ENERGY FUELS RESOURCES CORP: Ur-Energy and Energy Fuels Announce U.S. Department of Commerce Has Initiated Investigation into Effects of Uranium Imports 
on U.S. National Security

Source: Energy Fuels Resources Corp

Energy Fuels Resources Corp issued the following announcement on July 18.

Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels”) and Ur-Energy Inc. (NYSE American: URG; TSX: URE) (“Ur-Energy”) are pleased to announce that on July 18, 2018, the U.S. Department of Commerce (“DOC”) initiated an investigation into the effects of uranium imports on U.S. national security. This investigation was requested by Energy Fuels and Ur-Energy in their Petition for Relief Under Section 232 of the Trade Expansion Act of 1962 (the “Petition”), which was filed jointly by the companies on January 16, 2018.

The Secretary of Commerce (the “Secretary”) now has 270 days to conduct the investigation and submit a report to the President of the United States containing the Secretary’s findings and proposed remedy, if any. Following receipt of the Secretary’s report, the President then has up to 90 days to act on the Secretary’s recommendations and, if necessary, take action to “adjust the imports of an article and its derivatives” and/or pursue other lawful, non-trade-related actions necessary to address the import threat.

Energy Fuels and Ur-Energy requested that the DOC conduct its investigation due to the following factors:

  • In 2017, U.S. uranium production fell to near historic lows due, in large part, to uranium and nuclear fuel imported from state-subsidized foreign entities; 2018 domestic production is likely to be even lower, with Q1-2018 production being 50 percent lower than Q1-2017.
  • In 2017, imports of uranium from state-owned and state-subsidized enterprises in Russia, Kazakhstan, and Uzbekistan fulfilled about one-third of U.S. demand, while purchases of U.S. uranium by owners of U.S. nuclear reactors dropped by 46 percent. In 2018, domestic producers are projected to fulfill only about 2 percent of total U.S. commercial demand.
  • Increasing levels of state-subsidized nuclear fuel are expected to be imported from Russia and China in the coming years, which would likely further displace U.S. uranium production. If Russia and its allies take control of this critical fuel, the threat to U.S. national and energy security would be incalculable.   
  • While U.S. producers can fairly compete with foreign production on a level playing field, it is difficult for them to compete with heavily subsidized foreign production. Foreign policies of other nations should not be permitted to jeopardize this crucial U.S. industry.
  • A sustainable domestic uranium mining industry is vital to U.S. national security because it supplies uranium for essential defense needs and fuel for nuclear power plants that are a key component of the nation’s critical clean energy infrastructure.
  • Ur-Energy and Energy Fuels, both headquartered in Denver, Colorado, are the two main U.S. uranium producers, together mining more than half of all U.S. uranium in 2017.
  • In the Petition, the companies proposed two complementary remedies: (1) a quota that limits imports of uranium into the U.S., effectively reserving 25 percent of the U.S. market for domestic uranium production, and (2) a requirement for U.S. federal utilities and agencies to buy U.S. uranium in accordance with the President’s Buy American Policy. The companies’ proposed remedies are expected to result in U.S. utilities purchasing approximately 12 million pounds of uranium per year from U.S. production.
  • The proposed remedies are expected to restore a sustainable U.S. uranium mining industry, bolster national defense, and support energy security through reduced reliance on state-subsidized uranium and nuclear fuel imports from nations that compete with the U.S. for geopolitical influence and commercial advantage.
  • An econometric model prepared in connection with the Petition demonstrates that the effects of the proposed remedies on utilities and consumers are expected to be negligible.

Please refer to Energy Fuels’ and Ur-Energy’s press releases on January 16, 2018, for further information on the background and legal basis for the Petition. Additional information regarding the trade action can be found on the companies’ respective websites shown below. As with any governmental investigation, there can be no certainty of the outcome of the investigation or the recommendation of the Secretary, and therefore the outcome of this process is uncertain.

Original source can be found here.

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Energy Fuels Resources Corp

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