Centrus Energy Corp. expects to receive a Department of Energy contract to produce an unspecified quantity of energy-dense low-enriched uranium “in the near term,” President and CEO Daniel Poneman said Thursday.
“[W]e continue to negotiate with the Department of Energy on the contract to build a high-assay-low-enriched uranium [HALEU] demonstration cascade, utilizing our improved AC-100M centrifuge technology and we expect that to be concluded in the near term,” the former deputy energy secretary said on a conference call with Centrus investors.
In the first quarter of 2019, Centrus narrowed its quarterly losses to just over $20 million as revenue rose 8% year over year to just under $40 million, according to the commercial uranium broker and government-services company’s latest 10-Q filing with the U.S. Securities and Exchange Commission.
“We continue to expect a return to profitability next year,” Poneman said, citing a continuing rise in commercial uranium prices. Centrus emerged from a Chapter 11 bankruptcy reorganization in 2014.
In January, DOE announced it would give Centrus a sole-source contract to build a 16-machine uranium enrichment cascade at the agency’s Portsmouth Site in Piketon, Ohio. The DOE Office of Nuclear Energy wants an American-built Centrus cascade to produce HALEU suitable for a range of civilian and defense applications.
To that end, DOE seeks $40 million in HALEU funding for fiscal 2020 within its fuel cycle reseach and development program, Secretary of Energy Rick Perry said Thursday during hearing of the House Energy and Commerce energy subcommittee.
Under the proposed Centrus contract, DOE’s Nuclear Energy Oak Ridge Site Office would pay Centrus subsidiary American Centrifuge Operating LLC $115 million over three years to build a brand-new series of its AC-100M centrifuges at Portsmouth. The contract would have a two-year base and a one-year option. The machines must by October 2020 produce an unspecified quantity 19.75-percent enriched uranium fuel.
The new HALEU cascade, unlike Centrus’ now-shuttered American Centrifuge Project, would be built from all U.S.-components, making it potentially eligible to supply uranium for natonal defense needs. Uranium purchased on the spot market often carries peaceful-use restrictions, meaning DOE’s semiautonomous National Nuclear Security Administration (NNSA) needs a domestic source of the fissile material for U.S. nuclear weapons and warship reactor fuel.
The NNSA will in 2038 require a new source of low-enriched uranium in order to create tritium needed to maintain the explosive power of the U.S. nuclear arsenal. As part of an analysis of alternatives slated to wrap up in December, the agency is considering using Centrus AC-100 series technology for this purpose.
Sen. John Barrasso (R-Wy.), chair of the Senate Environment and Public Works Committee, has questioned DOE’s decision to fund the Centrus demo with a sole-source contract from the Office of Nuclear Energy, rather than from a competitively awarded National Nuclear Security Administration contract. Barrasso, whose home state is a major source of domestic uranium, has also slammed the contract as an undeserved bailout for Centrus.
