Inside the US' $2.7bn Bid for Uranium Self-Sufficiency

The US Department of Energy's announcement of US$2.7bn in awards to bolster domestic uranium enrichment capacity over the next decade could mark a pivotal shift for the global mining sector.

As the United States moves to reduce its reliance on Russian supply, the implications for uranium extraction operations and the broader mining industry supply chain are significant.

The awards, distributed among American Centrifuge Operating, General Matter and Orano Federal Services, aim to establish enrichment services for low-enriched uranium and high-assay low-enriched uranium (HALEU), required for both existing nuclear power plants and emerging smaller modular reactors.

Addressing the enrichment bottleneck

The US$2.7bn investment could represent a transformative development for the mining industry as it targets what has been identified as the single biggest bottleneck in the Western nuclear supply chain. While mining operations focus on extracting uranium ore from the ground, this upstream activity delivers limited value unless the material can be processed through enrichment facilities.

By funding domestic enrichment infrastructure, the United States is essentially constructing the refineries needed to convert raw mined products into usable nuclear fuel. The parallel to oil and gas infrastructure is clear: without refineries, crude oil extraction holds minimal value to end users.

For years, uranium mining companies operating in the United States faced a challenging situation where extracted uranium had limited domestic processing options.

The establishment of domestic enrichment infrastructure creates a guaranteed local customer for US and allied mining operations, including companies like Cameco and Energy Fuels, clearing the midstream bottleneck that has constrained production expansion.

Filling the Russian supply gap

Russia currently controls nearly 40% of global uranium enrichment capacity and maintains a virtual monopoly on HALEU production, the advanced fuel required for next-generation reactor technology. This dominance has created strategic vulnerabilities for Western nations seeking energy independence and security.

Secretary of Energy Chris Wright says: "Today's awards show that this Administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow."

As the United States proceeds with legislation to ban uranium shipments from Russia fully by 2028, a substantial supply gap is emerging in the market.

The Department of Energy awarded American Centrifuge Operating, a subsidiary of Centrus Energy, and General Matter, backed by tech billionaire Peter Thiel, with US$900m each to develop domestic HALEU enrichment capacity.

Orano Federal Services received US$900m to expand domestic low-enrichment uranium production. Additionally, the Energy Department awarded US$28m to Global Laser Enrichment, part-owned by Canadian uranium company Cameco, to advance next-generation uranium enrichment technology.

De-risking mining sector investment

The funding could signal to mining companies that the United States is actively de-risking the market, potentially justifying the substantial capital expenditure required to open new extraction facilities. With 10-year contracts providing long-term price signals, junior mining companies may find it easier to raise capital when government investment is directed toward infrastructure supporting their products.

Russia is currently the only country producing HALEU, uranium enriched to between 5% and 20%, in commercial volumes. Most next-generation Small Modular Reactors cannot operate on standard fuel and require HALEU. Without HALEU enrichment capacity, deployment of these reactors faces significant obstacles.

The funding could unlock future industry growth by ensuring infrastructure exists to support new reactors, which are expected to increase uranium demand substantially by the 2030s. Uranium prices are hovering in the US$80 to US$100 per pound range, with this funding potentially reinforcing market conditions that could make new mining projects economically viable.