Several developed nations have passed a host of sanctions against Russia in a global bid to stop its misguided war in Ukraine. Months after Russia declared war on Ukraine and breached its borders, dozens of countries placed sanctions on Russian exports, limited the movement of Russian money and cut the country off from critical exports.
However, despite efforts by the United States to distance itself from Russian exports, it seems Washington will have a hard time weaning itself off of Russian nuclear fuel. Since Russia is one of the top energy producers in the world, several countries rely on it as a source of energy. Europe, for instance, has been gripped by a historic energy crunch for the past few months after Russia cut natural gas exports to the rest of the EU.
Despite efforts by the U.S. government, Russia’s top position in global energy will make it hard for the nation to completely cut itself from the federation. Russia controls around two-fifths of enrichment services worldwide and supplies nearly 25% of the fuel used in 93 operational American nuclear reactors. Weaning itself off energy supplies from Russia will be a challenge as the country is deeply ensconced in the supply chain.
According to Secretary of Energy Jennifer Granholm, President Joseph Biden has redoubled his efforts to break America’s reliance on nuclear fuel from the Kremlin. She said that the country may have to increase its domestic uranium-enrichment capacity to replace supplies from Russia, stating in an interview that the administration will seek bipartisan support for legislation to make America’s fuel cycle supply chain completely independent.
However, it will likely take years to build up enough local capacity to fully replace Russian supplies, and with Russia supplying a great deal of the coal used in nuclear reactors in the U.S., Russia has a lot of leverage.
Washington is keenly aware of this reliance. Nearly one-half of the uranium used to power U.S. power plants is sourced from Russia and its allies Uzbekistan and Kazakhstan. It takes around three to five years to extract uranium from mines and refine it into nuclear fuel, but the U.S. currently doesn’t have any uranium production or processing.
Although some U.S. companies have indicated that they would resume local production if they signed long-term supply contracts with nuclear power producers, it would take a while before local production matches supplies from Russia and its allies, even if entities such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are willing to supply all the needed uranium to the domestic facilities focused on processing and enriching it for use at power plants.
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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