DENVER, Jan. 16, 2018 /PRNewswire/ -- Ur-Energy
Inc. (NYSE American: URG; TSX: URE) ("Ur-Energy") and Energy
Fuels Inc. (NYSE American: UUUU; TSX: EFR) ("Energy
Fuels") today jointly submitted a Petition to the U.S.
Department of Commerce ("DOC") for Relief Under Section 232 of the
Trade Expansion Act of 1962 (as amended) from Imports of Uranium
Products that Threaten National Security (the "Petition").
- Imports of uranium from state-owned and state-subsidized
enterprises in Russia,
Kazakhstan, and Uzbekistan now fulfill nearly 40% of U.S.
demand, while domestic production fulfills less than 5%.
- Increasing levels of nuclear fuel are expected to be imported
from Russia and China in the coming years, which will compete
directly with U.S. uranium production.
- 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.
- A healthy uranium mining industry is vital to U.S. national
security, because it supplies fuel for nuclear power plants that
are a key component of the nation's critical energy infrastructure
and essential defense needs.
- Ur-Energy and Energy Fuels, both headquartered in Denver, Colorado, are the two main U.S.
uranium producers, together supplying more than half of all U.S.
uranium in 2017.
- Energy Fuels and Ur-Energy have filed a Section 232 Petition
requesting (1) the Department of Commerce to investigate the
effects of uranium imports on U.S. national security and (2) the
President to use his authority to adjust imports to ensure the
long-term viability of the U.S. uranium mining industry.
- Energy Fuels and Ur-Energy have proposed sensible remedies that
will support a viable domestic uranium mining industry with a
negligible impact on U.S. nuclear utilities.
Uranium is primarily used as the fuel for non-emitting,
zero-carbon nuclear energy, but also plays a key role in national
defense. According to the Nuclear Energy Institute, nuclear energy
provides about 20% of all electricity, and nearly 60% of the
carbon-free electricity, generated in the U.S. Uranium is also the
backbone of the U.S. nuclear deterrent and fuels ships and
submarines in the U.S. Navy. Despite uranium's critical role in
supporting clean electricity and national defense, imports of
cheap, foreign state-subsidized uranium have swelled in recent
years to the point that domestic suppliers currently provide less
than 5% of our nation's demand. As recently as 1980, U.S. producers
supplied nearly 100% of our domestic uranium needs, and in 1989 the
DOC initiated a Section 232 investigation at the request of the
U.S. Department of Energy ("DOE") because of concerns that uranium
imports exceeded 37.5% at that time. The problem is far worse
now.
In 2016, the combined uranium imports from three geopolitically
and commercially linked countries – Russia, Kazakhstan, and Uzbekistan – fulfilled nearly 40% of U.S.
requirements. While the U.S. does not import significant quantities
of uranium from China at this
time, China has significantly
grown their state-owned nuclear enterprises and announced that they
intend to penetrate the U.S. nuclear market with nuclear fuel that
will compete directly with U.S. uranium miners. Further, the
approaching expiration of the Russian Suspension Agreement will
remove existing limits on Russian uranium imports. This will create
additional pressure on U.S. uranium producers, as Russia has announced plans to increase its
U.S. market share after that agreement expires in 2020.
Today's extreme dependence is not a matter of foreign
competition legitimately underpricing domestic production. It is
the result of certain foreign state-subsidy policies that undermine
U.S. companies who could otherwise compete fairly on a global
basis.
The Petition filed today is a response to this threat to U.S.
energy and national security. The Petitioners urge Commerce
Secretary Ross and President Trump to act decisively to help
restore the long-term viability of the U.S. uranium mining
industry. Without a viable nuclear fuel cycle, the commercial and
nuclear capabilities of the U.S. will be diminished, and the nation
is likely to become 100% dependent on foreign parties that compete
with the U.S. for geopolitical influence and commercial advantage
to fuel a majority of our clean, baseload electricity. Further,
international treaties require that the uranium necessary for
defense programs be sourced from the U.S. Unless steps are taken
now to foster a healthy domestic uranium mining industry, the
defense stockpiles currently held by the DOE will be depleted, and
it is unlikely that domestic producers will have sufficient
capabilities to meet our defense needs in the future.
Legal Basis and Process
The Petition was filed by Energy Fuels and Ur-Energy pursuant to
the Trade Expansion Act of 1962, as amended (the "Act"), and 15
C.F.R. § 705.5. The Act was promulgated by Congress to protect
essential national security industries whose survival is threatened
by imports. As such, the Act authorizes the Secretary of Commerce
(the "Secretary") to conduct investigations to evaluate the effects
of imports of any item on the national security of the U.S. In the
Petition, Energy Fuels and Ur-Energy describe in detail how the
loss of a viable U.S. uranium mining industry would have a
significant detrimental impact on the national, energy, and
economic security of the U.S. and the ability of the country to
sustain an independent nuclear fuel cycle.
Once the DOC initiates an investigation, the Secretary has 270
days to prepare a report to the President. Following receipt of the
Secretary's report, the President then has 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 threat.
Benefits of Trade Remedies
The Petition seeks remedies which will set a quota to limit
imports of uranium into the U.S., effectively reserving 25% of the
U.S. nuclear market for U.S. uranium production. Additionally, the
Petition suggests implementation of a requirement for U.S. federal
utilities and agencies to buy U.S. uranium in accordance with the
President's Buy American Policy. These remedies are expected to
result in U.S. utilities purchasing approximately 12 million pounds
of uranium per year from U.S. production, based on recent data.
This would be expected to create a healthy U.S. uranium mining
industry, bolster national defense, and improve supply
diversification for U.S. utilities and their customers. Greater
diversification will lessen the exposure of the U.S. government,
U.S. utilities and their customers to the policies of nations like
Russia, Kazakhstan, and China. U.S. utilities and their customers will
also receive greater protection from supply shocks, price
increases, and other geopolitically motivated actions of foreign
state-controlled uranium producers. Likewise, a strong domestic
uranium mining industry will be able to reliably supply the
required domestic uranium that is critical to our national defense
programs. The U.S. government will provide support to a vital
national security industry, while maintaining a high degree of
competition that encourages innovation and lower prices. These
remedies will reduce dependence on imports that fuel clean energy,
and support reductions in air pollution and carbon emissions.
U.S. uranium producers will continue to compete with global
uranium producers, but on a more level playing field. U.S.
production will come from existing U.S. producers, from other U.S.
producers that are on standby as a result of low uranium prices,
and from new U.S. producers. Pricing for U.S. uranium would be
expected to increase through domestic competition to levels more
consistent with un-subsidized global costs of uranium production,
but not to a level that will have a significant impact on the
bottom lines of U.S. utilities or the rates their customers pay. An
econometric model included in the Petition demonstrates that the
average price impact to consumers will be negligible.
Additional information regarding the trade action, including the
full text of the Section 232 Petition, can be found on the
companies' respective websites shown below. 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.
About Ur-Energy: Ur-Energy is a U.S. uranium
mining company with corporate and operations offices in
Denver, Colorado and Casper, Wyoming. Ur-Energy operates the Lost
Creek in-situ recovery uranium facility in
south-central Wyoming. Ur-Energy
has produced, packaged and shipped more than two million pounds
from Lost Creek since the commencement of operations. Applications
are under review by various agencies to incorporate Ur-Energy's LC
East project area into the Lost Creek permits, and the company has
begun to submit applications for permits and licenses to construct
and operate its Shirley Basin Project. Ur-Energy is engaged in
uranium mining, recovery and processing activities in the
United States, including the
acquisition, exploration, development and operation of uranium
mineral properties. The primary trading market for Ur-Energy's
common shares is the NYSE American under the trading symbol "URG;"
Ur-Energy's common shares also trade on the Toronto Stock Exchange
under the trading symbol "URE." Ur-Energy's website is
www.ur-energy.com.
About Energy Fuels: Energy Fuels is a leading
integrated U.S. uranium mining company, supplying
U3O8 to major nuclear utilities. Its
corporate offices are in Denver,
Colorado, and all of its assets and employees are in the
western United States. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. The White Mesa Mill is the
only conventional uranium mill operating in the U.S. today and has
a licensed capacity of over 8 million pounds of
U3O8 per year. The Nichols Ranch Processing
Facility is an in-situ recovery production center with a licensed
capacity of 2 million pounds of U3O8 per
year. Alta Mesa is an in-situ
recovery production center with a licensed capacity of 1.5 million
pounds of U3O8 per year, which is currently
on care and maintenance due to low uranium prices. Energy Fuels
also has the largest uranium resource portfolio in the U.S. among
producers, and uranium mining projects located in a number of
Western U.S. states, including one producing in-situ recovery
project, mines on standby, and mineral properties in various stages
of permitting and development. Energy Fuels also produces vanadium
as a co-product of its uranium production from certain of its mines
on the Colorado Plateau, as market conditions warrant. The primary
trading market for Energy Fuels' common shares is the NYSE American
under the trading symbol "UUUU", and the Company's common shares
are also listed on the Toronto Stock Exchange under the trading
symbol "EFR". Energy Fuels' website is
www.energyfuels.com.
Cautionary Note Regarding Forward-Looking
Statements: Certain information contained in this news
release, including any information relating to: the expected
increases in foreign state-subsidized imports of uranium in coming
years; the expected further negative impacts of such imports on
U.S. uranium production and national security, including the
depletion of stockpiles held by the Department of Energy; the
potential of the U.S. to be unable to sustain an independent
nuclear fuel cycle and to become 100% dependent on foreign parties;
the outcome of the Department of Commerce Section 232
investigation, including whether or not the Secretary of Commerce
will make a recommendation to the President and the nature of the
recommendation; whether or not the President will act on the
recommendation and, if so, the nature of the action and remedy; the
expected benefits of the proposed remedies, including: the expected
impacts on U.S. production and the U.S. uranium mining industry,
the expected impacts on purchases of U.S. production by U.S.
utilities, the expected impacts on supply diversification and the
expected benefits of such diversification on domestic utilities and
national defense, the expected ability of the U.S. uranium mining
industry to reliably supply the required domestic uranium
production, the expected impact of the proposed remedy on improved
competition, innovation and lower prices, and the reduction of
dependence on imports; the expected impact on pricing for U.S.
uranium production and the negligible price impact on electricity
rates paid by consumers; and any other statements regarding Energy
Fuels' or Ur-Energy's future expectations, beliefs, goals or
prospects; constitute forward-looking information within the
meaning of applicable securities legislation (collectively,
"forward-looking statements"). All statements in this news release
that are not statements of historical fact (including statements
containing the words "expects", "does not expect", "plans",
"anticipates", "does not anticipate", "believes", "intends",
"estimates", "projects", "potential", "scheduled", "forecast",
"budget" and similar expressions) should be considered
forward-looking statements. All such forward-looking statements are
subject to important risk factors and uncertainties, many of which
are beyond Energy Fuels' and Ur-Energy's ability to control or
predict. A number of important factors could cause actual results
or events to differ materially from those indicated or implied by
such forward-looking statements, including without limitation
factors relating to: the expected increases in foreign
state-subsidized imports of uranium in coming years; the expected
further negative impacts of such imports on U.S. uranium production
and national security, including the depletion of stockpiles held
by the Department of Energy; the outcome of the Department of
Commerce Section 232 investigation, including whether or not the
Secretary of Commerce will make a recommendation to the President
and the nature of the recommendation; whether or not the President
will act on the recommendation and, if so, the nature of the action
and remedy; the expected benefits of the proposed remedies; the
expected impact on pricing for U.S. uranium production and the
negligible price impact on electricity rates paid by consumers; and
other risk factors as described in Energy Fuels' and Ur-Energy's
most recent annual reports on Form 10-K and quarterly financial
reports. Energy Fuels and Ur-Energy assume no obligation to update
the information in this communication, except as otherwise required
by law. Additional information identifying risks and uncertainties
is contained in Energy Fuels' and Ur-Energy's filings with the
various securities commissions which are available online at
www.sec.gov and www.sedar.com. Forward-looking statements are
provided for the purpose of providing information about the current
expectations, beliefs and plans of the management of Energy Fuels
and Ur-Energy relating to the future. Readers are cautioned that
such statements may not be appropriate for other purposes. Readers
are also cautioned not to place undue reliance on these
forward-looking statements, that speak only as of the date
hereof.
For Further Information, Please Contact:
Karen Heinold
kheinold@pcgpr.com
202.379.6358
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SOURCE Ur-Energy Inc.