If passed into law, it would provide full funding for the Department of Energy to begin the funding required to stimulate growth in the domestic uranium mining industry.
The US has the world's largest reactor fleet of 94 commercial nuclear reactors producing about 20% of its electricity, yet its uranium mining industry is struggling. Production has been on a steady decline since the early 1980s as nuclear power plant operators replaced domestic uranium production with less expensive imports.
Under the uranium reserve programme, the DOE’s Office of Nuclear Energy would buy uranium directly from domestic mines and contract for uranium conversion services. The DOE has said that the new stockpile is expected to support the operation of at least two US uranium mines, reestablish active conversion capabilities, and ensure a backup supply of uranium for nuclear power operators in the event of a market disruption.
In February, the Trump administration’s proposed budget included $1.5bn over 10 years for the creation of a uranium reserve. In April a Nuclear Fuel Working Group report, requested by Mr Trump, concluded that the US must take “immediate and bold action” to strengthen the uranium industry and restore the viability of the entire front-end of the nuclear fuel cycle, including establishing a uranium reserve that will provide assurance of availability.
Shares of uranium companies began to rise after the announcement. “If passed, this bill will enable the DOE to begin the funding required to stimulate growth in the domestic uranium mining industry,” Uranium Energy chief executive officer Amir Adnani said.
According to Bloomberg, Eight Capital analyst David Talbot said the measure was “historic”, given that measure would provide full funding for the DOE to purchase 1.7m-1.9m lbs of uranium for the reserve.