Centrus Energy Corp. (Centrus) operates as a supplier of nuclear fuel components and services for the nuclear power industry, which provides a reliable source of carbon-free energy and provides enrichment and technical services for public and private customers.
Centrus operates two business segments: LEU, which supplies various components of nuclear fuel to commercial customers from the company’s global network of suppliers; and Technical Solutions, which provides advanced engineering, design,...
Centrus Energy Corp. (Centrus) operates as a supplier of nuclear fuel components and services for the nuclear power industry, which provides a reliable source of carbon-free energy and provides enrichment and technical services for public and private customers.
Centrus operates two business segments: LEU, which supplies various components of nuclear fuel to commercial customers from the company’s global network of suppliers; and Technical Solutions, which provides advanced engineering, design, and manufacturing services to government and private sector customers and is deploying uranium enrichment and other capabilities necessary for the production of advanced nuclear fuel to power existing and next-generation reactors around the world.
The company’s LEU segment provides most of its revenue and involves the sale of enriched uranium, the fissile component of nuclear fuel, primarily to utilities that operate commercial nuclear power plants. The majority of these sales are for the enrichment component of LEU, which is measured in SWU. Centrus also sells natural uranium hexafluoride (the raw material needed to produce LEU) and occasionally sells uranium concentrates, uranium conversion, or LEU with the natural uranium hexafluoride and SWU components combined into one sale.
LEU is a critical component in the production of nuclear fuel for reactors that produce electricity. The company supplies LEU and its components to both domestic and international utilities for use in nuclear reactors worldwide. The company provides LEU from multiple sources, including its inventory, medium- and long-term supply contracts, and spot purchases. As a long-term supplier of LEU to the company’s customers, its intention is to provide value through the reliability and diversity of the company’s supply sources.
The company’s global Order Book includes long-term sales contracts with major utilities through 2030.
The company’s Technical Solutions segment is focused on uranium enrichment for the nuclear industry and the U.S. government and advanced manufacturing, engineering and other technical services to government and private sector customers. Under a contract with the DOE, the company’s Technical Solutions segment is deploying uranium enrichment and other capabilities necessary for the production of advanced nuclear fuel to meet the evolving needs of the global nuclear industry and the U.S. government. The company is also leveraging its unique technical expertise, operational experience, and specialized facilities to expand and diversify the company’s business beyond uranium enrichment, offering new services to existing and new customers in complementary markets.
The company’s Technical Solutions segment is dedicated to the restoration of America’s domestic uranium enrichment capability in order for the company to play a critical role in meeting the U.S. national security and energy security requirements and advancing America’s nonproliferation, energy, and climate objectives. The company’s Technical Solutions segment is also focused on repairing broken and vulnerable supply chains, providing clean energy jobs, and supporting the communities in which the company operates. The company’s intention is to deliver major components of the next-generation nuclear fuels that will power the future of nuclear energy as it provides reliable carbon-free power around the world.
The United States has not had domestic uranium enrichment capability suitable to meet the U.S. national security requirements since the Paducah GDP shut down in 2013. DOE continues to draw down its finite stockpile of Cold War-era enriched uranium but is expected to need a new source of the U.S.-origin enrichment in the future. Longstanding U.S. policy and binding nonproliferation agreements prohibit the use of foreign-origin enrichment technology for U.S. national security missions. The company’s AC100M centrifuge is the only deployment-ready U.S. uranium enrichment technology that can meet these national security requirements.
Centrus is pioneering the U.S. production of HALEU, enabling the deployment of a new generation of HALEU-fueled reactors to meet the world’s growing need for carbon-free power. On October 11, 2023, the company began enrichment operations at its HALEU production facility in Piketon, Ohio under its contract with DOE. HALEU is a high-performance nuclear fuel component, which will be required by a number of advanced reactor and fuel designs that are under development for commercial and government uses. While existing reactors typically operate on LEU with the U235 concentration below 5%, HALEU is further enriched so that the U235 concentration is between 5% and 20%.
As the only company with a license from the NRC actively enriching up to 20% U235 assay HALEU and that is operating a small scaled HALEU production facility, Centrus is uniquely positioned to fill a critical gap in the supply chain and facilitate the deployment of these promising next-generation reactors.
Centrus is exploring the opportunity to deploy LEU enrichment alongside HALEU enrichment to meet a range of commercial and U.S. government requirements, which would bring cost synergies while increasing revenue opportunities. The company’s ability to deploy LEU and/or HALEU enrichment, and the timing, sequencing, and scale of those capabilities, is subject to the task orders (and their funding levels) DOE is expected to issue under the company’s LEU and HALEU Production Contracts.
Under the HALEU Demonstration Contract signed in 2019, Centrus entered into an agreement with the DOE to construct a cascade of 16 AC100M centrifuges in Piketon, Ohio to demonstrate HALEU production.
Phase 2 of the contract includes continued operations and maintenance and production for a full year at an annual production rate of 900 kilograms of HALEU UF6. DOE owns the HALEU produced from the demonstration cascade. Under Phase 2, Centrus is being compensated on a cost-plus-incentive-fee basis. DOE has increased the Phase 2 contract value and extended the Phase 2 period of performance to June 30, 2025. Pursuant to an amendment to the company’s lease for the Piketon facility, the DOE has assumed all D&D liabilities arising out of the HALEU Operation Contract.
Under the HALEU Operation Contract, DOE is contractually obligated to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges created difficulties for DOE in securing enough 5B Cylinders for the entire production year under Phase 2. To support the DOE in mitigating the risk of delays in delivery of 5B Cylinders, the company received technical direction and a contract modification from the DOE to allow it to procure compliant 5B Cylinders and components from a third party but the shortage of 5B Cylinders slowed the production rate which has since been mitigated. The contractual obligation to furnish compliant 5B Cylinders under the HALEU Operation Contract continues to rest with the DOE. During time periods when 5B Cylinders were insufficient, the company was able to continue operations of the cascade, but did not produce HALEU as it did not have cylinders to store the enriched uranium.
The DOE continues to pursue the availability of HALEU for the ARDP and for the advanced reactor market and the availability of domestically enriched uranium in a quantity that would be sufficient to address a supply disruption and gaps in domestic production and enrichment. The DOE issued separate RFPs for the deconversion of HALEU, the production of HALEU and domestic production of LEU. The DOE awarded multiple IDIQ contracts to the successful bidders (including ACO), after which the awardees will compete for individual task orders DOE is expected to issue. The funding under all three solicitations is partly through the Inflation Reduction Act of 2022 (IRA).
On October 4, 2024, DOE selected ACO and five other awardees under the November 28, 2023 solicitation aimed at HALEU deconversion, a subsequent step in the HALEU production process.
On November 6, 2024, DOE issued requests for task order proposals under the HALEU Deconversion Contract and the HALEU Enrichment Contracts, respectively. DOE contemplates issuing the task orders on a time-and-material basis with a two year period of performance for the purpose of describing the technical approach and price in a optimization study to support DOE in establishing the commercial production of HALEU and commercial deconversion of HALEU, respectively. On January 9, 2025, the company submitted the company’s proposals in response to these requests for task order proposals.
Meanwhile, on November 20, 2024, the company announced the resumption of centrifuge manufacturing activities and expansion of the manufacturing capacity at the company’s facility in Oak Ridge, Tennessee.
On October 18, 2024, the Company submitted an application for a clean energy manufacturing and recycling project associated with re-equipping the company’s manufacturing property at the company’s manufacturing facility in Oak Ridge. This will recreate a viable enrichment supply chain and allow ACO to manufacture centrifuge parts to be used in centrifuge machines to enrich uranium. On January 10, 2025, the Company was informed that the IRS has granted its request.
Low Enriched Uranium
LEU consists of two components: SWU and natural uranium hexafluoride. Revenue from the company’s LEU segment is derived primarily from sales of the SWU component of LEU; sales of natural uranium hexafluoride, uranium concentrates, or uranium conversion; and sales of enriched uranium product that include both the natural uranium hexafluoride and SWU components of LEU.
The company’s LEU segment accounted for approximately 84% of its total revenue for the year ended December 31, 2023. The majority of the company’s customers are domestic and international utilities that operate nuclear power plants. The company’s agreements with electric utilities are primarily medium-term and long-term, fixed-commitment contracts. Under these contracts, customers are obligated to purchase a specified quantity of the SWU component of LEU from the company. Contracts where the company sells both the SWU and natural uranium hexafluoride components of LEU to utilities or where the company sells natural uranium hexafluoride to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts.
Uranium and Enrichment
Uranium is a naturally occurring element and is mined from deposits located in Kazakhstan, Canada, Australia, and several other countries, including the United States. In its natural state, uranium is principally consisted of two isotopes: U235 and U238. The concentration of U235 in natural uranium is only 0.711% by weight. Uranium enrichment is the process by which the concentration of U235 is increased. Most commercial nuclear power reactors require LEU fuel with a U235 concentration greater than natural uranium of up to 5% by weight. Future reactor designs under development will likely require higher U235 concentration levels of up to 20%.
SWU is a standard unit of measurement that represents the effort required to separate natural uranium between enriched uranium, having a higher percentage of U235, and depleted uranium, having a lower percentage of U235. The SWU contained in LEU is calculated using an industry standard formula based on the physics of enrichment. The amount of enrichment deemed to be contained in LEU under this formula is commonly referred to as its SWU component and the quantity of natural uranium hexafluoride deemed to be contained in LEU under this formula is referred to as its uranium or ‘feed’ component.
While in some cases customers purchase both the SWU and uranium components of LEU from the company, utility customers typically provide the natural uranium hexafluoride to the company as part of their enrichment contracts and in exchange the company delivers LEU to these customers and charge for the SWU component. Title to natural uranium hexafluoride provided by customers generally remains with the customer until Centrus delivers the LEU, at which time title to the LEU is transferred to the customer, and Centrus takes title to the natural uranium hexafluoride.
Suppliers
The company has a diverse base of supply that includes existing inventory of LEU; long-term contracts with enrichment producers; purchases and loans from secondary sources, including fabricators and utility operators of nuclear power plants that have excess inventory; and spot purchases of SWU, uranium, and LEU.
The company intends to continue to further diversify this base of supply and take advantage of opportunities to obtain additional short and long-term supplies of LEU. The company’s largest supplier of SWU is TENEX followed by the French government-owned company, Orano.
Under the TENEX Supply Contract, the company purchases SWU contained in LEU, and the company delivers natural uranium hexafluoride to TENEX for the LEU’s uranium component. The TENEX Supply Contract extends through 2028. The company typically pays for the SWU contained in the LEU and supplies natural uranium to TENEX for the natural uranium component. The LEU that the company obtains from TENEX under the TENEX Supply Contract is subject to quotas and other restrictions under the RSA between the United States and the Russian Federation, which governs the exports of Russian uranium products to the United States. These quotas allow the company to supply Russian LEU to its U.S. customers through 2028. The terms of the RSA, as extended, were adopted into law by the U.S. Congress in the Consolidated Appropriations Act, 2021.
Centrus will need to make additional sales to place all the Russian LEU required to meet the company’s SWU purchase obligations to TENEX. Although the RSA quotas cover most of the LEU that the company must order to fulfill its purchase obligations under the TENEX Supply Contract, the company expects that a small portion of the Russian LEU that the company orders during the term of the TENEX Supply Contract will need to be delivered to customers that will use it in non-U.S. reactors.
Due to restrictions imposed by Canada on the ability of Canadian persons and entities to provide ocean transportation services to Russia, a permit is required for the company’s shipper, a Canadian company, to transport the LEU that the company procures under the TENEX Supply Contract to the United States. A Canadian permit issued to the company’s shipper was recently extended to early July 2024, but for so long as the Canadian sanctions remain in place, the shipper will require further extensions of the permit for the company to continue to use the shipper beyond July 2024.
Any proposal for a U.S. ban on LEU imports represents a significant risk to the company’s business because the TENEX Supply Contract is the major source of supply that the company relies upon today to meet its delivery obligations and to earn the revenues needed to fund the company’s advanced technology work. Through 2027, well over one-half of the LEU that the company expects to deliver to customers is anticipated to come from material supplied to the company under the TENEX Supply Contract. While the company has other sources, they are not sufficient to replace the TENEX supply.
In addition to limitations targeted specifically at imports of LEU, the expanding sanctions imposed by the United States and foreign governments on the mechanisms used to make payments to Russia and to obtain services, including transportation have increased the risk that implementation of the TENEX Supply Contract may be disrupted in the future.
The company also has an agreement with Orano for the long-term supply of SWU contained in LEU, with deliveries that commenced in 2023. Under the Orano Supply Agreement, the company purchases SWU contained in LEU received from Orano, and then delivers natural uranium to Orano for the natural uranium feed component of LEU. The company recently exercised its option to extend the six-year purchase period for an additional two years, electing to take the additional supply in 2029 and 2030.
The company procures LEU from other sources under short-term and long-term contracts and has inventories available that diversify the company’s supply portfolio and provide flexibility to help the company meets the needs of its customers. The company also has agreements to borrow SWU that the company can use to optimize its purchases and deliveries over time.
Centrus’ SWU purchases under the company’s long-term contract with Orano reflect the lower market prices that prevailed in 2018, when Centrus signed the long-term contract with Orano.
Technical Solutions
The company’s Technical Solutions segment reflects its technical, manufacturing, engineering, and operations services offered to public and private sector customers, including the American Centrifuge engineering, procurement, construction, manufacturing, and operations services being performed under the HALEU Operation Contract. Subject to the availability of sufficient funding and offtake commitments, the company’s intention is to expand its uranium enrichment capacity to meet the full range of the U.S. government and commercial requirements for enriched uranium. With the company’s government and private sector customers, the company seeks to leverage its domestic enrichment experience, as well as the company’s engineering know-how and precision manufacturing facility to assist customers with a range of engineering, design and advanced manufacturing projects, including the production of fuel for next-generation nuclear reactors and the development of related facilities. The company continues to invest in advanced technology because of the potential for future growth into new areas of business for the company, while also preserving its unique workforce at the company’s Technology and Manufacturing Center in Oak Ridge, Tennessee, and the company’s production facility near Piketon, Ohio.
Government Contracting
On October 31, 2019, the company signed the cost-share HALEU Demonstration Contract with the DOE to deploy a cascade of centrifuges to demonstrate production of HALEU for advanced reactors. The company has significantly invested in advanced technology because of the potential for future growth into new areas of business for the company, while also preserving its unique workforce at the company’s technology and manufacturing center in Oak Ridge, Tennessee, and the company’s production facility near Piketon, Ohio. Under the 2019 HALEU Demonstration Contract, the company constructed and installed 16 centrifuges for eventual site operations and HALEU production. Additionally, the company designed, procured, and installed most of the necessary support systems. Centrus is the only company with an NRC license to enrich uranium up to the 20% U-235 concentration that is contained in HALEU and is the only company known to the company to produce HALEU outside of Russia.
The company began work on the HALEU Operation Contract on December 1, 2022. On November 7, 2023, the company announced that it made its first delivery of HALEU to the DOE, completing Phase 1 by successfully demonstrating its HALEU production process.
During November 2023, the company transitioned to Phase 2 of the HALEU Operation Contract. The company has filed a license amendment to increase its possession limit above 900 kilograms of HALEU UF6 and expects to receive NRC approval prior to reaching its current possession limit.
Commercial Contracting
Centrus has a task order type services agreement with X-energy to provide services for detailed design of the TRISO fuel fabrication facility and various support services for establishing their TRISO Research and Development Center. X-energy is funded under the current DOE cooperative agreement titled ARDP. Centrus performed services pursuant to specific task orders, the last of which ended in March 2023. The services agreement expires on December 31, 2027, unless earlier terminated at the discretion of X-energy, but there are no active task orders pending.
DOE Facilities
The company produced LEU through 2001 at the former Portsmouth GDP in Piketon, Ohio and through 2013 at the former Paducah GDP in Paducah, Kentucky, both of which facilities the company had leased from the DOE. The USEC Privatization Act and the terms of the company’s leases of the plants provide that DOE remains responsible for the D&D of the gaseous diffusion plants. Further, the DOE continued operations, as well as cleanup activities, both during and subsequent, to the company’s operations at the facilities.
The company leases facilities and related personal property near Piketon from the DOE. In connection with a letter agreement that preceded the HALEU Demonstration Contract, the DOE and Centrus amended the lease agreement, which was scheduled to expire by its terms on June 30, 2019. The lease was extended until May 31, 2022. In September 2021, the company and the DOE renewed and extended the lease until December 31, 2025. On November 30, 2022, the lease was further amended to ensure all D&D liabilities created under the HALEU Operation Contract reside with the DOE.
Competition
The company competes with major producers of LEU, all of which are wholly or substantially owned by governments: Orano Cycle (France); Russian State Atomic Energy Corporation/ TENEX, Joint-Stock Company (Russia); Urenco, Limited (the Netherlands, the United Kingdom and two German utilities); and China Nuclear Energy Industry Corporation (China).
History
The company, a Delaware corporation, was founded in 1998. It was incorporated in 1998. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in 2014.
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