires a long term vision, probably sometimes with
state support. That is nurturing a strategic industry. You know,
touches far more than simple company profit and loss statements.
Speaker 2 (19:48):
You've talked about how It'll take many years and a
lot of money for the US to be able to
be independent of Russia and other places for uranium. What
happens if the situation in Ukraine escalates and the US
and Russia no longer do any business. What would that
(20:09):
mean for the US industry?
Speaker 4 (20:12):
Oh, you mean the worst case scenario, like if Russia
decides to completely cut US off or we decide to
completely boycott them, that would be bad. Most utilities tend
to keep about eighteen months of inventory on hand. They
have to refuel the reactors every eighteen months, so basically,
it's like they've got one spare set of fuel rods
laid around to put in when they need it, and
(20:35):
eighteen months after that, if they don't have another set
of fuel rods, then they have to turn the reactor off.
No gas, out of gas. Personally, I don't think that's
going to happen. I think that the chances of that
are near zero. But yeah, if there was no uranium supply,
if there was no nuclear fuel rod supply, that's what happens.
Nuclear power plants aren't magic. You got to fill the
(20:57):
tank every so often.
Speaker 2 (20:59):
And why do you think it's a near zero chance.
Given how chill the situation is right now.
Speaker 4 (21:04):
I think the international community would come together somehow. They
could figure out who needs some today and who could
wait six months. I think there would be some ability
to coordinate if necessary.
Speaker 5 (21:17):
It's not just an American problem. This is a transatlantic problem,
and right now there is an installed industrial base that
is underutilized in Europe and Oro. For example, the French
National Champion is also sitting on a potential two billion
expansion of its uranium enrichment capacity. But just like Converdyne,
(21:41):
the conversion company here in the US, they're also waiting
signals from clients that they're ready to enter into long
term contracts. So there's a lot of money sitting on
the sideline. There's a lot of ways to expand capacity,
to create redundancies and supply chains, but it's a slow
train that's just starting to get moving.
Speaker 2 (22:02):
Will looking ahead is someone who covers this industry. Where
do you think it goes from here? Do you think
the US eventually does wean itself from Russian uranium?
Speaker 4 (22:12):
Maybe not one hundred percent, but I think there's a
really strong desire to build up enough domestic capacity to
not be so dependent upon them.
Speaker 5 (22:22):
The US was the biggest enricher of uranium during the
nineteen seventies. It supplied all Western capitalist economies. It was
the biggest player out there. That's when Uranka was just starting, right.
So this is like around nineteen seventy two, seventy three,
seventy four. You fast forward a half a century, and
the US looks like it's a rebooting Manhattan Project version
(22:45):
two point zero, this time for exclusively peaceful purposes. It's
a massive undertaking, but the US is proven it's capable
and up to the task before it can do so again.
But in terms of accomplishing some of the loftier goals
of the G seven statement of pushing Russia out of
the international nuclear fuel cycle entirely, that's probably less likely. Russia,
(23:08):
even if it loses the Western markets, is busy building
new reactors in Bangladesh, Egypt, Turkey, Iran, a bunch of
different countries, and they're filling their pipeline up with new
customers for decades ahead.
Speaker 2 (23:22):
Jonathan Will, thanks so much for coming on the show.
Thanks thanks for listening to us here at the Big Take.
It's a daily podcast from Bloomberg and iHeartRadio for more
shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or
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Email us questions or comments to Big Take at Bloomberg
(23:42):
dot net. The supervising producer of The Big Take is
Vicky Virgolina. Our senior producer is Katherine Fink. Federica Romaniello
is our producer. Our associate producer is Zenobsidiki. Hilde Garcia
is our engineer. Our original music was composed by Leo Sidrin.
I'm west Kasova. We'll be back tomorrow with another Big
(24:03):
Take
Stomic test. The Russians have a bomb, were supposed to
be years ahead of them, but thumps, What were you
guys doing in Los Almus.
Speaker 2 (00:15):
Uranium, of all things, has become a hot topic this summer,
in part, of course, because of the hit movie Oppenheimer
about the Manhattan Project and the man often called the
father of the atomic bomb.
Speaker 3 (00:27):
A shark. Time ago, an American aeroplane dropped one bomb
on Hiroshima and destroyed its usefulness to the enemy. That
bomb has more power than twenty thousand tons of T
and T.
Speaker 2 (00:43):
The bomb President Truman was talking about that devastated Hiroshima
on August sixth, nineteen forty five, contained about one hundred
and forty one pounds of enriched uranium. Uranium is still
used in nuclear weapons, but it's the non military uses
that we're talking about today and the reason it's in
the news now.
Speaker 4 (01:03):
Uranium is the basic fuel that's used in nuclear power plants.
It's not particularly rare, but the whole process of getting
the U two thirty five isotopes concentrated high enough to
run in a nuclear power plant very complicated.
Speaker 2 (01:18):
That's Bloomberg's Will Wade he and Jonathan Tyrone report that
for decades, the US has depended on Russia for much
of this hard to enrich uranium needed to fuel nuclear
power plants, and that picture has become much more complicated
since Russia's invasion of Ukraine.
Speaker 5 (01:37):
It's not just the enrichment that Russia is supplying, it's
also conversion, it's also raw uranium, and so you see
weak links along the nuclear fuel supply chain at every stage.
Speaker 2 (01:50):
Will and Jonathan are here to talk about a new
push to rebuild the West's uranium capabilities. Some are likening
it to a Manhattan Project two point zero, but this
time for peaceful purposes. I'm Weskosova today on the big take.
(02:12):
Can the US wean itself from Russian uranium? Jonathan? Why
is the US dependent on Russia of all places for uranium.
Speaker 5 (02:29):
Well, it goes back to the end of the Cold War,
and what happened was the US began a commercial relationship
with Russia's national energy company Rosa Tolment. It was called
Mega tons to megawatts, and basically we began importing Russian
weapons grade uranium down blended into a mixture that could
(02:50):
be made into fuel assemblies for American nuclear power plants.
And that commercial relationship, you know, has extended for the
last thirty year years. In that period of time, there
are also serious stresses to the nuclear industry, first and
foremost being the Fukushima Daishi nuclear power plants following the
earthquake in twenty eleven. Then also we had the fracking
(03:14):
boom in the United States with massive supply of natural
gas to American electricity generators, which also served to displace
participants in the nuclear fuel cycle.
Speaker 2 (03:25):
Will As Jonathan says, after the Cold War was over
in the US and the Soviet Union were no longer
competing in an arms race, it set up a whole
different dynamic when it came to what uranium was actually worth.
Speaker 4 (03:39):
Yeah, the whole US uranium industry is kind of almost gone.
There's very little mining. The closest big mining is in Canada.
There's almost no enrichment except for the plant in New Mexico,
which is actually a European company. There's not a whole
lot of conversion. There's one facility, but it was shut down.
They're about to reopen it. In just the past several years,
(04:01):
there have been about a dozen nuclear reactors have closed
down for economic reasons because they just couldn't compete with
the cheap natural gas electricity.
Speaker 5 (04:10):
So the last US owned commercial enrichment plant was in Paducah,
Kentucky that used a radically different technology to enrich uranium
called gaseous diffusion. The gaseous diffusion is a way of
enriching uranium that uses uranium hexafluorid gas pressed through different
membranes transferred through different chambers to enrich the uranium two
(04:34):
thirty five isotope into a concentration necessary to sustain a
fission chain reaction. The US is basically the last country
to use gaseous diffusion for enriching uranium, the reason being
it takes a lot more energy to enrich uranium through
gaseous diffusion, and why did the US do that Because
they were drawing massive electricity reserves off of the Tennessee
(04:56):
Valley Authority, and so this whole industry of the nuclear
fuel cycle in the US was wrapped up with national
defense policy is about stockpiling during the Cold War, and
the commercial enrichment services for nuclear power plants came from
the same plant, but there wasn't much of a cost
benefit analysis when it came to looking for the most
(05:16):
efficient way to make uranium for fuel for reactors until
after the Cold War ended and the commercial imperatives of
competing in the market were thrust upon the US, and
that's when they had to start developing what everybody else
in the world is using for enriching uranium, which is
the centrifuge. Centrifuges, which are supersonic spinning cylinders, is similar
(05:42):
to your washing machine. These actually use only about five
percent of the energy requirements that gashous diffusion requires. Centrifuges
became the technology of choice in the post Cold War era.
Speaker 2 (05:56):
So will how much uranium does the US get from Russia?
Speaker 4 (06:01):
Well, Russia is the world's biggest supplier of enriched uranium,
about a quarter of the fuel and our nuclear power
plants comes from Russia. The uranium supply chain is long
and complicated. You start with raw uranium ore. It's milled
down into a powder they call it yellow cake. The
yellow cake is mixed with a fluorine gas and it's
(06:21):
converted into uranium hexafluoride. That's the conversion step of the process.
The UF six gets sent to the enrichment site and
that's where they concentrate it into the five percent necessary
for fuel. And once you have the enriched uranium, and
remember that's what we get mostly from Russia, then enriched
uranium gets sent to a fabricator where they create nuclear
(06:42):
fuel rods out of it.
Speaker 2 (06:44):
And so this can pass through a lot of different
countries and a lot of different companies on the way
to being the final product.
Speaker 4 (06:53):
It can, but it doesn't have to. Russia has all
of the steps, China has all of the steps. It's
only the US in Europe that's really broken it down
into so many different places and people, and that kind
of makes the whole process a lot more complicated.
Speaker 2 (07:05):
Does any of the uranium that comes from Russia wind
up in US and nuclear weapons?
Speaker 1 (07:11):
No.
Speaker 5 (07:12):
The dirty secret is that there's not a lack of
nuclear fuel. It just that it's in the wrong place.
Like the US has a lot of nuclear fuel, it
just all in bombs. We could really screw up the
nuclear fuel market if we decide to disarm and start
to downblend. You can downblend the highly enriched uranium found
in nuclear weapons and reconvert that into a lower enriched
(07:32):
blend necessary for power plants.
Speaker 4 (07:36):
It's like you're unenriching it.
Speaker 2 (07:38):
And will you visited the only enricher of uranium in
the US. It's a company called Urinko. What was that like.
Speaker 4 (07:47):
Well, it's in a tiny town called Unice, New Mexico.
It's right on the eastern border of New Mexico. It's
a mile from Texas. It was this spotless, pristine industrial
site in the middle of the desert. There's armed guards,
a lot of security getting in. It's been open for
a long time, but it was spotless, just spotless that
(08:09):
all the machines were gleaming. I was really impressed by
how clean it is. So they take us into the
room with the centrifuges and there's just hundreds and hundreds
of them, all in a row. It just stretches on
to the end of this vast room. I couldn't even
see the end of it. They're spinning so fast. There's
this really high pitched wine. We had to wear ear
(08:30):
protection and it didn't sound that loud, but they told
us that the frequency is exactly the right frequency that'll
really damage your ears if you're not careful. So all
the centrifuges, they look like long, thin tubes about twenty
something feet tall. I couldn't tell for sure. The tops
of it were concealed by these curtains because that's where
they have the piping that connects one to the next,
(08:52):
to the next to the next. They call that a cascade,
and that is apparently a really important trade secret on
how they managed to get the gear to flow from
one to the next. They wouldn't let anybody see what
that looks like.
Speaker 2 (09:04):
And once the process there is done, what happens with
that uranium? Where does it go?
Speaker 4 (09:09):
Then it gets sent to the fabricator where it is
converted into fuel pellets. The pellets are inserted into fuel rods.
Every reactor has its own specific design for what those
fuel rods are supposed to look like, and those get
sent to the power plants after the break.
Speaker 2 (09:26):
What is the US doing to limit its reliance on
Russian uranium? So, Jonathan, we've been talking about how and
why the US is so dependent on Russia for uranium,
and now the US government seems to have woken up
(09:47):
to the fact that they need to change this. What
are they doing.
Speaker 5 (09:50):
They're working with their allies to address this as a
common security problem and not just a national security problem.
There's different levels of concern. It's not just the US,
it's also Eastern European allies, which, as former Soviet satellites,
are operating about two dozen so called Vveer reactors which
(10:11):
are almost exclusively fueled by Rosatum, Russia's national nuclear giant.
So I mean that's a very acute problem affecting European
power supplies. Then you move over to the North American
supply chains, the nuclear supply chains, and there we see
it's not just the enrichment that Russia is supplying, it's
(10:32):
also conversion, it's also raw uranium, and so you see
weak links along the nuclear fuel supply chain at every stage.
So when President Biden met his Canadian counterpart Justin Trudeau
earlier this year, they agreed to reboot North American nuclear
fuel cycle.
Speaker 1 (10:51):
Because of our shared prosperity is deeply connected to our
shared security in the past. In the past years have
proved the Canada the United Days are not insulated from
the challenge to impact the rest of the world.
Speaker 5 (11:05):
They subsequently went to the G seven meeting in Sapporo, Japan.
A couple weeks later in April, they convinced the UK
and France to come on board and the joint statement
from Sapporo, they said that they want to push Vladimir
Putin and Russia out of the nuclear fuel cycle entirely. Now,
that will be pretty hard, because you know, even during
the darkest times in the Cold War, the US, for example,
(11:26):
was buying titanium from the Soviets for their nuclear deterrence.
I think the important point to recognize is that it
won't be easy to knock Roseat to them out of
the nuclear fuel business. They continue supplying Eastern European utilities
with the fuel they need for their reactors, and that
business has in fact grown in the twelve months after
(11:49):
the war began and continues to this day.
Speaker 4 (11:53):
But you know what, we should point out that they
are starting to lose some of that business. Westinghouse, the
US nuclear company, just this year, has picked up a
couple contracts to supply fuel rods to those Eastern European reactors.
Then they're going to have to build a new design
fuel rod to fit those reactors.
Speaker 2 (12:11):
And will you also write in the story that the
Biden administration is pushing Congress to spend a lot of
money to try to jumpstart the US uranium process. Again,
there's a push in Congress right now. To create a
domestic stockpile of nuclear fuel, it'd be kind of like
the Strategic Petroleum Reserve, which is exactly what it sounds like.
(12:33):
It's a huge amount of oil that stored and they
release that oil to adjust pricing when necessary. And so
the US wants to have a stockpile of nuclear fuel
just as a buffer against any kind of international tensions.
You said earlier that Russia has their entire uranium fuel
cycle in their own country. They do it from beginning
(12:54):
to end, and the US doesn't. What will it actually
take for the US to get that capability.
Speaker 4 (13:01):
It would take long term commitments from customers. Especially remember
talking to the head of Converdine, that's the company that
does conversion, the process of turning the yellow cake into
UF six. He said that they'd be happy to do it.
It's not that complicated, but it's not that cheap. He'd
need long term commitments, like long term means about ten
(13:21):
years from about ten customers to justify really going into
the expansion in a way that would be big enough
to displace the Russians.
Speaker 2 (13:30):
To have that many customers will would that mean that
the US would have to really ramp up its nuclear energy.
Speaker 4 (13:38):
It would mean that the utilities that operate nuclear power
plants now would need to start signing contracts to buy
all of their fuel from US suppliers instead of international suppliers.
And in fact, the people at Urenko in New Mexico
told me that since Russia invaded Ukraine, their orders have
gone up about twenty five percent because they're American utility.
(13:59):
Customers have come to them and said, we'd like to
start buying more from the United States than from Russia.
Speaker 5 (14:05):
And there's another dimension as well, which is more future oriented,
and it involves the next generation of American reactors. Foreseeing,
these are the so called small modular reactors, which require
a different kind of nuclear fuel, a higher concentration. It's
called high assay low enriched uranium. Rather than five percent
(14:25):
uranium two thirty five bus topes, you're looking closer to
nineteen nineteen point seventy five percent. And the reason is
that if you're deploying more nuclear reactors that are smaller,
you want to have to refuel them less often. And
so the higher grade, the higher concentration nuclear fuel, allows
them to burn longer without being refueled. And right now,
(14:48):
the US is one hundred percent dependent on Russia for
high assay low enriched uranium, and this is a key
bottleneck that has to be solved right now, because if
we want to be deploying SMR reactors at the end
of this decade, then that part of the supply chain
has to be solved now. Because these are all long
(15:09):
engineering processes. Factories have to be built, lines have to
be built, environmental regulations, safety regulations. It takes a long process.
So if we want to get it done by twenty thirty,
it has to start now.
Speaker 2 (15:22):
And you write that some plants that had closed down
are now being reopened.
Speaker 4 (15:28):
Well, the converdyine conversion facility in Illinois that was shut
down if several years ago for economic reasons because the
market was so oversupplied. They basically said, we can't make
money selling this stuff. We're just going to sell out
of inventory until further notice. And now they're starting to
reopen that because the price has gone up about tenfold.
Speaker 2 (15:47):
When we come back, what would it take for the
West to cut Russia out of the international nuclear fuel cycle.
Speaker 4 (16:02):
Nazier's new military rulers are in a standoff with the West,
and some of their neighbors, refusing to hand back power
to the man they oustd it. Nizer's coup leaders have
closed the country's airspace until further notice.
Speaker 5 (16:14):
The regional bloc ECOWAS has said it wants a diplomatic
and peaceful resolution to the takeover, but that no options
are off the table.
Speaker 2 (16:23):
Jonathan, you write that the recent coup in Niger, which
is one of the top uranium producers in the world,
shows the geopolitical stakes of this business. What should other
countries take away from what's happening there.
Speaker 5 (16:37):
So, Nizier's the sixth biggest producer of uranium or in
the world. It's a key supplier for France and other
European utilities. The lesson of Niger is what the companies
call depth and defense. They need to have a redundant
supply chain and so you will see or no investing
(16:58):
in Canadian minds. You see additional Canadian minds responding to
tightness in the ore market by opening up mothballed minds.
Just another example. Everybody is talking about Niger right now,
but you see Rosatom displacing US and European fuel makers
and entering into a new agreement with South Africa to
(17:19):
reboot that country's nuclear fuel cycle. So the thing to
pay attention to isn't just income statement the balance sheet,
it's also the geopolitical states that are shifting as Western
companies try to displace Russia and vice versa.
Speaker 4 (17:36):
I think the lesson from Niger is the same lesson
from Russia, which is you don't want to be dependent
on countries that may not be stable as your supplier.
And also we saw in South Africa, uranium isn't just
a product you buy and sell to make a profit.
It's a key part of international diplomacy.
Speaker 2 (17:56):
That's really interesting point. Will and you write then that
the US government is grappling with this very question.
Speaker 5 (18:04):
The US Department of Energy has what is called the
one two to three Agreement, which is a nuclear agreements
that it enters into with different states which will trade
US nuclear technology as long as countries do not enter
the nuclear fuel cycle. This is what we've seen in
the United Arab Emirates. This is a crux of negotiations
(18:25):
with Saudi Arabia. This is why the US takes such
a grim view of Iran entering into the nuclear fuel cycle.
So this is a big deal because of its dual
use potential, and just in terms of how you can
build this resiliency in your supply chain. The CEO of
(18:46):
Urenco told me something interesting. He was talking about the
fact that some of his oldest centrifuges operating in Europe
have been running now for fifty years. Imagine your washing
machine on the spin cycle running from the last fifty
years without ever stopping. In those centrifusias. They've been running
through three Mile Island, they've been running through Chernobyl, they've
(19:07):
been running through the Fukushima meltdowns. And he said, you know,
the only thing that they don't like is to stop.
He was talking about in terms of like a very
physical material sense, and that you know, when you try
to stop something spinning at supersonic speeds, sometimes mistakes happen
and they spin out of control, so you want to
keep them running. But more broadly, it's an anecdote about
(19:28):
the commitment that economies need to make nuclear power profitable
and it requires a long term vision, probably sometimes with
state support. That is nurturing a strategic industry. You know,
touches far more than simple company profit and loss statements.
Speaker 2 (19:48):
You've talked about how It'll take many years and a
lot of money for the US to be able to
be independent of Russia and other places for uranium. What
happens if the situation in Ukraine escalates and the US
and Russia no longer do any business. What would that
(20:09):
mean for the US industry?
Speaker 4 (20:12):
Oh, you mean the worst case scenario, like if Russia
decides to completely cut US off or we decide to
completely boycott them, that would be bad. Most utilities tend
to keep about eighteen months of inventory on hand. They
have to refuel the reactors every eighteen months, so basically,
it's like they've got one spare set of fuel rods
laid around to put in when they need it, and
(20:35):
eighteen months after that, if they don't have another set
of fuel rods, then they have to turn the reactor off.
No gas, out of gas. Personally, I don't think that's
going to happen. I think that the chances of that
are near zero. But yeah, if there was no uranium supply,
if there was no nuclear fuel rod supply, that's what happens.
Nuclear power plants aren't magic. You got to fill the
(20:57):
tank every so often.
Speaker 2 (20:59):
And why do you think it's a near zero chance.
Given how chill the situation is right now.
Speaker 4 (21:04):
I think the international community would come together somehow. They
could figure out who needs some today and who could
wait six months. I think there would be some ability
to coordinate if necessary.
Speaker 5 (21:17):
It's not just an American problem. This is a transatlantic problem,
and right now there is an installed industrial base that
is underutilized in Europe and Oro. For example, the French
National Champion is also sitting on a potential two billion
expansion of its uranium enrichment capacity. But just like Converdyne,
(21:41):
the conversion company here in the US, they're also waiting
signals from clients that they're ready to enter into long
term contracts. So there's a lot of money sitting on
the sideline. There's a lot of ways to expand capacity,
to create redundancies and supply chains, but it's a slow
train that's just starting to get moving.
Speaker 2 (22:02):
Will looking ahead is someone who covers this industry. Where
do you think it goes from here? Do you think
the US eventually does wean itself from Russian uranium?
Speaker 4 (22:12):
Maybe not one hundred percent, but I think there's a
really strong desire to build up enough domestic capacity to
not be so dependent upon them.
Speaker 5 (22:22):
The US was the biggest enricher of uranium during the
nineteen seventies. It supplied all Western capitalist economies. It was
the biggest player out there. That's when Uranka was just starting, right.
So this is like around nineteen seventy two, seventy three,
seventy four. You fast forward a half a century, and
the US looks like it's a rebooting Manhattan Project version
(22:45):
two point zero, this time for exclusively peaceful purposes. It's
a massive undertaking, but the US is proven it's capable
and up to the task before it can do so again.
But in terms of accomplishing some of the loftier goals
of the G seven statement of pushing Russia out of
the international nuclear fuel cycle entirely, that's probably less likely. Russia,
(23:08):
even if it loses the Western markets, is busy building
new reactors in Bangladesh, Egypt, Turkey, Iran, a bunch of
different countries, and they're filling their pipeline up with new
customers for decades ahead.
Speaker 2 (23:22):
Jonathan Will, thanks so much for coming on the show.
Thanks thanks for listening to us here at the Big Take.
It's a daily podcast from Bloomberg and iHeartRadio for more
shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or
wherever you listen, and we'd love to hear from you.
Email us questions or comments to Big Take at Bloomberg
(23:42):
dot net. The supervising producer of The Big Take is
Vicky Virgolina. Our senior producer is Katherine Fink. Federica Romaniello
is our producer. Our associate producer is Zenobsidiki. Hilde Garcia
is our engineer. Our original music was composed by Leo Sidrin.
I'm west Kasova. We'll be back tomorrow with another Big
(24:03):
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