The governments of the U.S. and the Russian Federation have approved an agreement allowing three international companies to buy uranium derived from Russian nuclear weapons.
The commercial transaction stems from a 20-year agreement, signed in 1993 by the Russian and American governments, which called for 500 tonnes of HEU to be diluted in Russia and delivered to the U.S. as low-enriched uranium (LEU) suitable for use in nuclear energy plants. The LEU being delivered during this period represents about 400 million lbs. of natural uranium (as U3O8), of which more than 40 million lbs. have already been purchased and delivered.
Under the terms of the commercial agreement, the companies involved in the consortium have exclusive options to buy about 260 million lbs. of the 360 million lbs. of U3O8 scheduled for delivery from Russia to the U.S. over the remaining 15-year term. The companies are allowed to buy most of the weapons-derived uranium upon delivery to the U.S., or (under certain conditions) from a Russian stockpile, subject to conditions imposed by the Russian government and U.S. quota allocations.
Assuming the companies exercise their options, allocation of the material available to the companies is Cameco 45%, Cogema 45% and Nukem 10%, until 2002, when the split will become 42.5%, 42.5% and 15%, respectively. Cameco’s potential share of the material represents more than 100 million lbs. of U3O8 over the 15-year period. The companies can then resell these quantities in international markets.
The current market value of the uranium that the companies are entitled to buy is US$2.8 billion, based on current spot market prices of US$10.75 per lb. U3O8.
Cameco President Bernard Michel says the commercial agreement took many years to complete. “The considerable efforts of the two governments to agree on an appropriate framework will now allow the commercial implementation of the HEU agreement as first envisioned in 1993, when it was signed. It should permit the Russian Federation to receive maximum value for its weapons-derived uranium, thereby encouraging the process of disarmament. At the same time, the commercial agreement will provide Cameco with additional business opportunities using an alternate source of uranium.”
Since the 1993 agreement was signed, some 2,300 Russian nuclear weapons have been dismantled.
Be the first to comment on "COAL, URANIUM & OIL SANDS — Companies to turn weapons into energy"