🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 2-Russia breaks "wall" into U.S. nuclear market

Published 05/26/2009, 01:09 PM
Updated 05/26/2009, 01:17 PM
SIEGn
-
AEE
-

* $1 bln in deals signed with PG&E, Ameren Corp, Luminant

* Will give Russia 20 percent of U.S. uranium market 2014-2020

* Russia sees nuclear fuel storage in U.S. as next step

(Recasts with quotes, details, background)

By Simon Shuster

MOSCOW, May 26 (Reuters) - Russia signed a landmark deal to supply nuclear fuel directly to U.S. companies on Tuesday, setting itself up to control 20 percent of the U.S. uranium market and extending its global reach in the nuclear sector.

At a ceremony in the Russian capital, U.S. electricity firms PG&E, Ameren Corp and Luminant signed deals to get more than $1 billion in uranium supplies from Russia's state nuclear fuel exporter Tenex between 2014 and 2020.

"This is a revolutionary breakthrough," Sergei Kiriyenko, the head of Russia's state atomic energy firm, Rosatom, which controls Tenex, told reporters. Until last year, U.S. anti-dumping laws had only allowed Russia to sell the United States uranium recovered from dismantled Soviet nuclear weapons. These sales are carried out through U.S. uranium trader USEC Inc.

"We have broken through the wall forbidding us to sell Russian fuel to the American market. After the contracts signed today, we will start new contracts," a jubilant Kiriyenko said after drinking toasts of champagne with the Americans. "This is only the beginning."

Bruce Hamilton, the president of Fuelco, the intermediary set up by the three U.S. companies for the deal with Russia, said Tuesday's agreements open the door for Russia to directly take 20 percent of the U.S. uranium market between 2014 and 2020.

"The Russians do it all. They mine it, they convert it and they enrich it," Hamilton told Reuters after the deals were signed. "And after 2020, it's just wide open (for Russia)."

The Russian fuel would be used initially to provide power to 5 million U.S. homes in California, Texas and Missouri, he added.

NUCLEAR STORAGE IN THE U.S.

Russia, one of the world's biggest nuclear players, has long been seeking to expand its clout in the sector by moving into developed markets such as the United States, European Union and Japan.

Earlier this year, it signed deals to cooperate with Japan's Toshiba and Germany's Siemens, putting Russia in the centre of a nuclear alliance stretching from Western Europe to East Asia.

Tuesday's deals extended its reach further into the United States, where Russia is now discussing access to nuclear infrastructure, such as uranium storage facilities, Kiriyenko said.

"The directors of the U.S. energy companies discussed this with us. For them it would be more convenient if these facilities were located right in the United States. This is a logical step for us," Kiriyenko told reporters.

He added that these facilities would be jointly owned.

Hamilton declined to comment on this project.

U.S. anti-dumping laws were eased last year in a deal between Moscow and Washington to allow direct sales of uranium to other U.S. firms aside from USEC.

Analysts expect the increased access for Russian uranium to lead to lower prices in the United States.

The head of Tenex, which is also known as Techsnabexport, said his company expects to get as much as 25 percent of the U.S. uranium market through the deals signed on Tuesday.

"I am confident other similar deals will follow," Tenex CEO Anatoly Grigoryev, who signed all the contracts on behalf of the Russian side, told reporters. (Editing by Anthony Barker)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.