Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolios

UPDATE 1-Russia signs fourth U.S. uranium deal with Exelon

Published 06/03/2009, 10:28 AM
Updated 06/03/2009, 10:32 AM
SIEGn
-
EXC
-
AEE
-

* Exelon Corp to buy Russian uranium directly in 2014-2020

* 4th such deal since "wall" to U.S. market broken last week

* Rosatom subsidiary plans $3 bln bond to fund expansion

By Simon Shuster

MOSCOW, June 3 (Reuters) - Russia's state nuclear firm Rosatom sealed a uranium supply deal with U.S. utility Exelon Corp on Wednesday and voiced plans to issue a 100 billion rouble bond as it intensifies its global expansion.

Last week, the company said it had "broken down the wall" into the U.S. uranium market by striking three landmark deals to supply nuclear fuel worth more than $1 billion to U.S. power firms PG&E

U.S. anti-dumping laws, which were relaxed last year, had previously only allowed Russia to sell the United States uranium recovered from dismantled Soviet nuclear weapons.

These sales are carried out through U.S. uranium trader USEC Inc, which had an effective monopoly on Russian uranium imports under the so-called "megatons to megawatts" scheme established.

But Exelon will now become the fourth U.S. firm to buy the fuel directly from Rosatom's uranium exporter Tenex, also known as Techsnabexport.

Tenex is expected to gain control of 20-25 percent of the U.S. uranium market over the next decade as the chance to strike direct supply deals opens up. Analysts expect U.S. uranium prices to fall as Russian fuel pours into the market.

Under all four of the contracts already signed, state-owned Tenex will provide uranium to between 2014 and 2020.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

But Rosatom has not revealed the volume or price of the fuel it will supply, saying only that it will be in line with market prices.

BOND TO FUND GLOBAL EXPANSION

Russia, one of the world's biggest nuclear players, has long been seeking to expand its clout in the sector by moving into developed markets such as the United States, European Union and Japan.

Earlier this year, another Rosatom subsidiary, Atomenergoprom, signed deals to cooperate with Japan's Toshiba and Germany's Siemens, putting Russia in the centre of a nuclear alliance stretching from Western Europe to East Asia.

Sergei Kiriyenko, the head of Rosatom, said seperately on Wednesday that this subsidiary plans to issue rouble bonds worth 100 billion roubles ($3.25 billion) to fund its global expansion.

Atomenergoprom was created by Prime Minister Vladimir Putin when he was Russia's president to merge all of the country's civilian nuclear assets and help them compete in the global market.

Its current operations include building Iran's controversial nuclear reactor at Bushehr through another Rosatom subsidiary, Atomstroyexport, as well as projects to provide nuclear fuel or build reactors in India, the Middle East, Asia and at home. Exelon, of Chicago, owns and operates more than 38,000 MW of generating capacity, markets energy commodities, and transmits and distributes electricity to about 5.4 million customers in northern Illinois and southeast Pennsylvania and natural gas to about 480,000 the Philadelphia area. (Editing by James Jukwey)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.