Centrus Energy Soars After Starting Commercial Uranium Enrichment Activity

The long awaited buildout of Centrus Energy’s uranium enrichment facility is finally underway as the company announced this morning it has begun constructing new centrifuges to support commercial production of low-enriched uranium (LEU). LEU stock is surging as much as 14% on the news. 

Why should anyone care though? We already have Urenco producing massive quantities of LEU in New Mexico. They’ve been producing millions of separative work units (SWU) worth of enriched uranium for use in the domestic commercial fleet of reactors in the US for years. They even export some of that enrichment to foreign reactor operators.

What makes the Centrus effort so special?

The difference is that under Trump, the US is done relying on others for its fuel. Not just gas or oil, but now uranium as well. Almost a quarter of US enriched uranium is imported from Russia, with the rest coming from companies like Urenco and Orano, all owned by foreign governments.

The US hasn’t produced its own uranium since the last plant closed in 2013, one of the major policy failures following the drop in approval for the use of nuclear energy following the Fukushima disaster in 2011.

Companies like Centrus Energy, BWXT, and General Matter, are both US owned and operated. The American ownership of the technology and the state-side location of operations enables the nuclear fuel to be labeled as unobligated.

Obligated fuel means in order to produce it, the use of foreign technology or equipment occurred at some point in the fuel chain, meaning the fuel cannot be used for US government purposes of any kind. All of the fuel that’s used in the US Navy’s submarine and carrier reactors, DoE research reactors, all the reactors under the Army’s Janus Program, as well as the multiple other programs that are ongoing with the US government, will not be able to use fuel that is obligated.

Only companies like General Matter, BWXT, and Centrus, can produce fuel that is allowed to be used by the US government for government purposes.

Centrus will rely on its domestic manufacturing chain to produce the AC100M enrichment centrifuge design, which is built on the AC100 design used in past enrichment cascades. With backing from the DoE’s LEU award program, international backing from South Korea, and recent significant capital raises and convertible notes offerings, Centrus has the capital on hand and the backlog stacked up to support the buildout of new enrichment capacity. They are already producing high-assay LEU (HALEU), which was developed with the DoE over the past few years.

The first production of LEU is expected in 2029.