NUKEM buys and sells uranium in the form of U3O8, uranium hexafluoride and enriched uranium product (EUP), which are the “commoditized” forms of uranium used to make fuel for commercial nuclear reactors.

For many years the backbone of NUKEM’s uranium supply business has been its access to uranium produced in Uzbekistan and Kazakhstan, the principal uranium production centers of the former Soviet Union.

This uranium, in the form of U3O8 that meets ASTM specifications, is marketed to nuclear utilities world-wide, who typically have NUKEM arrange to deliver the product to “conversion” facilities. At these facilities, located  in France, the U.K., Canada or the U.S., U3O8 is converted to uranium hexafluoride (UF6), the next step up the value chain.

NUKEM is also a party to a long-term arrangement with the Russian entity TENEX (together with uranium super-majors AREVA and Cameco), for the sale of UF6 that is indirectly derived from dismantled Russian warheads.

NUKEM also purchases uranium from primary producers who have uncommitted supplies from time to time, as well as from other parties who may have uranium but are not in the business of marketing it (such as government agencies).

NUKEM sells its uranium in the spot market, which contemplates deliveries in one year or less, as well as in the long term market (delivery 2-7 years). Volumes range from ten to fifteen million pounds equivalent in a typical year, making NUKEM a major player in that venue, and one of the leading suppliers worldwide. Customers include the nuclear utilities but can also include producers managing temporary shortfalls as well as investors such as hedge funds, mutual funds or other intermediaries.

Increasingly, NUKEM has arranged for deliveries under longer term supply contracts, some extending out as far as 2022.

One of NUKEM’s small but important businesses involves the recovery of marketable uranium from fuel residues. The source of such residues might be nuclear fuel fabricators or government laboratories, while the processors are the owners of specialized nuclear facilities in the U.S. and overseas. The purified product is typically “enriched” uranium dioxide (U02) that can be blended into the feedstock that makes fuel pellets.

Finally, NUKEM also has a client relationship with TENEX (the overseas marketing arm of the Russian government agency Rosatom), and is assisting TENEX in the marketing of enrichment services (both spot and longer term) to utilities in the U.S. and elsewhere.