US takes steps to secure nuclear fuel supply chain amid global bottlenecks

The United States commits $2.87 billion to enhance domestic uranium enrichment capacity, aiming to address global supply vulnerabilities and support the future of nuclear power amidst geopolitical and market challenges.

The United States has moved decisively to rebuild a domestic nuclear fuel supply chain, but planners warn that policy and capital alone will not erase deep global bottlenecks in uranium extraction, conversion and enrichment.

On 5 January the U.S. ...

Department of Energy announced a multi-year package to expand domestic enrichment capacity for low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU). According to the Department of Energy, the package totals $2.7 billion and awards roughly $900 million each to American Centrifuge Operating, General Matter and Orano Federal Services, with a further $28 million for Global Laser Enrichment to develop next‑generation technologies. The department framed the investment as part of the administration’s push for energy security and “restoring a secure domestic nuclear fuel supply chain capable of producing nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow,” Energy Secretary Chris Wright said in a statement. The Modern Diplomacy account of the announcement gave the figure as $2.87 billion.

Policymakers see the funding as necessary to support the United States’ 94 commercial reactors and to seed fuel production for advanced designs, but analysts at a Stanford-led Nuclear Fuel Cycle Roundtable and industry groups caution that the United States can only insulate itself so far from global market dynamics. “We sought to focus on the fuel supply chain, while much of recent private investment activity has been focused on current- and next-generation reactors amid this new nuclear groundswell. Specifically, our objective is to identify ‘what must be true’ for the fuel supply chain to support the growing demand,” STEER founder Adrian Yao told the roundtable.

The vulnerability is structural. The U.S. supply chain is largely self-sufficient only at the fuel fabrication end; front‑end stages, mining of uranium ore, conversion to gas and large‑scale enrichment, remain dominated by a handful of foreign players. Industry data and government reports identify Australia, Kazakhstan, Canada, Russia and Namibia among the globe’s largest uranium reserve holders. The Energy Information Administration reported that, by the end of 2024, U.S. commercial inventories amounted to about 167 million pounds of yellowcake uranium concentrate, with deliveries to the United States in that year coming predominantly from Canada (36%), Kazakhstan (24%) and Australia (17%).

Geopolitics has amplified supply fragility. Half of global enrichment capacity is concentrated in Russia, and U.S. policy has sought to cut dependence on Russian material: Congress enacted a ban on imports of unirradiated Russian LEU that took effect in 2024. The Department of Energy says it imposed a broader ban on LEU imports from Russia through to 31 December 2040 to address potential gaps. Observers at the Nuclear Fuel Cycle Roundtable noted market dislocations after the restrictions; STEER co‑author Bennett Johnson warned that China might use “flag swapping” to move Russian material into different markets, a practice the industry fears could blunt the intended isolation of Russian supplies. After a 2024 investigation into Chinese uranium imports, flows and investor confidence steadied but concerns about durable alternatives to Russian enrichment capacity persist.

Advanced reactor programmes add another layer of strain. Next‑generation reactors, including Generation IV designs, typically require greater quantities of enriched material. The lead article notes that some advanced designs demand roughly 40 tons of mined uranium versus about 10 tons for conventional reactors, and points out that China brought the first commercial Gen IV reactor online in 2023. Greater enrichment intensity increases the burden on conversion and enrichment facilities worldwide at a time when several Western conversion plants have closed, reducing supply diversity and exerting upward pressure on prices.

Market behaviour and private capital do not automatically close these gaps. The post‑Fukushima era saw a retreat from nuclear investment; between 2011 and 2020 some 65 reactors closed and contracts were not renewed. The recent revival has been driven in part by Big Tech demand for reliable, low‑carbon baseload power for data centres and artificial intelligence workloads. Major technology firms are among the private buyers re‑energising investor interest in everything from uranium producers to reactor builders. Canadian miner Cameco, for example, remains a major producer and is exploring advanced enrichment methods including laser technologies, but its operations, and those of other miners, face climate, technical and geopolitical risks that can constrain output.

Washington’s fiscal moves extend beyond enrichment awards. The Department of Energy’s FY2024 package included larger investments across advanced reactor R&D and fuel‑cycle infrastructure, and the DOE has also provided loans and awards to support small modular reactors and restart projects, signalling a whole‑of‑government approach to revive domestic capability. According to the DOE, these measures aim both to meet current reactor fuel needs and to make HALEU available for demonstration projects and commercial advanced reactors.

Yet experts argue that U.S. objectives will require a mix of domestic capacity building and durable international partnerships. Modern Diplomacy and industry sources urge the federal government to act as a stable buyer to underwrite conversion and enrichment facilities, and to negotiate credible supply arrangements with trusted foreign producers to keep costs down and capacity online. Without such bilateral and multilateral guarantees, policymakers risk a repeat of past supply squeezes that could slow reactor restarts and delay advanced reactor deployments.

The stakes extend beyond energy markets. Supporters argue a secure, resilient nuclear fuel chain is vital to national security and to maintaining an edge in energy‑intensive technologies such as AI. Critics caution that reshoring enrichment and bolstering inventories are necessary but insufficient if global mining, conversion and geopolitical bottlenecks are not addressed in parallel. As the United States scales up domestic enrichment, the challenge will be synchronising industrial investment, diplomatic arrangements and regulatory frameworks so that fuel is available at the volumes and prices needed to sustain both the current reactor fleet and a prospective nuclear expansion.

Source: Noah Wire Services