|6.90 Centrus Finalizes Three Year Contract to Demonstrate HALEU Production|
BETHESDA, Md. – Centrus Energy Corp. (NYSE American: LEU) today announced the company has signed a three-year contract with the U.S. Department of Energy (DOE) to deploy a cascade of centrifuges to demonstrate production of high-assay, low-enriched uranium (HALEU) fuel for advanced reactors. The program has been under way since Centrus and DOE signed a preliminary letter agreement on May 31, 2019, which allowed work to begin while the full contract was still being finalized.
“Our partnership with the U.S. Department of Energy to develop and demonstrate a U.S. source of high-assay, low-enriched uranium will help America lead the transition to the next generation of advanced reactors,” said Daniel B. Poneman, president and CEO of Centrus. “We are confident in the solution that our technology offers in powering advanced reactors for a wide range of missions for the public and private sectors. We believe that our investment in this technology will position the Company to meet the needs of our customers as they deploy advanced reactors and fuels.”
Work under the contract will include licensing, constructing, assembling and operating AC100M centrifuge machines and related infrastructure in a cascade formation to produce HALEU at the American Centrifuge Plant in Piketon, Ohio, for the demonstration program.
HALEU is a component for advanced nuclear reactor fuel that is not commercially available today and may be required for a number of advanced reactor designs currently under development in both the commercial and government sectors. Existing reactors typically operate on low-enriched uranium (LEU), with the uranium-235 isotope concentration just below 5 percent. HALEU has a uranium-235 isotope concentration of up to 20 percent, giving it several potential technical and economic advantages. For example, the higher concentration of uranium means that fuel assemblies and reactors can be smaller and reactors will require less frequent refueling. Reactors can also achieve higher “burnup” rates, meaning a smaller volume of fuel will be required overall and less waste will be produced. HALEU may also be used in the future to fabricate next-generation fuel forms for the existing fleet of reactors in the United States and around the world; these new HALEU-based fuels could bring improved economics and inherent safety features while increasing the amount of electricity that can be generated at existing reactors.
The lack of a U.S. source of HALEU is widely seen as an obstacle to U.S. leadership in the global market for advanced reactors. For example, in a 2017 survey of leading U.S. advanced reactor companies, 67 percent of companies responded that an assured supply of HALEU was either “urgent” or “important” to their company. The survey also showed that “the development of a U.S. supplier” was the most frequently cited concern with respect to HALEU.
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| Reply to SunTzu772 - Msg #77 - 07/01/2019 10:29|
3.33 ignore or buy much higher 7/15..High Assay Low Enriched Uranium or HALEU
“Without a readily available domestic supply of higher enriched LEU in the USA, it will be extremely difficult to conduct research on advanced reactors, potentially driving American innovators overseas.”
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Centrus Energy Corp. supplies nuclear fuel and services for the nuclear power industry in the United States, Japan, Belgium, and internationally. The company operates in two segments, Low-Enriched Uranium (LEU) and Contract Services. Its LEU is a component used in the production of nuclear fuel for reactors to produce electricity. The company sells separative work units (SWU) component of LEU; SWU and uranium components of LEU; and uranium for utilities that operate nuclear power plants. It also offers technical, manufacturing, and engineering services to public and private sector customers, including the American Centrifuge engineering and testing activities, as well as performs research and demonstration work to support the U.S. energy and national security through a contract with UT-Battelle, LLC. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in September 2014. Centrus Energy Corp. is headquartered in Bethesda, Maryland.
Item 1.01 Entry into a Material Definitive Agreement
On May 31, 2019, American Centrifuge Operating, LLC, a Delaware limited liability company (“ACO”) and a wholly owned subsidiary of Centrus Energy Corp. (“Centrus”), entered into a Letter Agreement with the United States Department of Energy (“DOE”). Under the terms of the letter agreement, ACO will demonstrate the capability to produce high assay low enriched uranium (“HALEU”) with existing United States origin enrichment technology and provide DOE with HALEU for near term use in its research and development for the advancement of civilian nuclear energy and security, and other programmatic missions. HALEU is an advanced nuclear reactor fuel that is not commercially available today.
Pursuant to the letter agreement, ACO and DOE will work to enter into a definitive contract by October 31, 2019. The letter agreement authorizes up to $6.4 million in payments to ACO as the parties work to enter into a definitive contract. According to the letter agreement, the definitive contract is anticipated to be an incrementally funded, cost reimbursable contract with DOE reimbursing up to 80% of the costs and the Company incurring 20% of the project costs. The total amount of DOE’s share of the definitive contract is $115 million, and it is anticipated that the definitive contract will run through June 1, 2022.
In connection with the letter agreement, United States Enrichment Corporation, a Delaware corporation (“Enrichment”) and a wholly owned subsidiary of Centrus, entered into an Amendment to the Lease Agreement between Enrichment and DOE for the lease of the gas centrifuge enrichment plant facilities in Piketon, Ohio for the American Centrifuge plant and related personal property (the “GCEP Lease”) and has entered into a sub-lease with ACO. Pursuant to the amendment, the GCEP Lease, which was scheduled to expire by its terms on June 30, 2019, was renewed and extended until May 31, 2022, provided, however, that DOE has the right to terminate the GCEP Lease if the parties do not enter into a definitive contract as contemplated by the letter agreement. Any facilities or equipment constructed or installed under contract with DOE will be owned by DOE, may be returned to DOE in an “as is” condition at the end of the lease term, and DOE would be responsible for its decontamination and decommissioning.
The foregoing descriptions of the letter agreement and the amendment do not purport to be complete and are qualified in their entirety by the text of the agreements, copies of which are expected to be filed as exhibits to Centrus’ quarterly report on Form 10-Q for the second quarter ending June 30, 2019.
Centrus, or its subsidiaries, are also a party to a number of other agreements or arrangements with the United States government, as described in Centrus’ annual report on Form 10-K and other filings with the Securities and Exchange Commission.