The future of nuclear energy is becoming uncertain as the European Union looks for ways to decrease its dependence on oil and gas from Russia, which invaded Ukraine last month. Russia is the second-largest source of uranium around the globe despite the supply chain’s diversification, with countries such as Canada, Kazakhstan and Niger contributing substantial amounts of uranium. Currently, the domestic production of uranium in the EU is still low, with uranium being supplied from foreign sources making up more than 90% of total consumption.
Russia, which has the biggest enrichment capacity globally, is also a major provider of enriched uranium. China has the second-biggest enrichment capacity across the globe.
Countries with enrichment capacities in the EU include France, the Netherlands and Germany. Additionally, about 18 of the nuclear reactors in Europe have been designed in Russia, with half a dozen in Czech Republic, four in Slovakia, four in Hungary, two in Finland and two in Bulgaria. These reactors significantly contribute to electricity supply in these countries, with the four reactors in Hungary meeting roughly one-half of the country’s electricity needs. In 2020, nuclear power generated about one-quarter of the total electricity produced in the EU bloc.
Given that Russian-designed nuclear plants in Europe depend mostly or solely on Russia for fuel fabrication, the EU cutting links with the Eastern European country may be harder than expected. The United States is also trying to do the same, after President Joe Biden issued an executive order earlier in March to stop imports of gas and oil from Russia from entering into the country. However, no mention of uranium for nuclear power plants was made.
In comparison to the EU, America’s reliance on Russia is smaller. In 2020, Kazakhstan made up 22% of uranium imports into the U.S. with Russia and Uzbekistan accounting for 16% and 8% respectively.
In the last few years, domestic production of uranium in the U.S. has declined significantly, with the U.S. Energy Information Administration failing to publish quarterly production figures for 2020–21 because of low reporting thresholds.
Senator John Barrasso of Wyoming has proposed a bill to ban imports of uranium from Russia, which may end up cutting the U.S. off from the Eastern European country’s imports. In the European Union, the Ukraine war has highlighted the need for Europe to diversify its energy supplies. It also emphasizes on the need for the EU to decrease its dependence on Russian enrichment and uranium fuel, especially with output from uranium producing countries such as Canada, Kazakhstan and Australia increasing.
For the U.S. to become energy self-sufficient, it needs to incentivize investment into domestic enrichment facilities so that the uranium mined by stateside companies such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) doesn’t have to be shipped abroad for processing.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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