Centrus Wins LEU Enrichment Award from U.S. Department of Energy

Rhea-AI Summary

Centrus Energy (NYSE American: LEU) has secured its third award from the U.S. Department of Energy for expanding domestic commercial production of Low-Enriched Uranium (LEU). The company's subsidiary, American Centrifuge Operating, is among six awardees, with contracts ranging from $2 million minimum to $3.4 billion maximum over ten years.

The company announced plans to invest $60 million over 18 months to resume centrifuge manufacturing, expand its Tennessee facility, and prepare its Ohio facility for operations. The project will utilize domestic engineering and a supply chain spanning 14 American-owned suppliers across 13 states.

This award follows two previous selections: one for producing High-Assay, Low-Enriched Uranium (HALEU) for advanced reactors and another for deconverting HALEU from uranium hexafluoride to uranium oxide/metal forms.

LEU Enrichment Award Marks Third Selection for Centrus under DOE's Nuclear Fuel Supply Program

BETHESDA, Md., Dec. 11, 2024 /PRNewswire/ -- Centrus Energy (NYSE American: LEU) announced today that its subsidiary, American Centrifuge Operating, LLC ("ACO"), has won an award from the U.S. Department of Energy aimed at expanding domestic commercial production of Low-Enriched Uranium ("LEU") to meet the needs of existing and future nuclear reactors. This is the third selection for Centrus under a series of three solicitations from the Department as part of a program to restore America's domestic nuclear fuel supply for LEU and High-Assay, Low-Enriched Uranium ("HALEU"). 

"Centrus is proud to be leading the effort to restore America's ability to enrich uranium – with American technology, built by American workers," said Centrus President and CEO Amir Vexler. "This, along with our prior two awards, is the next step towards creating a public-private partnership to expand our enrichment capacity in Ohio to meet the full range of America's commercial and national security requirements for enriched uranium."

ACO is one of six awardees being announced today for LEU production, with a minimum contract value of $2 million and a maximum value for all awardees of $3.4 billion over a ten-year period. The ultimate dollar amount associated with this award – and the potential scale of the expansion supported — will depend upon task orders subsequently issued by the U.S. Department of Energy to Centrus.

Centrus announced on November 20, 2024, that it is resuming centrifuge manufacturing, expanding the capacity of its Tennessee centrifuge manufacturing facility, and preparing its Ohio operating facility to accept, test and install centrifuges. Centrus expects to invest $60 million in this effort over an 18-month period so that it can scale up to meet the needs of commercial and government customers as quickly as possible. 

ACO will manufacture the centrifuges and supporting equipment exclusively in the United States, relying upon domestic engineering and a domestic supply chain that currently spans 14 major, American-owned suppliers in 13 states and is expected to grow. The only other Western centrifuge technology in commercial operation today is the European centrifuge design, which is exclusively manufactured in the Netherlands. 

Other Department Awards

Separate from this award, ACO was also one of the awardees selected on October 17 to produce HALEU for advanced reactors. Prior to this, Centrus was among the awardees selected on October 8^th to deconvert HALEU from uranium hexafluoride (UF6) to uranium oxide and/or uranium metal forms, a key step in the nuclear fuel production process which is separate from, and subsequent to, production of HALEU via uranium enrichment. 

About Centrus Energy

Centrus Energy is a trusted American supplier of nuclear fuel and services for the nuclear power industry, helping meet the growing need for clean, affordable, carbon-free energy. Since 1998, the Company has provided its utility customers with more than 1,850 reactor years of fuel, which is equivalent to more than 7 billion tons of coal. 

With world-class technical and engineering capabilities, Centrus is pioneering production of High-Assay, Low-Enriched Uranium and is leading the effort to restore America's uranium enrichment capabilities at scale so that we can meet our clean energy, energy security, and national security needs. Find out more at www.centrusenergy.com.

Forward Looking Statements 

This news release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as "expects", "anticipates", "intends", "plans", "believes", "will", "should", "could", "would" or "may" and other words of similar meaning. These forward-looking statements are based on information available to us as of the date of this news release and represent management's current views and assumptions with respect to future events and operational, economic and financial performance. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control.

For Centrus Energy Corp., particular risks and uncertainties (hereinafter "risks") that could cause our actual future results to differ materially from those expressed in our forward-looking statements and which are, and may be, exacerbated by any worsening of the global business and economic environment include but are not limited to the following: risks related to the U.S. Department of Energy ("DOE") not awarding any contracts to the Company in response to any of the Company's proposals; risks related to DOE not issuing any task orders to any awardee under any of the LEU, HALEU or Deconversion contracts or any task orders to the Company under either of those contracts; risks related to the Company not winning a task order under the HALEU contract to expand its HALEU plant; risks related to DOE not providing adequate share of the appropriated funding; risks related to our ability to secure financing to expand our plant; risks related to our ability to increase capacity in a timely manner to meet market demand or our contractual obligations; risks related to laws or other government actions that ban or restrict (i) imports of Russian LEU into the United States or export of Russian LEU out of Russia, including but not limited to the "Prohibiting Russian Uranium Imports Act" ("Import Ban Act") or Russian Federation Decree No. 1544 or (ii) transactions with the Russian State Atomic Energy Corporation ("Rosatom") or its subsidiaries, which includes TENEX; risks related to our potential inability to secure additional waivers or other exceptions from the Import Ban Act or other sanctions in a timely manner or at all in order to allow us to continue importing Russian LEU under the TENEX Supply Contract or otherwise doing business with TENEX or implementing the TENEX Supply Contract; risks related to TENEX's refusal or inability to deliver LEU to us for any reason including because (i) U.S. or foreign government sanctions or bans are imposed on LEU from Russia or on TENEX, (ii) TENEX is prohibited, unable or unwilling to deliver or export LEU, receive payments, receive the return of natural uranium hexafluoride, or conduct other activities related to the TENEX Supply Contract, or (iii) TENEX elects, or is directed (including by its owner or the Russian government ), to limit or stop transactions with us or with the United States or other countries; risks related to the increasing quantities of LEU being imported into the U.S. from China and the impact on our ability to make future LEU or SWU sales or ability to finance any buildout of our enrichment capacities; risks related to whether or when government funding or demand for high-assay low-enriched uranium ("HALEU") for government or commercial uses will materialize and at what level; risks related to (i) our ability to perform and absorb costs under our agreement with the DOE to deploy and operate a cascade of centrifuges to demonstrate production of HALEU for advanced reactors (the "HALEU Operation Contract"), (ii) our ability to obtain new contracts and funding to be able to continue operations and (iii) our ability to obtain and/or perform under other agreements; risks related to reliance on the only firm that has the necessary permits and capability to transport LEU from Russia to the United States and that firm's ability to maintain those permits and capabilities or secure additional permits; risks that (i) we may not obtain the full benefit of the HALEU Operation Contract and may not be able or allowed to operate the HALEU enrichment facility to produce HALEU after the completion of the HALEU Operation Contract or (ii) the output from the HALEU enrichment facility may not be available to us as a future source of supply; risks related to the fact that we face significant competition from major LEU producers who may be less cost sensitive or are wholly or partially government owned; risks related to the potential for demobilization or termination of the HALEU Operation Contract.

Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this news release and in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023, under Part II, Item 1A – "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and in our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this news release, except as required by law.

Contacts:

Investors: Neal Nagarajan at NagarajanNK@centrusenergy.com

Media: Lindsey Geisler at GeislerLR@centrusenergy.com

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SOURCE Centrus Energy Corp.

FAQ

What is the maximum value of the LEU production contract awarded to Centrus (LEU) by the DOE?

The maximum contract value is $3.4 billion over a ten-year period, to be shared among six awardees, with a minimum contract value of $2 million.

How much is Centrus (LEU) investing in its centrifuge manufacturing expansion?

Centrus is investing $60 million over an 18-month period to resume centrifuge manufacturing and expand its facilities in Tennessee and Ohio.

How many U.S. suppliers are involved in Centrus's (LEU) domestic supply chain?

Centrus currently works with 14 major American-owned suppliers across 13 states, with expectations for further growth.

What are the three recent DOE awards won by Centrus (LEU)?

Centrus won awards for LEU production, HALEU production for advanced reactors, and HALEU deconversion from uranium hexafluoride to uranium oxide/metal forms.

Where are Centrus's (LEU) manufacturing facilities located?

Centrus operates a centrifuge manufacturing facility in Tennessee and has an operating facility in Ohio.