Russia’s Strategic Uranium Business: Part of an Ambitious Geopolitical Strategy

By Mark Chalmers, president and CEO of Energy Fuels Resources (USA) Inc., and Jeffrey Klenda, chair and CEO of Ur-Energy USA Inc.

It defies common sense that 20 percent of the U.S. uranium market is protected for Russian state-owned enterprises and their workers, while none of the U.S. market is reserved for the American uranium industry.

But that is the sad fact. Russia is effectively guaranteed 20 percent of the U.S. uranium market due to the Russian Suspension Agreement (RSA), a trade agreement from the early 1990s that was intended to limit Russian uranium sales into the U.S. This agreement was based on a U.S. Department of Commerce (DOC) determination that Russia was dumping uranium into our market. In its periodic reviews of the RSA, the DOC has determined several times that once the RSA is lifted, Russia will likely begin dumping uranium again. Once the RSA expires in 2020, the industry estimates that the amount of Russian uranium entering the U.S. could immediately shoot to more than 30 percent.

Meanwhile, our once robust domestic uranium mining industry will this year supply less than 1 percent of the uranium that U.S. nuclear utilities need. The rest comes from elsewhere — Russia, of course, as well as Kazakhstan, where Russia has significant ownership in several large mines, Uzbekistan and other adversarial countries. A rapidly declining amount of uranium is received from traditional U.S. free market allies such as Australia and Canada.

Why do American ratepayers subsidize Russian state officials who profit from their nation’s immense defense infrastructure that not only produces uranium, but also builds nuclear weapons? It is because Russia has established a system that looks like democracy, but is far from it. Russia maintains a unified authoritarian state that allows the country’s kleptocrats to enrich themselves by cheaply extracting and selling vast Russian and Kazakh natural resources to control critical global industries, particularly critical energy needs.

There is nothing secret about it. For years, those of us in the domestic uranium mining industry have watched Russia and its allies brazenly flood the global free market with cheap uranium from state-sponsored enterprises. U.S. miners aren’t the only ones suffering — so are our allies.

Last year, the largest, highest grade mine in Canada shut down due to low prices brought on by oversupply from Russia and its allies. Only one uranium mine still operates in Canada and it has an expected remaining life of less than 10 years.

The precipitous decline of domestic uranium mining is a glaring national security threat that only President Trump can eliminate. Secretary of Commerce Ross sent to the White House a report detailing the findings of a nine-month investigation into the effects on national security of uranium imports. Unlike previous administrations that chose to do nothing, President Trump can act to preserve the domestic uranium industry and mining jobs while safeguarding national security.

We encourage President Trump to impose a modest quota that, in effect, reserves 25 percent of the U.S. market for domestic uranium. With such a quota, America can block Russia’s march toward domination of the global uranium industry.

With President Trump’s strategic and correct emphasis on energy independence and leadership, we trust that he will make a decision that will protect the domestic uranium mining industry and the security of our nation.