Russia Looks Beyond U.S. to Conquer Uranium Markets
Source: Reuters, Robin Paxton (12/10/09)
"Russia has expressed no desire to refresh the 'Megatons to Megawatts' program. . ."
Now Russia hopes its Cold War arsenal, twinned with fast-growing uranium mines and enrichment capacity, will also be powering China, India and other booming economies when a 20-year nuclear fuel pact with the United States expires in 2013.
Russia has expressed no desire to refresh the 'Megatons to Megawatts' program, under which it will recycle the equivalent of 20,000 nuclear warheads and create enough uranium to power the entire United States for two years.
Instead, the Kremlin is pursuing lucrative deals to supply fuel directly to power firms in the U.S. market, home to more than a quarter of the world's nuclear power generating capacity.
Russian supplies from old warheads are currently key in the global uranium market, accounting for 13% of world supply, helping fill a gap from mined output.
Analysts expect recycled Russian supplies to continue to flow after the U.S. deal expires in 2013, but falling to around two-thirds of present levels.
"Russia wants to expand its nuclear presence all over the world," said Marina Alexeyenkova, analyst at investment bank Renaissance Capital. "The economics of the 20-year contract to reprocess weapon-grade uranium are not so attractive to Russia."
Russia, holder of a tenth of the world's uranium reserves, is positioning itself as a major player in meeting growing demand from the nuclear power industry. The country already has a 15% share of the global reactor-building market.
The expiry of the post-Cold War partnership with the United States, which is expected to earn Russia more than $8 billion, has fuelled concerns about a looming supply shortfall.
But Russia has not shunned the U.S. market and its 104 reactors. Instead, it has this year signed a succession of deals to supply fuel directly to U.S. utilities.