The Effects of US and Russian Government Surplus Inventories

signed an agreement in 1993 that provided for the conversion of high enriched uranium (HEU) from dismantled Russian nuclear weapons into fuel for commercial nuclear reactors. The United States followed by announcing plans to dispose of HEU in a similar manner, along with other uranium inventories no longer required for national security purposes. The much anticipated introduction of uranium from these inventories into the marketplace was delayed while legal procedures were being developed for selling the uranium. With resolution of many of the outstanding issues during 1996 and 1997, US and Russian government surplus inventories are poised to play a key role in the world uranium market. The extent to which these inventories can provide a steady and secure source of supply is of great importance to the nuclear industry. The Energy Information Administration (EIA), an independent organisation within the US Department of Energy (DOE), develops projections of uranium prices and supply through to 2010. The projections are made available as part of EIA’s responsibility for providing energy information and analysis. EIA does not propose or advocate policy or legislation. Because uranium market projections are subject to considerable uncertainty, three alternative cases were developed by EIA to analyse the effects of selling US and Russian government surplus inventories on the uranium market. The analysis presented in this paper focuses on the following government inventories declared as surplus: l Russian HEU; l US HEU; l US natural uranium and low enriched uraniu