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Vol. 12, No. 5 February 2, 2018

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UPP: $xx.xx/lb$22.13/lb U3O8U3O8 WEEKLY ROUNDUP

$25$38 Uranium Price Panel Trump Drops ROK Ambassador Candidate Print($/lb U3O8) ($/lb U3O8) $36 • The White House has withdrawn its presumed candidate, Victor Cha, for the US ambassadorship to Seoul after Cha, a noted expert on North Korea, opposed the $34 24.01 23.95 23.70 idea of a limited strike on the North — a so-called “bloody nose” strategy that many $23$32 32.79 23.16 critics view as highly risky (NIW Jan.26’18). Cha had undergone months of security 31.94 22.91 $30 and financial background checks, but the administration’s support of him reportedly 29.47 29.3322.13 cooled in December after the Georgetown University professor raised his concerns $28 28.94 $21 28.03 with National Security Council officials. The Washington Post first reported the can- $26 12/21 1/4 1/11 1/18 1/25 2/1 2/26 3/4 3/11 3/18 3/24 4/1 didate’s withdrawal on Jan. 30 just before President Donald Trump’s State of the NIWNIW Assessment Union address; Cha, who is also a senior adviser at the Center for Strategic and International Studies, was seen as confirming the news when an op-ed he penned in the same paper was published a few hours later criticizing the idea of attacking North Korea. Cha warned that “a strike (even a large one) would only delay North Market Points Korea’s missile-building and nuclear programs, which are buried in deep, unknown Activity picked up in the uranium spot market places impenetrable to bunker-busting bombs.” And he said it could turn “what this week with up to 700,000 pounds of U3O8 might be a North Korean money-making endeavor into a vengeful effort intended to understood to trade on the last day of January equip other bad actors against us.” and at least 2 million lbs. trading over the week. • South Africa’s new decision-makers have given the clearest indication yet that they The average weekly spot price was still lower, have no intention of proceeding with the long-mooted 9.6 gigawatt nuclear new- however, than the prior week at $22.13/lb. build program. “I can’t go and commit to additional expenditure around a nuclear U3O8 compared with $22.91/lb. on Jan. 23, program,” Calib Cassim, chief financial officer of state-owned utility Eskom, said in according to Nuclear Intelligence Weekly’s a Jan. 30 press conference. “From our side we will focus on maintaining the current WeUraniumb Price Panel. assets, completing the build program that we’re committed to and then we have to look at whether Eskom on its balance sheet can sustain a nuclear program.” Cassim STP Nuclear, owner and operator of the two- spoke only days after Deputy President Cyril Ramaphosa, who is poised to ascend unit South Texas plant, collected bids today for up to 145,000 lbs. U3O8 for delivery in to the presidency within months, told reporters in Davos, Switzerland, that a nuclear February to Areva’s Comurhex plant. STP is newbuild program may be financially out of reach. “We have excess power and we expected to award the contract next week. have no money to go for a major nuclear plant building,” Ramaphosa said on Jan. 25 during the World Economic Forum. “We have said the nuclear process will be looked at in the broad context of affordability.” That’s a word that rarely accompa- nies new nuclear, a reality largely ignored by outgoing President Jacob Zuma, whose preferred successor to head the ruling African National Congress was defeat- ed by Ramaphosa in a December party vote (NIW Apr.28’17).

• The long-mooted merger between China National Nuclear Corp. (CNNC) and China Nuclear Engineering Corp (CNEC) occurred this week after the companies received final approvals from the State Council and the State-owned Asset Supervision and Administration Commission (Sasac), according to a Jan. 31 Sasac announcement. The new company will combine CNEC’s long experience as China’s largest nuclear construction firm with CNNC’s fuel cycle and nuclear generation assets (NIW Contents Oct.13’17; NIW Mar.24’17). CNEC will be transferred to CNNC as a subsidiary with Westinghouse Offers 100% Payback 3 no transaction costs involved and the merged company will remain under Sasac’s Will PJM Save FirstEnergy’s Reactors? 4 ownership. After the merger, the new CNNC is expected to become an even stronger The Rise in China’s Kazakh U3O8 Imports 5 nuclear player in the Chinese nuclear industry, with monopoly positions in the nuclear fuel cycle, engineering and defense fields. The merger is part of China’s broader state- Behind Inkai’s Output Boost 6 owned asset reform that’s stretched over the past three years. Last March, the two China Pushes Forward on Fuel Design 7 nuclear firms revealed their “mutual interests” in consolidating, reportedly submitting Brief Roundup 9 a plan to the State Council for approval. Following the merger, the total number of Uranium Market Update Table 10 Chinese central government-owned companies is down to 96 from 196. NUCLEAR FUEL MARKET leaching at the Wyoming ISR operation, which it expects will Price Drop Incentivizes Buyers increase output and lower costs (NIW Oct.27’17). This week’s deal involves the sale of a portion of two contracts Activity picked up in the uranium spot market this week with representing 935,000 lbs. U3O8 for a total price of $19 mil- up to 700,000 pounds U3O8 understood to trade on the last lion, but also includes Peninsula’s entire interest in an agree- day of January and at least 2 million pounds trading over the ment to purchase 900,000 lbs. U3O8 between 2018 and 2020. week. Traded volumes declined at the end of the week, but Lance has five long-term contracts with a combined weighted the earlier buying interest helped the price rise from $21.75/ average price of $55/lb. U3O8, while its per pound costs are lb. U3O8 on Jan. 31 to $22.25/lb. on Feb. 1. The average understood to be in the high-$30s to low-$40s (NIW weekly spot price was still lower than the prior week at Oct.20’17). One market participant called the deal “another $22.13/lb. compared with $22.91/lb. on Jan. 23, according to sign of producer distress,” particularly after US-based Energy Nuclear Intelligence Weekly’s Uranium Price Panel. Fuels and Ur-Energy on Jan. 16 jointly submitted a petition under the Trade Expansion Act of 1962 recommending a STP Nuclear, owner and operator of the two 1,280 mega- quota that would reserve 25% of US demand for US produc- watt pressurized water reactors at its South Texas plant, col- ers (NIW Jan.26’18). The US Department of Commerce lected bids Friday, Feb. 2, for up to 145,000 lbs. U3O8 to be (DOC) is expected to respond in the next week or two, which delivered in February to Areva’s Comurhex plant. STP is could initiate a 270-day trade investigation, followed by a expected to award the contract next week. And NextEra- DOC recommendation that gives President Donald Trump 90 subsidiary Florida Power and Light this week awarded a days to act. request for quotations for 100,000 lbs. U3O8 annually for four years for delivery to varying locations. One market par- Rio Tinto’s majority-owned Energy Resources of Australia ticipant said the utility may have purchased more than (ERA) reported this week that its in-care-and-maintenance 400,000 lbs. U3O8 from more than one seller. Ranger mine in Kakadu National Park produced nearly 6 mil- lion lbs. of low-grade ore from existing stockpiles at a real- The market also absorbed news that Inkai, one of the ized price of $35/lb. U3O8 in 2017. For 2018, its guidance is world’s lowest-cost uranium mines, will produce 25% more lower at about 4 million-5 million lbs. U3O8 but its average uranium this year (related). In spite of Kazatomprom’s realized price is higher at $42-48/lb. ERA is required to close announcement that it planned to cut production across its Ranger and cease processing activities by January 2021 and operations over three years by 20% from undisclosed prior complete rehabilitation of the area by January 2026. projections, the company, along with Cameco, plans on increasing production to 6.9 million lbs. U3O8 this year at Denison Mines announced this week it has updated its their Inkai joint venture in situ recovery (ISR) mine (NIW mineral resource estimate with an 88% increase in the indi- Jan.12’18). Cameco warns that plans for even higher produc- cated category for its Wheeler River project in the tion depends on the “results of further delineation drilling Athabasca Basin in northern Saskatchewan (NIW Jan.5’18). and market conditions.” But the Canadian producer is certain Denison highlighted a significant increase in the estimated to receive more offtake from the operation despite the fact its mineral resources for Wheeler’s Gryphon uranium deposit ownership stake in Inkai has decreased to 40% (NIW with a cut-off grade of 0.2% U3O8, 61.9 million lbs. U3O8 Dec.15’17). indicated, plus 1.9 million lbs. U3O8 inferred. The project’s high-grade Phoenix and Gryphon deposits have estimated Further indicating trouble for producers, Peninsula Energy production costs of $22.15/lb. U3O8 and $14.28/lb., respec- signed a deal this week to monetize part of an existing long- tively. The Wheeler project is located in the infrastructure- term supply agreement. The company reported it penned a rich eastern part of the basin, where Denison owns a 22.5% deal to sell a portion of its delivery commitments under two stake in the McClean Lake mill, meaning it doesn’t have to existing purchase agreements to a third party, “accelerating raise the capital to build a new mill. Cameco owns a 30% some of the income” in its contract portfolio to “allow the stake in the Wheeler River project, while JCU has 10%. company to comfortably advance our production improve- Jessica Sondgeroth, Washington ment initiatives at the Lance Projects.” Peninsula is seeking [email protected] regulatory approval to switch from alkaline leaching to acid

U R A N I U M P R I C E P A N E L For the week ended February 1, 2018 Weekly Spot Market Prices February January December November Chg. 1 25 18 11 4 21 14 7 30 24 16 9 2 Price ($/lb U3O8) -0.78 22.13 22.91 23.16 23.70 23.95 24.01 24.52 25.05 23.79 24.36 24.61 22.30 20.15

Total Assessments -1.00 11.00 12.00 10.00 12.00 10.00 10.00 10.00 11.00 11.00 11.00 11.00 11.00 9.00 % within 1 StDev 6.82 81.82 75.00 70.00 75.00 80.00 80.00 70.00 81.82 72.73 72.73 54.55 72.73 77.78 Low ($/lb U3O8) -0.85 21.50 22.35 22.75 23.50 23.75 23.75 24.00 24.85 23.25 23.50 24.25 20.00 20.00 High ($/lb U3O8) -1.15 22.25 23.40 23.50 24.00 24.00 24.25 25.00 25.25 24.50 25.00 25.00 23.00 20.25 Variability* 0.02 0.25 0.23 0.09 0.07 0.00 0.01 0.10 0.00 0.28 0.15 0.05 0.61 0.07

*This represents the value of the potential range of conceivable final averages that might result when random elimination is used to balance market positions within the panel.

Page 2 NIW February 2, 2018 www.energyintel.com LEGAL eral unsecured claims” and amount to an eye-popping total of Westinghouse Offers ‘Rare’ 100% Payback $111.4 billion. However, Westinghouse estimates that less than a tenth of that amount, or anywhere from $8.4 billion to Westinghouse’s unsecured creditors with “allowable claims” $8.8 billion, will be “allowed” by the court for repayment. — and mainly outside the Westinghouse-Toshiba orbit — That’s still roughly double what Brookfield is due to contrib- stand to be repaid in full or almost in full thanks to agree- ute, but the lion’s share of what may ultimately be allowed ments by Toshiba and the buyer of some of its claims to agree are $7.6 billion of claims held by Toshiba, Westinghouse to less favorable treatment, according to the bankrupt compa- Electric Holdings UK Limited, and “consenting” claimhold- ny’s Chapter 11 reorganization plan and a more detailed dis- ers such as Nucleus Acquisitions and Citigroup Financial closure statement filed Jan. 29. The plan must still be Products, which purchased claims held by the V.C. Summer approved by unsecured creditors and the federal bankruptcy newbuild project owners (NIW Jan.19’18). They all fall into court in New York, but its filing is a key step toward winding the Class 3B category, meaning that they will receive only a down the nuclear vendor’s massive bankruptcy case and com- fraction of their allowable claims. Nucleus paid $2.2 billion pleting the acquisition of the company by Toronto-based for $5.8 billion in Toshiba claims — roughly 37% — sug- Brookfield Business Partners (NIW Jan.5’18). gesting it is expecting a return at the higher end of the antici- pated distribution range for Class 3B claimants. “This is quite an amazing result, particularly given that unsecured claims were originally trading in the 20s,” Edward A Hierarchy of Claims Schnitzer, bankruptcy chair at CKR Law, told Nuclear Intelligence Weekly. This was a reference to the fact that As in any bankruptcy reorganization plan, at the front of since the bankruptcy filing last Mar. 29, claims traders have the line for any payout are the secured creditors. In been offering to buy unsecured claims, betting they would Westinghouse’s case, this includes the debtor-in-possession pay less for them than the ultimate payout. Initially, they lender, a consortium led by Apollo Investment Corp. whose offered less than 20¢ on the dollar, but those offers gradually $800 million loan has allowed Westinghouse to continue func- went up to over 80¢ on the dollar, and possibly even higher. tioning during the bankruptcy (NIW Apr.14’17). That amount, “Paying out over 20%, let alone 98.9%-100%, to general in addition to unspecified “accrued interest and fees,” will be unsecured creditors is quite a rare result in bankruptcies these paid in full, as will anywhere from an estimated $17.3 million days,” said Schnitzer. to $137.7 million in “other secured claims” deemed allow- able. There are two “priority” categories that will be paid in Under the Brookfield deal, valued at some $4.6 billion, a full, including an estimated $16.8 million to $19.6 million in new entity called Brookfield WEC Holdings would provide allowable “priority tax claims” and between $3.8 million to approximately $3.8 billion in cash to pay off creditors via a $58.4 million in “other priority claims” deemed allowable. vehicle called the Wind Down Co., which will be formed to administer the plan. The deal also includes Brookfield assum- At the back of the line are Class 3B creditors including ing some $770 million in Westinghouse liabilities. As support “non-debtor Westinghouse entities” that have asserted nearly for the plan, Westinghouse provided an alternative liquidation $1.3 billion in intercompany claims (NIW Sep.15’17). Apart plan in which unsecured creditors would get anything from from these “intercompany” claims, there are a number of zero to 6.5¢ on every dollar they are owed under “allowable” other company-related claims under the heading of “general claims. It therefore comes as no surprise that the committee unsecured claims” referenced earlier — these are mostly des- representing unsecured creditors is recommending that all ignated as Class 3B unsecured claims, or, with one exception, holders of unsecured claims vote to accept the plan by a Mar. are otherwise not entitled to share in distributions from the 15 deadline. Class 3A segregated account. The one exception is a group of 28 claims made by Toshiba and its affiliates for $43.7 million Key to the deal was an agreement by Nucleus Acquisition, “for products and services to the debtors’ prepetition business as the purchaser of Toshiba and Vogtle claims, to agree to operations.” These are classed as 3A claims. allow $1.15 million in cash funds to be segregated and used to repay unsecured creditors who provided services and prod- One potential variable in the calculation of the payout to ucts to Westinghouse or its parent company and who, for the 3B creditors is the fate of the dispute between Westinghouse most part, aren’t part of either company. Also crucial was and Citigroup Financial Products over the value of the V.C. Toshiba’s agreement to waive more than $1 billion in claims Summer newbuild project claims that Citigroup recently pur- against Westinghouse entities in Europe. Westinghouse chased from the project’s owners (NIW Jan.19’18). Citigroup believes that out of some $6 billion in “general unsecured is seeking $7.5 billion for the claims, roughly seven times the claims” filed by 2,353 claimants potentially eligible for a slice $1.67 billion maximum that Westinghouse says should be of that cash pie — and now designated “Class 3A” unsecured allowed. But the two sides are believed to be close to a nego- creditors — the total allowable amount will be somewhere tiated settlement. Depending on what’s agreed, the Citigroup between $730.8 million and $1.1 billion. Other unsecured claim will be added to the other 3B claims and could dilute claims — mostly held by Toshiba and its subsidiaries, or their ultimate payout. claim-holders like Nucleus — will fall into a different catego- ry as “Class 3B” unsecured creditors, and they will receive an Sourcing the Cash estimated 30.9%–40.4% of their allowable distributions. While the $3.8 billion to be paid by Brookfield is the vast Of some 3,450 claims filed against Westinghouse and its majority of what ultimately will be paid to creditors, affiliates, the majority, or 2,381, are in the category of “gen- Brookfield isn’t the only contributor to Wind Down. www.energyintel.com NIW February 2, 2018 Page 3 Westinghouse must also transfer “excluded assets” — basically only 14% of the state’s generation capacity, while coal makes remaining cash above $35 million. The court documents show up 59% and natural gas makes up 23%. The timing of any net cash and cash equivalents of just over $1 billion on the potential reactor closures is unclear, but all three nuclear plants main Westinghouse balance sheet as of the end of November are contracted for PJM’s base residual auction through 2021. If and used in the liquidation analysis. However, an end-Decem- PJM market reforms take place this year, it’s more likely the ber balance sheet shows that cash figure down to $799 million. units will stay in operation, but probably under new ownership.

Objections to the disclosure statement are due Feb. 14, and A Helping Hand From PJM? a hearing is slated for Feb. 21 for approval of the disclosure statement. If approved by the court, the disclosure statement, PJM, a regional transmission organization that spans 13 plan and ballots will then be sent to creditors for a vote, states including Ohio and Pennsylvania, on Nov. 15 released according to a filing. Votes would then be due Mar. 15 after its proposal for price formation reforms to allow “inflexible which Judge Michael Wiles has scheduled a Mar. 27 confir- generation” like coal, nuclear and large natural gas plants to mation hearing to consider approval of the plan including set the marginal price, meaning the price needed by the most whether or not the plan received the requisite number of expensive unit needed to serve load. Inflexible units, defined votes in favor of the reorganization (NIW Jan.26’18). as those that must run at a minimum level for technical or Stephanie Cooke, Washington economic reasons, have been precluded from price-setting. [email protected] But PJM said that the “right price in the energy market should not only reflect the true incremental costs of resources required to serve load, but also drive incentives for providing UNITED STATES the flexibility needed to operate the system, given the con- PJM Reforms Could Salvage FirstEnergy Plants stantly changing nature of its conditions.” FirstEnergy Solutions could file for bankruptcy protection by PJM estimates this plan, which it hopes to put in place this the spring, and parent company FirstEnergy Corp. has already year, would see prices rise by $3.50/MW, or 2%-5% at certain stated it wants out of competitive wholesale markets, mean- times and in certain places. Moody’s expects the plan would ing the company’s three reactors will either be sold or closed. be hugely beneficial to nuclear and coal generators: Exelon A sale would be more likely if PJM, operator of the nation’s would benefit from a $500 million “pretax cash flow,” while largest competitive wholesale electricity market, pushes FirstEnergy Solutions, PSEG Power, Talen Energy and Dynegy through pricing reforms beneficial to nuclear energy. “would each record an increase of around $150 million.”

Ohio lawmakers have shown little interest in helping the PJM’s proposal requires approval from the Federal Energy FirstEnergy nuclear and coal generation subsidiary stay in busi- Regulatory Commission (Ferc), which on Jan. 8 rejected a ness (NIW Jan.26’18). And while a federal proposal to benefit proposal by the Department of Energy (DOE) to create a pric- nuclear energy in competitive markets has failed, a regional ing mechanism for baseload nuclear and coal generation based effort to do so could help keep the company’s nuclear plants on on resiliency attributes (NIW Jan.12’18). Ferc found that the line, but FirstEnergy Solutions may not be around long enough proposal conflicted with its mandate for regulating interstate to see it. Weighed down by some $3 billion in debt, FirstEnergy wholesale electricity markets, and failed to show how coal and Solutions is unlikely to meet an Apr. 2 deadline to repay $98.9 nuclear plants are more valuable to grid resiliency than other million in senior unsecured bonds. Moody’s Investor Services forms of generation. But PJM’s argument is more refined, and said in a Jan. 26 report that it’s highly probable the company doesn’t rely on grid resiliency as the basis for reform but will default on the payment. Its parent company last week focuses instead on perceived inadequacies in its existing mar- accepted a $2.5 billion injection from a group of investment ket model, which it says no longer serves today’s generation funds led by Elliott Management “to maximize value and cer- mix. And it refers to Ferc’s own prior determination that tainty to FirstEnergy, while minimizing the timing to exit com- allowing “more resources to set the clearing price if they are petitive generation.” Moody’s views the announcement as an on the margin” will enhance market signals by better captur- indication the subsidiary “is getting close to default.” ing the range of costs for resources required to meet demand.

Ohio senators last week sidelined legislation to support “My sense is that PJM is going to do a much better job nuclear generation even after FirstEnergy repeated warnings than the DOE of crossing its t’s and dotting its i’s,” Nuclear about the prospective bankruptcy and probable closure of its Information and Resource Service’s Executive Director Tim two economically challenged Ohio nuclear assets, the 908 Judson told Nuclear Intelligence Weekly. “They have the megawatt Davis-Besse and 1,108 MW Perry plants, as well as veneer of being a much more market-oriented model.” Still, its 1,800 MW Beaver Valley plant in Pennsylvania, which the rule change pits two energy market ideals against one might have benefited from the Ohio legislation. But the warn- another: fuel neutrality and regional jurisdiction. Only one ings fell on deaf ears despite two years of lobbying by member of Ferc, Commissioner Neil Chatterjee, has been sup- FirstEnergy’s 12 Ohio registered lobbyists and $460,660 in portive of compensation for nuclear and coal plants to help Ohio campaign contributions. Opposition to the utility’s efforts ensure grid resiliency, and he has recently swung over to the is intense and includes the natural gas lobby, the American view of his fellow commissioners who prefer to leave such Petroleum Institute, and other groups like the Ohio decisions to market operators like PJM or state governments. Manufacturers Association and the AARP, the nation’s leading association for retirees. Even Ohio Gov. John Kasich voiced Approval of the reforms would provide a very near-term opposition to the plan. The FirstEnergy nuclear units comprise benefit to nuclear generators and improve the value of

Page 4 NIW February 2, 2018 www.energyintel.com FirstEnergy’s nuclear assets. Among potential suitors, Few can say with certainty what lay behind the resurgent Exelon, which owns reactors in PJM states Pennsylvania, Chinese demand, but with the uranium spot price unable to New York, Illinois, New Jersey and Maryland, stands to gain push above $25 per pound U3O8 during the whole of 2017 tremendously (NIW Jun.2’17). However, Moody’s anticipates some speculate that Beijing simply saw a buying opportuni- that market reform would have some unfavorable implica- ty. And since total spending on uranium imports fell by 9% tions: higher spot prices could mean lower compensation for from the previous year that theory makes sense. China capacity contracts. “Based on PJM’s own simulation, total National Nuclear Corp. (CNNC) and China General Nuclear capacity payment compensation would fall between 17% and (CGN), the country’s two utilities authorized to import yel- 31%, which we estimate would translate into a lower capaci- lowcake, spent a combined total of $1.5 billion, down from ty price of $20-$34 per megawatt-hour-day,” Moody’s said. $1.6 billion in 2016. That 2017 figure was the lowest But these would not take effect until 2021 because payments Chinese utility buyers have spent on imported yellowcake are set three years ahead. since 2009, when the country’s multibillion dollar inventory Jessica Sondgeroth, Washington buildup was only just beginning (NIW May10’10). [email protected] The data released by the Chinese General Administration of Customs, and reported by Reuters, doesn’t go back further URANIUM than 2009. But in the 2009-17 period Chinese buyers spent $16.3 billion to import 138,801 tU, more than double total Beijing Picks Up the Pace annual global production of uranium. That’s also more urani- A huge jump in Kazakh-origin yellowcake sold into China um than China could conceivably have consumed over the last year led to a 15% increase in total Chinese uranium con- same period, and suggests that existing strategic uranium centrate imports after two years of falling demand (NIW stockpiles are enormous. Another theory behind the 2017 Jan.27’17). Chinese buyers imported a total 18,382 tons of demand uptick is that Beijing is now stockpiling to have contained uranium in 2017. enough material to fuel Chinese reactors exported abroad. CNNC is building multiple Countries of Origin for 2017 Chinese Uranium Concentrate Imports reactors in Pakistan, and (tU) Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan has contracted to build Australia — — — 236 — — 236 196 236 — — — more in Argentina. U3O8 ($/lb.) — — — 19.50 — — 38.27 24.50 38.00 — — — Meanwhile CGN is con- Kazakhstan 3,886 1,269 2,281 1,545 — 312 1,604 1,371 1,342 1,338 — 100 U3O8 ($/lb.) 26.61 22.49 33.67 31.86 — 23.16 24.54 32.58 31.03 44.62 — templating newbuilds in 29.14 both the UK and Romania, Namibia 140 537 227 141 — — — — 247 0.06 — — while rival State Power U3O8 ($/lb.) 35.14 31.00 39.58 34.80 — — — — 25.21 30.00 — — Investment is in talks to Russia — 194.17 — — — — — — — — — — supply reactors to Turkey. U3O8 ($/lb.) — 20.84 — — — — — — — — — — All three vendors are push- Uzbekistan 98 98 248 98 — — 98 — 303 — — — ing into new nuclear fuel U3O8 ($/lb.) 36.05 39.29 38.44 39.25 — — 39.35 — 37.71 — — — Total 4,124 2,098 2,757 2,020 — 312 1,939 1,567 2,128 1,338 — 100 designs, too, with eyes on Value ($ million) 291 138 248 163 — 19 136 129 177 155 — 8 both domestic and over- U3O8($/lb.) 27.13 25.30 34.59 30.98 — 23.16 26.96 31.57 32.08 44.62 — 29 seas markets (p7). Data originally reported in grams of uranium. Source: Chinese General Administration of Customs, via Reuters. Astana’s Links to China

Countries of Origin for 2009-17 Chinese Uranium Concentrate Imports Nearly 82% of China’s %Chg. 2017 uranium imports (tU) 2016-17 2017 2016 2015 2014 2013 2012 2011 2010 2009 originated in Kazakhstan, Australia -17% 905 1,096 475 651 1,120 1,418 491 — 294.00 the world’s largest uranium U3O8 ($/lb.) -6 30.31 32.25 46.72 41.80 49.89 54.43 50.70 — 51.90 producer, which has been Canada — — 1,342 1,570 2,071 391 — — — — struggling to diversify its U3O8 ($/lb.) — — 31.49 39.99 51.46 49.89 — — — — customer base and reduce China — — — — — — — 80 — — dependence on China. But U3O8 ($/lb.) — — — — — — — 44.00 — — Kazakhstan 35 15,047 11,110 12,558 14,295 14,981 9,613 10,492 8,166 3,075 last year’s data suggests U3O8 ($/lb.) -23 30.14 39.17 44.66 44.62 47.25 50.81 53.14 47.38 55.50 the linkage between Astana Namibia 53 1,292 845 801 720 843 881 1,032 2,263 514 and the Chinese uranium U3O8 ($/lb.) 5 32.26 30.63 42.64 42.44 52.64 54.43 47.01 54.40 52.99 market is as close as it’s Niger — — — 211 389 — 287 — — — ever been. The increased U3O8 ($/lb.) — — — 36.97 40.74 — 45.36 — — — Kazakh-origin imports are Russia — 194 0 1,657 1,051 — — — 677 — U3O8 ($/lb.) — 20.84 — 35.84 27.22 — — — 48.01 — even more notable given Uzbekistan -39 945 1,555 1,927 2,116 1,633 887 1,285 3,103 449 the fact that Kazatomprom U3O8 ($/lb.) -25 38.22 50.92 53.81 40.47 51.78 54.69 53.53 64.53 61.46 pushed through a 10% pro- Total 15 18,382 15,948 19,200 21,294 18,968 13,086 13,380 14,209 4,333 duction cut last year to a Value($ million) -9 1,463 1,606 2,212 2,424 2,371 1,731 1,819 2,015 626 projected total output of U3O8($/lb.) -21% 30.61 38.74 44.32 43.78 48.09 51.58 51.47 52.34 55.58 22,150 tU (NIW Dec.8’17). Data originally reported in grams of uranium. Source: Chinese General Administration of Customs, via Reuters If that projected total is www.energyintel.com NIW February 2, 2018 Page 5 close to the final Inkai pounds, and CNNC likely takes the same position. All 2017 Chinese Uranium 2017 production of which means that it’s likely easiest for Cameco to swap its Concentrate Imports By figure, then rough- Inkai pounds with other Kazakh producers such as Rosatom’s ly 70% of Kazakh Uranium One. Country of Origin production will Australia, 5% have headed Rosatom is also probably the source of the 194 tU of Namibia, 8% straight across the Russian-origin material imported by China in November last Russia, 1% border into China. year. Some speculate that this figure might simply be a mis- Uzbekistan, take in accounting, representing the uranium component in 5% Several Kazakh Rosatom-supplied enriched uranium product imported in producers benefit- November. It’s conceivable it could be material from ed from the Priargunsky, Russia’s primary uranium mine, but that would Kazakhstan, 81% Chinese buying, be exceptional, as Russian domestic production almost never including leaves the country as concentrates. Kazatomprom, Cameco and The 1,292 tU of Namibian material imported in 2017 was Kazakhstan Uzbekistan Russia France’s Orano, all the greatest amount since 2010, and the 53% increase is Namibia Australia of which continue attributable to CGN’s Husab mine, which shipped its first Source: Chinese General Administration of Customs, via Reuters to deliver into commercial production in September (NIW Sep.29’17). That long-term contracts came in addition to material from Rio Tinto’s Rossing mine nearly a decade old. Beyond those contracts, CGN is taking and from Paladin Energy’s Langer Heinrich. While Paladin is deliveries from its own equity production in the Semizbay-U in administration, CNNC still owns 25% of Langer Heinrich, joint venture with Kazatomprom (NIW Dec.9’16). And both and is presumably still taking delivery of its pounds from the Kazatomprom and Uranium One are apparently selling a operation (NIW Dec.1’17). considerable amount of material across the border under spot Phil Chaffee, London contracts, possibly at a discount to the market. Moreover [email protected] both could be swapping material with Cameco for its deliv- eries into China. KAZAKHSTAN 2009-17 Chinese Uranium The last import of Behind Inkai’s Output Boost Concentrate Imports by Canadian-origin The Inkai joint venture owned by Cameco and Kazatomprom Country of Origin uranium concen- will increase production by 25% this year from its in situ trates to the port recovery (ISR) Inkai mine in Kazakhstan despite a planned 25,000 (tU) of Shanghai broad cut of total Kazakh uranium output. Moreover the two 20,000 occurred in companies will invest hundreds of millions of dollars into October 2016, boosting Inkai’s capacity and possibly its output for years to 15,000 after which come, according to the implementation agreement Cameco Chinese planners concluded in December with Kazatomprom over Inkai’s 10,000 ordered a cessa- restructuring (NIW Dec.15’17). 5,000 tion, apparently to avoid the These details were revealed this week when Cameco filed 0 thorny problem a Jan. 25 Inkai technical report with the Canadian Securities 2009 2010 2011 2012 2013 2014 2015 2016 2017 of having to Administration. When its two owners first agreed to restruc- Kazakhstan Uzbekistan Russia Canada Namibia Australia Niger track any further ture their Inkai joint venture, with Cameco’s share falling Source: Chinese General Administration of Customs, via Reuters deliveries from 60% to 40%, the deal envisioned doubling annual pro- through safe- duction ceilings to 10.4 million pounds U3O8 and extending guarded fuel-processing facilities. Such tracking is required the mine life from 2025 to 2045 (NIW May27’16). It also set under the administrative arrangements connected with the the stage for the possible design, construction and operation Canada-China bilateral nuclear cooperation agreement. After of a Kazakh-based uranium refinery with the capacity to pro- the agreement was concluded, between November 2013 and duce 6,000 tons of contained uranium annually as uranium October 2016, China imported 5,374 tU of Canadian-origin trioxide, or UO3, the first half of the two-stage “wet” urani- material. That may have been all that Chinese officials felt um conversion process. they could comfortably handle in their safeguarded facilities. When the implementation agreement for this arrangement The halt of Canada-origin imports was easily addressed by was signed in London on Dec. 11 by Cameco CEO Tim Orano, which is able to supply into its Chinese contracts via Gitzel and his Kazatomprom counterpart Galymzhan production from its Katco joint venture with Kazatomprom. Pirmatov, it wasn’t clear whether it would include increased Things aren’t so simple for Cameco because the concentrates production or steps toward a UO3 refinery. The feasibility from its Inkai joint venture have long been too high in car- study for a refinery had been completed, but a “formal joint bonates for CNNC’s converters. Despite a test shipment of decision has not yet been made as to whether the refinery Inkai material in March 2016, it’s not clear whether that will be built,” Cameco said in a statement at the time. But problem has been solved. CGN remains unwilling to receive the statement was silent on production increases. The closest

Page 6 NIW February 2, 2018 www.energyintel.com either company came to that was a statement by Pirmatov NUCLEAR FUEL that “increasing our participation share in Inkai will allow us China Pushes Forward on Fuel Design, to further develop this key asset together.” Development A Rapid Doubling of Capacity China’s two dominant nuclear players, China National That’s exactly what’s happening now. Over the next three Nuclear Corp. (CNNC) and China General Nuclear (CGN) years Inkai’s owners are pumping in C$57.2 million ($45.8 have never been shy of competition and that extends to the million) of the C$149.3 million that they plan to spend on fuel sector where both companies are pushing out new construction and expansion at Inkai through 2045. Much of designs in the hopes of capturing, or in CNNC’s case that will go towards expanding product drying and packaging expanding, large and lucrative market segments both domes- capacity of Inkai’s main processing plant, and completing the tically, and eventually overseas. operation’s second satellite plant where the leached pregnant solution pumped out of the ground will go through an ion CNNC is hard to beat as the near-monopoly supplier of exchange process. nuclear fuel to the domestic market, not to mention the fact it owns all of the country’s nuclear fuel manufacturing capa- From 2018-20 Inkai’s owners will also be boosting spend- bility. CGN is nevertheless trying to make inroads by devel- ing on total wellfield development as they expand production oping accident tolerant fuel (ATF) and its own version of beyond Blocks 1 and 2 that Inkai has been commercially Gen III fuel, although these efforts will take time and, mining for over a decade to Block 3. Since a wellfield test assuming success, would almost certainly still rely on CNNC program began on Block 3 in 2015, Inkai has seen noncom- for manufacturing. mercial production of 1.1 million lbs. U3O8. Only two weeks ago, CNNC’s Baotao-based fuel manu- All of this will allow Inkai’s total output to ramp up. The facturing center completed production of 64 AP1000 fuel mine produced 5.5 million lbs. U3O8 in 2017, and that’s assemblies, notwithstanding the fact that the inaugural expected to increase by 25% to 6.9 million lbs. this year. In AP1000 units at Sanmen and Haiyang continue to await a its Jan. 25 announcement of the CSA National Instrument green light for final fuel-loading tests (NIW Jan.19’18; NIW 43-101 filing, Cameco said that Inkai has the right to produce Jan.12’18). CNNC has been nothing if not adept in its ability 10.4 million lbs. U3O8 “subject to market conditions”. Under to manufacture and supply a variety of fuels to its Chinese the life-of-mine (LOM) plan agreed in the restructuring deal, customers, including reactors using the French-designed that level would be reached in 2020 and would remain there AFA3G fuel, VVER reactors that use Russian’s TVS-2M, the for nearly a quarter-century before falling off in 2044. Candu reactor with NU-37 fuel as well as AP1000 and fuel for the HTGR fuel. (The only exceptions are the initial cores But Cameco warns that producing at such levels “will be in Sanmen-1 and Haiyang-1, a portion of the VVER fuel for dependent on results of further delineation drilling and market Tianwan 1-4, and EPR fuel for Taishan-1 and -2 covering the conditions. There is no certainty that the LOM Plan production initial cores and 14 reloads). will be realized.” An alternate production plan based on the current Inkai proven and probable reserves of 269.6 million Meanwhile, CNNC has made steady progress in develop- lbs. U3O8 would see the ISR project produce at capacity from ing the indigenous CF3 fuel series designed for Hualong- 2020-23 before falling off in 2024 and never again pushing One reactors. Last year, CNNC announced that a modified back up to 10.4 million lbs. U3O8 per year. version of CF3 design passed the required expert review clearing it to “enter the manufacturing stage.” In the mean- Either way Cameco’s own equity output is set to rise for the time, 10 CF-series fuel assemblies (including N36-cladding next several years. As the project ramps up Cameco will main- fuels, CF-2 and four CF-3 assemblies) have been under irra- tain offtake rights to 57.5% of the first 5.2 million lbs. U3O8 diation testing in Unit 2 of the Qinshan-II plant since 2014, produced each year, and to 22.5% of all incremental produc- with recent poolside inspections suggesting the fuel performs tion above that. Only when the mine is producing at full capac- “as expected” and with “more margin than predicted values” ity will Cameco’s obligated offtake be reduced to its equity for various indicators of fuel performance. The company ownership of 40%. Of the 6.9 million lbs. U3O8 expected to expects to remove the assemblies by year-end. be produced this year, Cameco will have offtake rights to 3.4 million lbs., up from its offtake of 3.2 million lbs. last year. And earlier this month CNNC signed a “global strategic cooperation agreement” with EDF’s new reactor and nuclear At the same time progress on the long-mooted UO3 refin- fuel division Framatome, which had been the New NP divi- ery is not expected anytime soon. Sometime after the Dec. sion of Areva (NIW Jan.5’18). According to Framatome’s 11 implementation agreement both parties “agreed that the Jan. 10 announcement, the CNNC-Framatome agreement project is not economically attractive at this time.” But will among other things allow the two companies to enhance Cameco noted that under that December 2017 agreement their cooperation in nuclear fuel design. Kazatomprom has an option, which expires in 2021, “to license Cameco’s proprietary uranium conversion technology But last week CGN piped up with an announcement that for purposes of constructing and operating a UF6 conversion it had made “major progress” in developing accident toler- facility in Kazakhstan.” ant fuel (ATF), with selected materials loaded into the the Phil Chaffee, London China Mianyang Research Reactor for irradiation testing. [email protected] Three years into its ATF development program, CGN now www.energyintel.com NIW February 2, 2018 Page 7 claims to have completed a conceptual design for the fuel, If the Hualong-One gains traction overseas, so much the and with the testing it hopes to pinpoint optimal materials better for CNNC given it owns the full intellectual property for the fuel. But ATF has a long way to go and developers rights to the CF3 design. So far, Pakistan is the obvious “cli- in the US and other countries have been at it longer than ent” given that it is building two Hualong-One units at CGN has. CGN’s willingness to invest in the technology Karachi (Units 2 and 3) and last year committed to building can be seen as a reflection of its long and persistent quest a third at Chasma-5. But besides Pakistan, CNNC also hopes for independence in the nuclear front-end, especially fuel for progress in Argentina and other countries. manufacturing. At the moment, although, even if it does develop a viable ATF design, it would likely have to go to CGN isn’t giving up hope of getting its own fuel design CNNC for manufacturing. And that would be only after it both for Hualong-One and apparently also for the CPR100. had built a prototype, and then a pilot assembly, and tested In 2013, the Guangdong-based company introduced a STEP- and modified the assembly through lengthy irradiation 12 design, which was swiftly moved to irradiation testing, experiments. with four prototype assemblies loaded into Lingdong-1 in 2016. But despite these efforts, the SPI expert told Nuclear An Ocean of Opportunity Intelligence Weekly that the STEP-series fuel would still need to go through significantly more testing and modifica- CNNC, on the other hand, is moving its CF3 fuel toward tion. Last year, CGN apparently came up with a “STEP-12B” production, and faces a “blue ocean” in terms of opportunity design and the fuel was loaded into Lingao-2 for new test- for supplying future Hualong-Ones, including those devel- ing. If and when the design is completed, the SPI expert oped either by CNNC or CGN. This is a potentially lucrative noted, “CGN still lacks fabrication technology or expertise market considering that each assembly costs a few million for producing the fuels and eventually may need to rely on dollars to manufacture, and an initial core would cost around CNNC for production.” In other words, STEP fuel manufac- $100 million, while reloads after that would cost around $30 turing line is still a long shot. million annually, according to a nuclear fuel expert at State Power Investment (SPI). Since CNNC and CGN agreed last Separately, SPI announced in January that it had complet- year finally on an “integrated” Hualong-One design with 177 ed the conceptual design for CAP1400 fuel and is now start- fuel assemblies, rather than the traditional 157 assemblies — ing to develop a design for irradiation testing this year. the “pie” is even bigger. C.F. Yu, Beijing

Page 8 NIW February 2, 2018 www.energyintel.com BRIEFS

BULGARIA UNITED STATES Bulgaria’s government has separated the assets and liabilities of the Belene South Carolina and Connecticut did not deliver promising news to Dominion nuclear newbuild project in the hope of creating an attractive company that Energy this week. On Jan. 30, the South Carolina House passed legislation to could be privatized and bought by a strategic investor. That investor would temporarily stop $37 million in monthly ratepayer payments to SCE&G in then help the Balkan country build the 2,000 MW plant, Energy Minister connection with the canceled AP1000 VC Summer project. Dominion had said Temenuzhka Petkova was quoted telling a parliamentary committee this week. it would not go forward with a deal to acquire Scana and its subsidiary Bulgarian taxpayers have spent 3 billion lev ($1.5 billion) on the Belene plant, SCE&G without existing regulatory price recovery mechanisms for the failed which was contracted for in 2006 with Russia’s Rosatom but then canceled newbuild (NIW Jan.26’18). On that same day, the South Carolina Public six years later due to soaring costs. The government now owns two VVER- Service Commission denied a request by Dominion and SCE&G to expedite 1000 reactor pressure vessels and other heavy equipment after an arbitration hearings on the abandonment plan for VC Summer and Dominion’s planned settlement with Rosatom (NIW Dec.9’16). Petkova recently said that there acquisition of Scana (NIW Jan.5’18). In Connecticut, Dominion has yet to was a Chinese investor interested in the project, although she did not provide convince lawmakers its 2,088 MW Millstone plant is at risk of premature clo- specifics (NIW Dec.16’16). Late last year a government-commissioned report sure (NIW Jan.12’18). A final report, commissioned by the state from Boston- argued the best financial model for Belene’s completion would be 70% own- based energy management consulting firm Levitan & Associates, reaffirms the ership by a strategic investor and 30% by the Bulgarian state. The report findings of an earlier draft report showing the plant should remain financially claimed that Bulgaria, which for years has been a net electricity exporter in the profitable until 2035, when its federal operating license expires. Connecticut Balkan region, could experience an energy deficit by 2030. Other options are lawmakers in October passed legislation to permit, but not require, regulators also on the table, including selling 100% of the project or allowing the state to to change the rules to allow Millstone to benefit from the state’s zero-carbon retain complete ownership. generation program, only if it is in the best interest of ratepayers. JAPAN UNITED STATES Corrosion holes in the air exchange ducts of the Shimane-2 control room dis- Exelon will permanently close its 625 MW Oyster Creek nuclear power plant covered in December 2016 posed a potential threat of radioactive material in New Jersey in October 2018, one year ahead of schedule. Exelon is required flowing into the area in the event of an accident and potentially exposing key to close Oyster Creek by December 2019 as part of a 2010 agreement with the workers, the Nuclear Regulation Authority (NRA) declared in a Jan. 31 report. state of New Jersey. In its Feb. 2 announcement, Exelon said its new closing That report classed the discovery as a Level One event on the IAEA’s date will allow it to “better manage resources as fuel and maintenance costs International Nuclear and Radiological Event scale, signifying an “anomaly.” continue to rise amid historically low power prices.” Oyster Creek had failed to Unclear is whether or how this might affect Chugoku Electric Power Co.’s clear regional transmission organization PJM’s capacity auctions for 2017-18 application to restart the boiling water reactor. In a regular meeting Jan. 31, the and 2018-19. The early closure of Oyster Creek, which is the oldest operating NRA reviewed its report on the incident with representatives of the Cabinet’s GE Mark I boiling water reactor in the world, was welcomed by anti-nuclear office for crisis management. The NRA report related that the utility confirmed group Beyond Nuclear. After the Fukushima disaster in 2011, the US Nuclear the discovery of the corrosion on Dec. 12, 2016. At the time, the NRA instruct- Regulatory Commission (NRC) ordered Mark I and II reactors to comply with ed the utility to submit a report on the incident. The NRA said the Level One safety upgrades. Oyster Creek was scheduled to upgrade containment systems rating was due to the fact that Chugoku did not know how long the holes, after a September 2016 refueling outage, but the NRC granted Exelon an which were under insulation, had existed. Most have apparently been repaired. extension to January 2020, after the projected closure date. “None of our coun- A chart shows that 46 holes were found on external and interior surfaces of the try’s Fukushima-design reactors should have operated for even one more day major air duct connecting the main control room with external air. While most once we saw the catastrophic events publicly unfold worldwide at were measured in millimeters, one was 30 centimeters by 100 centimeters and Fukushima,” said Paul Gunter, a reactor safety specialist at Beyond Nuclear. another was 15 centimeters by 1 centimeters. UNITED STATES UKRAINE A US private-equity firm with an interest in nuclear energy this week acquired Ukraine’s Energoatom and Westinghouse Electric on Jan. 29 signed a five-year Waste Control Specialists (WCS) from holding company Valhi after radioactive extension to their fabricated fuel supply agreement, cementing an arrangement waste vendor EnergySolutions failed in its bid for the company last year. JF that allows Ukraine to minimize dependency on Russia’s Tvel. Neither company Lehman, which in June purchased New York-based dismantling and remedia- revealed how much fuel Ukraine will receive under the deal that begins in 2021, tion services company NorthStar, will acquire WCS’s commercial low-level but Westinghouse CEO Jose Emeterio Gutierrez said in a statement that the con- radioactive waste (LLRW) disposal facility in Andrews County, Texas. WCS tract provides for use of “some fuel components from a component manufactur- already has an agreement to store LLRW from projects managed by NorthStar, er in Ukraine,” attesting to the “strengthening relationship” between the two which is attempting to buy the shuttered Vermont Yankee nuclear plant for counterparties. The contract was previously extended in 2014, after Ukraine’s cleanup (NIW Aug.18’17). “We are excited to support the long-term success of relations with Russia collapsed (NIW Apr.11’14). Last year Energoatom, which the business through continued engagement and partnership with industry stake- operates 13 VVER-1000s and 2 VVER-440s, received roughly half its fuel from holders, including strengthening the partnership with NorthStar to deliver a best- Tvel and half from Westinghouse’s plant in Sweden, according to government in-class nuclear power plant decommissioning solution,” JF Lehman partner officials. Ukraine announced in December that between January-October 2017 Alex Harman said. Two of the firm’s founding partners — John Lehman and the country imported $381.1 million in nuclear fuel, of which $244.3 million George Sawyer — served in the US Navy, Lehman as a former secretary and was Russian fuel and $136.8 million was Westinghouse’s. Assuming a roughly Sawyer as an assistant secretary. EnergySolutions was unable to acquire WCS equal number of assemblies from each provider, the cost difference would come because the deal was blocked by a US District Court judge who agreed with the from Tvel’s preference for bundling fuel services — U3O8, conversion, enrich- Department of Justice that the merger would “lead to higher prices, lower-quali- ment, and fabrication — while Westinghouse fabricates assemblies. This means ty service and less innovation” in the commercial LLRW disposal industry Energoatom has to source the other services on the open market, a new practice (NIW Jun.23’17). for the state-owned corporation (NIW Apr.7’17). www.energyintel.com NIW February 2, 2018 Page 9 v ENERGY INTELLIGENCE URANIUM MARKET UPDATE All prices as of Thursday, February 2, 2018 UPP vs. Solactive Global Uranium Index* WNA Nuclear Stock Index vs. UPP vs. Solactive(previous Global Uranium52 weeks) Index* WNADow Nuclear Jones Stock Industrial Index vs. Dow Average* Jones Industrial Average* ($/lb U308) (Index) WNAI † (previous 52 weeks) DJIA (’000) 33 27 2.6 27.0 2.5 26.0 30 SGU 25 2.4 / 25.0 2.3 DJIA 27 23 \ 24.0 UPP 2.2 WNAI 23.0 \ 2.1 \ 24 21 22.0 2.0 21.0 21 19 1.9 1.8 20.0 18 17 1.7 19.0 1.6 18.0 15 15 1.5 17.0 Sep' 16 Nov' 16 Jan' 17Mar' 17 May' 17 Jul' 17 Sep' 17 Nov' 17 Jan' 18 Sep '16Nov '16 Jan '17Mar '17 May '17 Jul '17 Sep '17Nov '17 Jan '18 *Solactive Global Uranium Total Return Index, created by Structured Solutions *Roughly two-thirds of the Dow Jones Industrial Average’s 30 component com- AG, tracks the price movements in shares of companies active in the uranium panies are manufacturers of industrial and consumer goods. The others represent mining industry. Calculated as a total return index and published in USD, its industries ranging from financial services to entertainment. †Index relative to composition is ordinarily adjusted twice a year. value of 1.0 on Jan. 1, 2002.

UPP vs. PowerShares DB Commodity Index* Tepco Stock Price UPP vs. PowerShares(previous DB Commodity 52 weeks) Index* vs. WNA Nuclear Stock Index* ($/lb U308) (Index) WNAI † (previous 52 weeks) Tepco ($/Share) 40 20

2.2 10 35 18 WNAI \ DBC 2.0 8 30 / 16

1.8 6 25 14

1.6 4 20 \ 12 UPP \ TEPCO 15 10 1.4 2 Sep '16Nov '16 Jan '17Mar '17 May '17 Jul '17 Sep '17Nov '17 Jan '18 Sep '16 Nov '16 Jan '17 Mar '17 May '17 Jul '17 Sep '17 Nov '17 Jan '18

*The PowerShares DB Commodity Index Tracking Fund is designed to provide *Maintained by the World Nuclear Association, the World Nuclear Association investors with a broadly diversified exposure to the returns on the commodities Nuclear Energy Index includes companies that build nuclear power facilities, markets. It is based on the Deutsche Bank Liquid Commodity Index, which is com- design and service reactors, operate nuclear reactors, supply nuclear components, posed of futures contracts on 14 of the most heavily traded and important physi- technology, and fuel. †Index relative to value of 1.0 on Jan. 1, 2002. cal commodities.

Monthly Spot Market Prices 2017 Change Dec Nov Oct Sep Aug July June May Apr Mar Uranium ($/lb U3O8) Low +3.50 23.50 20.00 19.90 19.75 19.50 19.75 19.25 19.25 22.50 24.00 High -0.50 25.50 26.00 20.50 20.75 21.00 20.50 20.50 22.75 23.50 26.00 Conversion ($/kgU) Low +0.25 5.00 4.75 4.50 4.60 4.75 4.75 5.00 5.00 5.00 5.50 High +0.75 6.00 5.25 5.25 5.10 5.25 5.25 5.50 5.50 5.50 6.00 Enrichment ($/SWU) Low -1.00 39.00 40.00 40.00 40.50 41.00 42.00 42.00 42.00 45.50 47.00 High -1.00 42.00 43.00 43.00 42.00 43.00 43.00 43.00 45.00 48.50 50.00

NIW monthly UF6, SWU and U3O8 prices rely on the general consensus of direct market participants and is informed by actual market transactions. This section was previously known as the Nukem Weekly Report and the Nukem Price Bulletin. The methodology for NIW’s weekly UPP price is different – more information about the methodology behind that price is available on page two.

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