Uranium laser tech company Silex Systems (ASX:SLX) has inked a non-binding letter of intent with one of the largest energy companies in the US to develop areas of mutual interest in the nuclear fuel supply chain.
The letter of intent is between Silex, Global Laser Enrichment, and two subsidiaries of Duke Energy.
Who are these parties?
Global Laser Enrichment is the exclusive licensee of the SILEX laser technology for uranium enrichment, and is a jointly controlled venture through a 51/49 split between Silex Systems (ASX:SLX) and Cameco Corporation. Cameco is a global uranium and nuclear fuel provider.
Duke Energy is one of the largest energy companies in the US which operates 11 major nuclear power units across six sites in North Carolina and South Carolina, generating nearly 11,000 megawatts of reliable, carbon-free electricity.
What is uranium enrichment?
Uranium enrichment is the process of turning uranium into fuel to operate light water reactors, according to the World Nuclear Association. The enrichment process requires the uranium to be in a gaseous form. This is achieved through a process called conversion, where uranium oxide is converted to a different compound (uranium hexafluoride) which is a gas at relatively low temperatures. The key term here is “enrichment”.
Why is uranium becoming a focus?
Following the Russian war in Ukraine, there has been a big focus for producers to reduce their reliance on Russian enriched uranium. The invasion has seen a growing list of sanctions and companies decoupling themselves from Russia.
In 2020, Russia accounted for 16 per cent of the uranium imported into the US, according to the US Energy Information Administration. Owners and operators of US nuclear power reactors purchased the equivalent of about 48.9 million pounds of uranium in 2020.
On the 8 June, the Biden administration pushed lawmakers to support a US$4.3 billion plan to buy uranium directly from domestic producers, according to Bloomberg.
Nearly a month later, on July 2, according to a government notice, the US energy department plans to buy as much as one million pounds of locally sourced uranium in America. Solicitation by the National Nuclear Security Administration offers up to four contracts ranging from 100,000 to 500,000 pounds of uranium.
What is the significance of this announcement?
Silex’s chief executive officer and managing director Michael Goldsworthy says, “as the U.S. government ramps up initiatives to rebuild its domestic nuclear fuel supply chain and lessen its dependence on nuclear fuel imports, particularly from Russia, we anticipate Global Laser Enrichment’s engagement with U.S. nuclear power generators will help support the commercialisation of the SILEX technology”.
What problem are they trying to solve?
Global Laser Enrichment have said that they are looking to address the “Triple Opportunity” emerging in the nuclear fuel supply chain as a result of global climate change and geopolitical issues.
1) Tails processing to produce natural grade uranium hexafluoride and help alleviate uranium hexafluoride conversion supply pressure.
2) Build capacity to supply enrichment to the market for the production of low enriched uranium and low enriched uranium plus.
3) Build additional capacity to produce high assay low enriched uranium fuel for next generation advanced small modular reactors.
What are the company’s achievements so far?
There have been a few. Some of them include developing the world’s only 3rd Generation laser uranium enrichment technology. One of these applications is the enrichment of uranium for use in nuclear energy power generation.
The company has also manufactured the world’s first integrated circuit at the atomic scale, which opens the door towards building a commercial quantum computer. The quantum integrated circuit was built in a layer of enriched silicon, a key enabling material available only in limited supply mostly from Russia. Now they are undertaking a project to apply a variant of its SILEX laser isotope separation technology to produce this silicon.
With the threat of growing sanctions to Russia from the West, utilities in the US are racing to secure reliable supply ahead of their existing Russian purchase contracts expiring. Depending how the energy crisis unfolds, the company could be one to watch.
Shares are trading 19.6 per cent higher to $2.62.
Image source: Silex.