Fueling the Hyperscale Era: Russian and Chinese Control of Uranium Supply Chains

In the midst of a bipartisan push for nuclear generation in the United States, there is still a large dependence on foreign sources for enriched uranium, particularly from states like Russia. Earlier this year, President Trump signed four executive orders to expand domestic uranium production, conversion, and enrichment capabilities. Despite this, an increase in enriched uranium demand without appropriate supply will result in a bottleneck that cannot be bridged solely through domestic enrichment and conversion. 

Uranium Properties, Mining, and Refining 

While nuclear power is the primary use of uranium, it can also be used for industrial processes, propulsion, and in weapons. Kazakhstan, Canada, Namibia, and Australia are the leading mining producers, with Australia accounting for the largest proven reserves. The sale of uranium is limited to the signatories of the Nuclear Non-Proliferation Treaty, but this does not prevent the transfer of civilian-grade enriched uranium to non-signatory states like Iran. 

The United States is a historical producer of uranium, primarily for weapons during the Cold War. However, the decline in nuclear energy following the Chernobyl and Three Mile Island accidents, combined with long-term utility contracts and the influx of Russian uranium in 1993, created unfavorable economic conditions that ultimately led to widespread mine closures across the country. Domestic operations also faced political opposition due to the environmental impact of underground and open-pit mining, as well as their location on Navajo lands. Today, over half of the world’s uranium is extracted through in situ recovery, where minerals are recovered by dissolving the ore and pumping it to the surface — requiring remediation of the contaminated groundwater. 

Russia's Dominance and the Emergence of China as a Nuclear Leader

Russia established a significant foothold in the uranium enrichment market through the “Megatons to Megawatts” program. The program cost $8 billion with a 20-year agreement between the US Enrichment Corporation, now Centrus Energy, and TENEX, a subsidiary of ROSATOM State Corporation, acting on behalf of the Russian people. Russia was able to develop expertise in blending down missile-grade uranium while obtaining a large supply of natural uranium. The natural uranium is then enriched to commercial grade and later sold to other Western countries. The program, originally designed to promote peace, resulted in the removal of enough weapons-grade uranium for 20,000 warheads. Subsequently, it also provided Russia with the technological expertise and supply to sustain low prices, ultimately forcing U.S. domestic competitors out of business. 

Despite the ongoing war in Ukraine, the United States only moved to ban imports of uranium products from Russia in May 2024, with companies able to apply for waivers through January 1, 2028. Its curbing effect is limited because, at the end of the extraction process, uranium still has to undergo gasification, enrichment, conversion into fuel pellets, and installation into fuel rods. For energy generation, two types of fuel are used for most standard reactors: Low Enriched Uranium (LEU) and High Assay Low Enriched Uranium (HALEU). Russia is the sole commercial supplier of HALEU, which is crucial for advanced reactor designs such as Small Modular Reactors, next-generation naval propulsion, and space nuclear applications. The only HALEU enrichment facility in the United States is operated by Centrus, the only company to have an approved waiver to source enriched fuel from Russia. 

Russia maintains its advantage through its state-owned enterprise ROSATOM and its various subsidiaries. ROSATOM operates as a vertically integrated market maker, enabling its subsidiaries to offer a comprehensive package of nuclear generation from enrichment to waste at a lower cost than its competitors. 

Another advantage Russia has is the development of multiple conversion facilities to turn mined uranium into uranium hexafluoride, whereas the United States only has one commercial facility. Without the requisite conversion capacity, Russia would still exert a disproportionate influence on supply chains even if the United States builds adequate enrichment centrifuges. 

China has also begun its expansion into uranium enrichment by building up conversion capacity and enrichment facilities for HALEU fuel. It already possesses the majority of processing capacity for rare earths and other critical minerals. Beijing also intends to adopt a similar model for uranium. Additionally, it has been investing substantially in nuclear technology, viewing a successful nuclear field as a sign of an advanced nation. If China and Russia were to restrict exports, the West would be left with only a few options to keep existing reactors fueled and to meet the expanding demands of new plants.

Current Efforts and Policy Recommendations

Uranium supply chain resilience should focus on reshoring or friendshoring enrichment and fuel pellets rather than mining. However, ramping up commercial capacity for enrichment entails a higher upfront cost and a significant compliance burden. The current supply chain creates a “valley of death” scenario due to the upfront costs of a facility, a long payback period, and the potential undercutting of uranium markets, which the market cannot fix without government intervention. 

Alternatively, fuel demands can be met by secondary sources like the conversion of military warheads, recycling uranium from spent nuclear fuel, or new reactor technology that is not dependent on enriched uranium. The Department of Energy recently announced a plan to transfer plutonium from Cold War-era warheads to private companies, in a model similar to Russia’s “Megatons to Megawatts” program. Streamlining commercial recycling would provide an additional source for domestic enrichment while addressing the growing waste stockpile of spent nuclear fuel that sits at decommissioned plants without a permanent repository. Lastly, domestic policy could steer investment to leapfrog the existing enriched uranium supply chain by targeting CANDU reactors, which use non-enriched uranium as fuel and “heavy water” (deuterium oxide) as a coolant, or other reactor designs that use coolants besides water.

In short, the U.S. faces a strategic deficit in sourcing uranium fuel despite the push for more nuclear reactors. As this is a field that is crucial to national competitiveness, the government should prioritize strategic mid-stage equity investments to counter the “valley of death” scenario through instruments like the Defense Production Act, the Export-Import Bank, and the Development Finance Corporation to support spent fuel recycling, HALEU production for SMR reactors, and emerging reactor technologies to insulate against strategic rivals and relocate production domestically or to strategic allies.  

Edited by Ginevra Vercesi

Managing Editor: Suravi Kumar

Thomas Vedder, Staff Writer

Thomas Vedder is a first-year International Science and Technology Policy Master's student with a concentration in energy security and managing emerging technologies. He has experience as a journalist in California and Argentina, covering environmental policy and government accountability.  For more information, please visit his LinkedIn profile: https://www.linkedin.com/in/thomas-vedder/.