Yes, well, sort of – and they have for some time now. It’s relatively old news, but a recent Times report and an upcoming book from the Hoover Institute’s Peter Schweizer have refocused attention on a 2008 blockbuster uranium deal involving Russia, the United States, and a Canadian company Uranium One. Pushing connections and presidential candidacies aside – the Clintons’ complicity is still very much speculation at this point – lets return to the deal and take a look at the US nuclear industry and, globally, the rise of Rosatom.
The saga begins in 2009 when, after roughly a year of negotiations, Russian state nuclear corporation Rosatom, acting though its subsidiary and Mining Division platform ARMZ, purchased a nearly 20 percent stake in Toronto-based Uranium One. The following year, ARMZ increased its stake to more than 51 percent – a deal that required Kazakh and Canadian regulatory approvals in addition to clearance by the US Committee on Foreign Investment. In 2013, ARMZ paid roughly $2.8 billion for the remaining 48 percent and full control of Uranium One. Finally, in that same year, Rosatom assumed direct ownership of the company, reorganizing it under Uranium One Holding (U1H) and delisting it from the Toronto stock exchange.
Among U1H’s assets are a handful of US projects and exploration tracts. The most advanced among them are Jab and Antelope, Moore Ranch, and Willow Creek – all of which are in Wyoming, developed under the auspices of Uranium One USA and Uranium One Americas. The Willow Creek project is their only currently active operation.
So, to further answer the lead question: Russia, via Rosatom and U1H, owns roughly 20 percent of US uranium production capacity. The share of US reserves is much less clear as economic constraints significantly muddy the picture. Looking at actual production, U1H, via Willow Creek, produced an estimated 210 tons of uranium, or 11 percent of the 1887.5 tons extracted in the US in 2014.
Still, it’s somewhat disingenuous to say this uranium is now Russia’s, to do with what it pleases, or to suggest that any amount of the uranium will end up in Iran. The current licenses – held by the US-based subsidiaries and approved by the US Nuclear Regulatory Commission – do not allow exports from any U1H US facility.
The truth is, the US uranium industry as its currently built isn’t all that American. In fact, it’s mostly Canadian. Qualms over perceived threats to national security are misplaced, though not entirely dismissible. The deal further illustrates an already pronounced trend of decline of US nuclear capabilities and influence at all stages of the nuclear fuel cycle.
Post-Fukushima – and post-shale gas revolution – US nuclear employment has fallen more than 34 percent and exploration and development drilling is down over 80 percent. Relatively low-grade uranium and low global prices stunt the value of US mines in the short- to medium-term. Further out, stricter regulation and a heavier reliance on the private sector, limit the industry’s potential abroad relative to its competitors.
Perhaps more importantly, the deal speaks to Rosatom’s aggressive new growth. Already the world’s most comprehensive nuclear services vendor, Rosatom is now one of the top three producers of uranium by volume worldwide. For the most part, the prize was Kazakhstan and not the United States, which is a symbolic victory at best. U1H’s Kazakh production now accounts for approximately 56 percent of Rosatom’s total production, both domestic and abroad. At 4,269 tons it’s also more than 20 percent of Kazakhstan’s total uranium production.
Rosatom’s downstream movements are just as well-defined. The company’s overseas order portfolio was up 9 percent to $73 billion in 2013, after 23 percent growth in 2012. Long a fixture in developing markets, Rosatom is turning its capable sights to the western world.
First published at Oilprice.com