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Federal Register / Vol. 86, No. 145 / Monday, August 2, 2021 / Notices
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2. The Increasing Presence of China in the Global Uranium Market Will Further Weaken U.S. and Other Market Uranium Producers Although Chinas uranium industry has been developed primarily to serve the countrys growing fleet of nuclear reactors, China is increasing its involvement in the global nuclear fuel industry.148 Chinas involvement in the global nuclear fuel industry is an outgrowth of its domestic uranium procurement strategy. As China has only limited domestic uranium reserves, it has also acquired interests in uranium deposits outside China. This two markets, two resources 149 policy has led Chinese firms to acquire significant shares of mines in Kazakhstan and Namibia, with prospective developments in Niger and Canada.150
147 Since the Russian annexation of Crimea and intervention in eastern Ukraine in 2014, Russia has steadily built up its military assets in the Baltic Sea region. Russia therefore could close Baltic Sea shipping lanes with comparative ease. Oder, Tobias.
The Dimensions of Russian Sea Denial in the Baltic Sea. Center for International Maritime Security, January 04, 2018. http cimsec.org/
dimensions-russian-sea-denial-baltic-sea/35157.
148 Chinas Nuclear Fuel Cycle. World Nuclear Association. http www.world-nuclear.org/
information-library/country-profiles/countries-a-f/
china-nuclear-fuel-cycle.aspx.
149 Pascale Massot and Zhan-Ming Chen. China and the Global Uranium Market: Prospects for Peaceful Coexistence. The Scientific World Journal, 2013. https www.hindawi.com/journals/
tswj/2013/672060/.
150 Chinas Nuclear Fuel Cycle. World Nuclear Association. http www.world-nuclear.org/
information-library/country-profiles/countries-a-f/
china-nuclear-fuel-cycle.aspx.

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Chinas activity in Namibia is of particular interest.151 Namibia has two active uranium minesHusab and Rossing. Chinese firms have a majority stake in Husab and purchased a majority stake in Rossing. However, the Rossing transaction is under review by the Namibia Competition Commission. A
Chinese firm does have a 25 percent stake in the Langer Heinrich mine, but that mine was placed in care and maintenance in 2018 and thus cannot be characterized as active. These mines production costs exceed current global uranium prices, and so cannot support commercial production. However, cost recovery is seemingly not a concern for Chinese-state owned producers.
Between 2014 and 2018, U.S. utilities purchased approximately 347,781
pounds of uranium concentrate, 2.33
million pounds of U3O8 equivalent of conversion services, and 1.4 million separative work units SWU of enrichment servicesenough to supply 16 average reactors per yearfrom Chinese producers. U.S. utilities also have contracts with Chinese producers for at least 130,000 SWU between 2019
and 2023, indicating an interest in continued relationships with Chinese producers. U.S. utilities have also contracted with CGN Global Uranium Ltd., the trading arm of Chinese SOE
China General Nuclear, for certain uranium purchases. Between 2014 and 2018, U.S. utilities purchased 800,000
pounds of uranium concentrate from CGN Global.
As the bulk of Chinas uranium concentrate production is consumed by domestic nuclear power generators, most Chinese exports of uranium will likely be in the form of enrichment services. Domestic Chinese enrichment capacity is increasing faster than domestic demand: By 2020, the countrys enrichment centrifuges will have a total capacity of 12 million SWU, compared to domestic demand of 9
Tinto to sell Rossing stake. World Nuclear News, November 26, 2018. http
www.world-nuclear-news.org/Articles/Rio-Tinto-tosell-Rossing-stake.

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million SWU.152 Chinese producers intend to use this excess capacity to increase the countrys presence in the nuclear fuels trade. A China National Nuclear Corporation CNNC executive remarked in 2013: On the basis of securing its domestic supply of SWU, CNNC will gradually expand its foreign markets and make Chinas fuel industry internationally competitive. 153 Chinas increasing control of global uranium deposits and its excess enrichment capacity will allow it to further enter the nuclear fuels market and undermine U.S. and other market producers.
3. Increasing Global Excess Uranium Production Will Further Weaken the Internal Economy as U.S. Uranium Producers Will Face Increasing Import Competition Continued high levels of production by state-owned enterprises in Russia, Kazakhstan, Uzbekistan, and China will place further financial pressure on U.S.
uranium producers. U.S. uranium concentrate production, which declined by 94 percent between 2014 and 2018, will be non-existent in the near future as subsidized foreign production continues.
Foreign market producers are not immune from the effects of state-owned producers either. As described in Chapter VI, Canadian and Australian producers have had to idle production at their own mines due to poor market conditions. Furthermore, to fulfill contracts with U.S. utilities, Canadian, Australian, and French producers have procured material from state-owned suppliers.
VIII. Conclusion A. Determination Based on these findings, the Secretary of Commerce has concluded that the present quantities and circumstance of uranium imports are weakening our internal economy and threaten to 152 Hui Zhang, Chinas Uranium Enrichment Capacity: Rapid Expansion to Meet Commercial Needs, Cambridge: Harvard Kennedy School, 2015, 32.
153 Ibid., 34.

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In the event of increased political or potential military tensions, Russia could choose to ban uranium exports to the United States; denying U.S. utilities a significant share of their enriched uranium. Russia further possesses the military means to deny U.S. and U.S.aligned countries access to Kazakh and Uzbek uranium exported through Russian ports, principally on the Baltic Sea.147 In either of these circumstances, U.S. utilities would conceivably be denied a significant percentage of their uranium requirements and could face critical fuel shortages.