TURNING SWU INTO U TURNING SWU INTO U Thomas L. Neff Center for - PowerPoint PPT Presentation

TURNING SWU INTO U TURNING SWU INTO U Thomas L. Neff Center for International Studies Massachusetts Institute of Technology tlneff@mit.edu

URANIUM & SWU IMBALANCE � World Uranium Production Substantially Below Apparent Requirements � Commercial Optimal Tails ~ 0.34% U-235 � Uranium Production ~ 36,000 tU � Apparent Requirements ~ 70,000 tU � SWU Supply Substantially Above Apparent Requirements � SWU Supply (Primary & HEU) ~ 47,000 tSWU � Apparent Requirements ~ 35,000 tSWU

SWU SUBSTITUTES FOR U � Transaction Tails Vs. Operating Tails � In 1970s, Overfeeding Made U Disappear � Underfeeding Now Makes U Appear � Examine Quantitative Tradeoffs Between U & SWU � SWU/kg U � Cost/kg U � Volumes � Specific Sources of Uranium From SWU

SWU REQUIRED TO EXTRACT ADDITIONAL URANIUM 3.8 SWU/Kg U "Produced" 3.3 2.8 2.3 1.8 1.3 0.8 0.3 0.34 0.32 0.3 0.28 0.26 0.24 0.22 0.2 0.18 0.16 0.14 0.12 0.1 Tails Assay %

SW U/KgU 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0 . 3 0 4 % 0 . 3 3 % 0 AS TAILS ASSAY DECREASES . 3 2 % 5,000 0 . 3 1 URANIUM “PRODUCED” % 0 . 3 0 % 0 . 2 9 % 0 . 2 8 % 10,000 0 . 2 7 % 0 . 2 6 % Additional U 0 . 2 5 % 0 . 2 4 % 15,000 0 . 2 3 % 0 . 2 2 % 0 . 2 1 % 0 . 2 0 % 0 . 1 9 % 0 . 1 20,000 8 % 0 . 1 7 % 0 . 1 6 % 0 . 1 5 % 0 . 1 4 % 0 . 1 3 % 0 . 1 2 % 0 25,000 . 1 1 % 0 . 1 0 %

ADDITIONAL SWU REQUIRED TO “PRODUCE” U AT VARIOUS TAILS ASSAYS 30,000 Additional t SWU Required 25,000 20,000 15,000 10,000 5,000 % % % % % % % % % % % % 3 1 9 7 5 3 1 9 7 5 3 1 3 3 2 2 2 2 2 1 1 1 1 1 . . . . . . . . . . . . 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5,000 10,000 15,000 20,000 25,000 Additional t U

ENRICHMENT SOURCES OF URANIUM � Underfeeding � HEU Split Tails � European Tails Upgrading � HEU and Its Blend-Stock � Russian Tails Stripping

ENRICHMENT PLANT UNDERFEEDING � Enricher Contracts to: � Sell 5.0 million SWU to Enrich @ 0.34% Tails � Utilities Deliver 9,650 t U � Utilities Receive 861 t EUP (@ 4.5%) � Enricher Actually: � Uses 5.37 million SWU to Enrich @ 0.30% Tails � Feeds 8,800 t U to Make EUP � Resells 850 t U � Delivers 861 t EUP (@ 4.5%)

HEU SPLIT TAILS � USEC Receives From Tenex: � 885 t EUP (Avg. 4.5%) from 30 t HEU Containing: • 5,500 t SWU @ 0.30% Tails • 9,040 t U @ 0.30% Tails � Utilities Deliver 9,920 t U � USEC Delivers � 885 t EUP (Avg. 4.5%) to Customers Containing: • 5,140 t SWU @ 0.34% • 9,040 t U to Tenex � USEC Retains 880 t U to Re-Sell

EUROPEAN TAILS UPGRADING � European Enrichers “Underfeeding” � Stripping Tails In Russia Same as Underfeeding � Use 1.2 – 1.6 Million Russian SWU � Receive Back About 2,600 t U � Savings on Tails Disposal � Russia Utilizes Residual Tails � HEU Blend-Stock � Other Uses

RUSSIAN HEU & BLEND-STOCK � EUP From HEU Contains 9,000 t U (@0.30%) � Nearly 30% of U From Blend-Stock � U.S. Quota Sales 4,600 t U in 2003 � Russia Takes 2,580 t U/Yr. For Blend-Stock � Remainder Put In “Monitored Inventory” (Russia and U.S.) � HEU Blend-Stock � Russia Actually Uses Tails Not Natural U � 6,000 Tonnes Tails (0.30% Stripped to 0.10%) � 4.3 Million Russian SWU

CONCLUSIONS I � SWU Is Already Used to Meet U Demand � Low Cost SWU Competes With Uranium Production � 10 to 12 Million SWU Used � If Used Efficiently, Could Yield 15,000 tU @ World Avg. Tails of 0.23% � But Not Used Efficiently � Net Change in U Demand 7,000 – 9,000 tU � Effective World Tails Assay 0.28 – 0.29%

CONCLUSIONS II � Utility Nomination of Lower Transaction Tails � Would Not Change U Supply/Demand � Enrichers Already At Lower Effective Tails • USEC Underfeed • European Effective Underfeed via Russia • Russian Tails Stripping � Uranium Already In Market via Enrichers � Enricher “Recycle” Already Reduces Demand on Primary Uranium Production

OUTLOOK I � Russian SWU Utilization to be Rationalized � Russia Rich in SWU, Poor in Uranium � Russian Conventional SWU Use Growing � Higher Costs for New SWU Capacity � Ultimately, Better Integration With World Market • Conventional Uranium Enrichment Exports • Less Tails Stripping • Import Uranium

OUTLOOK II � No Extension or Addition to HEU Deal � Russia Already Using HEU for Domestic Needs � Hold For Strategic Defense and Fuel Purposes � Tails Stripping for Blend-Stock Ends 2013—Frees 4.3 Million Russian SWU � Reduces Supply to Western Markets by 5.5 Million SWU � Reduces World Uranium Supply by 9,000 Tonnes