The NFWG report outlines a comprehensive whole-of-government strategy of actions that could revive the capabilities of the uranium mining, milling and conversion industries in support of the entire US nuclear industry.
Peninsula managing director and chief executive officer Wayne Heili said that, when implemented, the recommendations would provide an immediate boost to US uranium producers, such as Peninsula, through supply agreements with the Department of Energy (DOE).
He said: “This looks to be a very good outcome for Peninsula and all US uranium producers.”
This encouraging development comes after Peninsula last week took a major step toward reopening and expanding its flagship Lance in-situ recovery (ISR) uranium project in Wyoming, US, following a key state government approval.
The Wyoming Department of Environmental Quality (WDEQ) approved the company’s Interim Restoration Report for the low pH field restoration demonstration, paving the way for Peninsula to develop new mining units using the low pH ISR method across the entire Ross Permit Area at the Lance Projects.
One key recommendation of the NFWG report is for direct purchases of uranium and nuclear fuel services to expand five-fold the American Assured Fuel Supply strategic inventory stockpile, including:
- Purchasing 17 to 19 million pounds over a 10-year period of US-produced U3O8 beginning no later than 2020,
- Purchasing conversion services beginning no later than 2022, and
- Purchasing US enrichment services beginning as soon as 2023.
Recommended Department of Energy Inventory Management Policy Changes include:
- Ending of DOE bartering of uranium and nuclear fuel components, and
- Evaluation of DOE inventory management practices.
Other recommendations of the report include:
• Streamlined regulatory reform and land access for uranium production,
• Supporting Department of Commerce efforts to extend the Russian Suspension Agreement by preventing dumping of uranium and nuclear fuel services and considering lowering the market share cap for Russian material imported into the US,
• Enabling the Nuclear Regulatory Commission to deny imports of nuclear fuel fabricated in Russia or China for national security purposes, and
• Supporting Federal Energy Regulation Commission (FERC) actions to encourage competition in energy wholesale markets.
Long-term industry health
Heili said the policy recommendations would contribute significantly to the long-term health of the industry.
He said: “As an initial step, the President’s FY2021 budget request for the DOE includes US$150 million per annum for the next 10 years for the purchase and development of a Uranium Reserve program.
“The DOE would purchase uranium from domestic uranium producers to develop a strategic stockpile that would be available for nuclear power operators in the event of a nuclear fuel market disruption.
“Based on the report recommendations, this would mean purchases of 17 to 19 million pounds of freshly mined uranium supplied by US producers, including Peninsula.”
In 2015 Peninsula commenced in-situ recovery operations at its 100%-owned Lance Projects in Wyoming, USA.
Following a positive feasibility study, the company intends changing from an alkaline ISR operation to a low pH ISR operation at the projects – which Heili said meant the company would be well placed to support the domestic supply recommended by the NFWG report.
He said: “Peninsula is in an excellent position to rapidly re-start production from our two fully-developed mine units at our flagship Lance Projects, using the low pH method, to supply these needs.”
Uranium price surges
Last week's Wyoming state approval concludes the final phase of the risk-informed, performance-based, stepwise implementation plan for low pH ISR designed by the WDEQ and the company.
Switching from an alkaline ISR to a low pH ISR operation is expected to significantly lower operating costs and align the Lance Project method of uranium recovery with the bulk of global ISR uranium producers.
Recent supply shocks have caused USD uranium price to surge almost 29% since the start of 2020, rising from US$24.85 to $32 per pound.
These developments have also seen Peninsula's share price move upwards from 8.2 cents on March 23 to 22 cents yesterday.