U.S. Energy Dept cancels surplus uranium transfers

WASHINGTON (Reuters) – The U.S. Energy Department has canceled plans to put into the market during 2011 extra government-owned surplus uranium supplies, Energy Secretary Steven Chu told Congress on Thursday, but the uranium transfers will continue for this year.

The department had planned to transfer next year up to 1,125 tonnes, or about 2.48 million lbs, of its surplus uranium a year to raise money to pay for the cleanup of the Portsmouth uranium enrichment plant in Ohio.

The uranium would have been transferred to USEC Inc (USU.N). The company is one of the biggest suppliers of low enriched uranium that is used as fuel for nuclear power plants.

However, Chu told the Senate Energy and Natural Resources Committee that the department did not want to put too much uranium in the market because it would go against an earlier agreement with uranium producers.

Not only would business be taken away from domestic uranium producers, but the additional government supplies in the market could have depressed prices, making it difficult for producers to expand operations.

Reuters