Canada could get caught in cross-fire of US uranium investigation

Canada could get caught in cross-fire of US uranium investigation

"The Department of Commerce's Bureau of Industry and Security will conduct a thorough, fair, and transparent review to determine whether uranium imports threaten to impair national security".

US uranium producers Energy Fuels Inc. and Ur-Energy Inc. filed a petition in January requesting an investigation under section 232 of the 1962 Trade Expansion Act - the same provision used to justify tariffs of 25 per cent on steel and 10 per cent on aluminum imports from countries including Canada, Mexico and Europe.

Ross said the probe would canvass the entire usa uranium sector from mining through enrichment and defense and industrial consumption.

"Our production of uranium necessary for military and electric power has dropped from 49 percent of our consumption to 5 percent", Ross said, suggesting that to be so overwhelmingly dependent on imports could jeopardize US security.

The U.S. probed uranium imports under the same legal provision in 1989, but found that foreign shipments didn't threaten American national security.

The uranium inquiry is the latest of several trade-related steps the Trump administration has taken with an eye toward imposing stiff tariffs on imports.

Cameco President and CEO Tim Gitzel said, "If the issue in question is the over-reliance of the United States on uranium supplied by state-controlled enterprises from countries not aligned with American policy interests, this clearly does not apply to Canada or Cameco". US uranium miners supply less than 5 per cent of domestic consumption for the metal and say it's increasingly hard to compete with state-subsidized companies overseas.

USA uranium producers gained on Wednesday, with Energy Fuels Inc. surging as much as 14 per cent and Uranium Energy Corp. climbing 9.1 per cent, while Canadian producer Cameco Corp. fell 1.5 per cent, underscoring the divergence in sentiment.

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"Increasing levels of state-subsidized nuclear fuel are expected to be imported from Russian Federation and China in the coming years, which would likely further displace USA uranium production", the mining companies said in their petition.

In 2016, over 80 percent of the uranium used in U.S. nuclear power plants came from Canada, Kazakhstan, Australia and Russian Federation, according to the U.S. Energy Information Administration.

Prices have since bumped up to about $23 a pound following production cuts at leading producers KazAtomProm in Kazakhstan and Cameco Corp.in Canada.

Nuclear power provides 20 percent of the United States' electricity, a fraction that is set to wane in the coming years: Since 2013, six of the nation's nuclear reactors have shut down permanently and 11 others are scheduled to be retired by 2025.

Uranium is used by nuclear power plants and for the production of nuclear weapons as well as other defense-related purposes. "Today, U.S. uranium production has dropped to only five percent of U.S. requirements". We encourage steps that will help to protect the nation's uranium mining industry - the loss of domestic mining would have a significant detrimental impact on USA strategic interests.

The U.S. Commerce Department said the two petitioners that account for more than half of all uranium mined in the U.S., have laid off more than half their workforce over the last two years and operate at nine and 13 per cent of their respective capacity.

The new probe is the fourth launched by the Trump administration under Section 232 of the Trade Expansion Act of 1962, previously a seldom-invoked Cold War-era law.

The companies that requested the trade case asked that the Commerce Department limit imports so that 25 percent of the uranium used in the United States would be produced domestically. According to the government agency, in 2016 nearly 90% of the uranium used at the U.S. nuclear power plants was supplied from overseas.

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