The Biden Administration has awarded contracts to Centrus Energy (LEU, Financial) and Orano SA to develop high-enriched uranium required for advanced nuclear reactors. These contracts involve up to $2.7 billion in government funding, with the exact amount depending on future orders from the U.S. Department of Energy. General Matter and Louisiana Energy Services, which operates the Urenco New Mexico uranium enrichment plant, are also recipients of this funding.
This type of nuclear fuel, known as High-Assay Low-Enriched Uranium (HALEU), is used to power small modular reactors. Unlike traditional reactors, these can be constructed in factories, transported via truck or train, and assembled on-site. Currently, Russia is the only supplier of HALEU, with an enrichment level between 5% and 20%.
This funding is part of the Biden Administration's multi-billion dollar initiative to reduce U.S. reliance on affordable Russian enriched uranium and revive the dormant American uranium enrichment sector, along with other specialized services needed for nuclear fuel production. Earlier this year, a ban on importing Russian reactor fuel took effect, although limited exemptions are allowed for the U.S. Department of Energy until 2028. The U.S. government also awarded contracts for similar nuclear conversion services to transform gaseous uranium hexafluoride into usable oxide form.
Following the news, Centrus Energy (LEU, Financial) shares rose nearly 5% by market close. So far this year, the stock has climbed 49%. It's noteworthy that as tech giants like Amazon (AMZN) and Microsoft (MSFT) invest in nuclear energy, the U.S. nuclear sector is booming. NuScale Power (SMR) shares have surged nearly 450% this year, NANO Nuclear Energy (NNE) by 370%, and Vistra Energy (VST) by 230%.
