WASHINGTON, DC, June 19, 2002 (ENS) - The U.S. Department of Energy signed an agreement with a publicly traded corporation, the United States Enrichment Corporation, late yesterday that mandates the company to take delivery of highly enriched uranium derived from Russian nuclear weapons.

The uranium delivered to the U.S. comes from dismantled Russian nuclear weapons, reducing the inventory of highly enriched uranium in Russia under the Megatons to Megawatts program. The United States Enrichment Corporation (USEC) purchases the nuclear fuel from Russia and sells it to customers to power their electric generating stations.

Energy Secretary Spencer Abraham (Photo courtesy DOE)

Last month, Abraham and Russian Atomic Energy Minister Alexander Rumyantsev worked out an agreement to accomplish nonproliferation work in Russia two years ahead of schedule.

Abraham said, "With this agreement America accomplishes two very important goals, ensuring our domestic capacity to produce fuel for our commercial nuclear reactors, and meeting important nuclear nonproliferation goals by accepting enriched uranium from Russia."

USEC, headquartered in Bethesda, Maryland, is a supplier of enriched uranium fuel for commercial nuclear power plants with revenues last year of more than $1.1 billion. USEC operates the only uranium enrichment facility in the United States - a gaseous diffusion plant in Paducah, Kentucky. USEC also operates sampling, transfer and shipping facilities near Portsmouth, Ohio.

In the early 1990s, USEC was created as a government corporation with the mission to restructure the government's uranium enrichment operation and to prepare it for sale to the private sector. The privatization of USEC Inc. was completed on July 28, 1998.

Portsmouth Gaseous Diffusion Plan in Ohio (Photo courtesy DOE)

Two years ago, USEC entered into an agreement with the DOE to resurrect the centrifuge design. After spending $7 million USEC says it has improved the centrifuge design and intends to demonstrate its performance, reliability and cost projections.

Under the agreement, USEC will deploy a new advanced technology enrichment plant using the cnetrifuge at Portsmouth by 2010, or at Paducah by 2011.

USEC has also agreed to maintain production of enriched uranium at its Paducah Gaseous Diffusion Plant at a level of 3.5 million SWU - the standard unit of measure for enriched uranium fuel - per year. This production level can be reduced only after USEC is within six months of completing deployments of the new centrifuge enrichment technology with a productive capacity of 3.5 million SWU.

Finally, under the agreement the government confirmed its responsibility for remediating or replacing any uranium that was transferred by DOE prior to USEC’s privatization that may be mixed with technetium.

USEC will operate a facility at the Portsmouth plant for 15 months to clean up a portion of its uranium inventory that is potentially contaminated by technetium. In return, DOE will take three years worth of depleted uranium from USEC’s production over a four year period, the company said Tuesday.

In a related development, the governments of the United States and Russia have approved a new market based mechanism for determining the price paid to Russia for the reactor fuel derived from highly enriched uranium (HEU), State Department spokesman Richard Boucher announced today.

The new market based pricing mechanism "will obviate the need for periodic renegotiation to reflect changing market conditions," Boucher said.

The pricing agreement covers the remaining 12 years of the Megatons to Megawatts national security program. The new flexible pricing terms will go into effect in January 2003.

William Timbers, USEC president and CEO (Photo courtesy USEC)

The 1993 HEU Agreement calls for Russia to convert 500 tons of highly enriched uranium from dismantled nuclear weapons into reactor fuel for use in commercial nuclear reactors in the United States. Shipments began in 1995 and will continue through 2013.

To date more than 150 tons of HEU from the Russian nuclear weapons program has been converted to peaceful uses under this program.