The reliance on Russian nuclear fuel is a significant challenge for Western nations, especially in light of the ongoing geopolitical tensions. Nicolas Maes, the CEO of Orano, which is the second-largest supplier of enriched uranium in the West, has indicated that breaking away from Russia needs more than just political will; it requires substantial investment and guarantees from alternative suppliers.
Since Russia invaded Ukraine in 2022, the nuclear fuel supply chain has largely escaped the sweeping sanctions that have impacted the oil and gas sectors. This is mainly due to Russia’s monopolistic control over around 40% of the global enrichment market. Recently, the US has moved to prohibit Russian nuclear fuel imports while allowing some exemptions until 2028. However, Europe remains heavily tied to Russian supplies, complicating efforts to reach a consensus on further sanctions, particularly because many Eastern European countries depend on Russian-made fuel for their nuclear power plants.
Maes highlighted that constructing new uranium enrichment plants could take just a few years. Orano is currently expanding its facility in France with a €1.7 billion investment, expected to start producing by 2028. Although it is technically feasible to eliminate Russian fuel reliance within the next decade, it hinges upon securing commitments for sustained demand to justify the necessary investments.
“If full sanctions are in place, we will see a maximum level of investment in enrichment capacities,” Maes noted. Conversely, if there are no sanctions, many electricity producers may continue to source fuel from Russia as long as it remains available.
Orano has established pre-signed contracts with customers in the US and Europe, indicating a shift towards diversifying nuclear fuel sources. Nations such as South Korea, Japan, South Africa, and India have expressed interest in obtaining supplies from other providers since the outset of the conflict in Ukraine.
Despite the sanctions against Russian imports, complexities remain. Authorities in the US are currently investigating if Russia is circumventing the bans with the help of China, which could pose further challenges in resolving the situation.
In addition to its core business, Orano has diversified into the medical field, particularly in radiopharmaceuticals. However, the company faced a €133 million loss in the first half of 2024, primarily due to disruptions in its mining operations in Niger following a coup.
While exports from Niger have ceased, Orano has compensated through increased production in Canada but aims to regain its position in Niger. The company is contesting the ruling junta’s decision to revoke their exploitation permit at the Imouraren site and is also working to lift export restrictions impacting its operational activities. Maes noted that the ongoing challenges could risk the viability of their operations in Niger.