Energy Fuels and Ur-Energy Jointly File Section 232 Petition with U.S. Commerce Department to Investigate Effects of Uranium Imports on U.S. National Security
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Energy Fuels and Ur-Energy Jointly File Section 232 Petition with U.S. Commerce
Department to Investigate Effects of Uranium Imports on U.S. National Security
Denver, Colorado – January 16, 2018
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels”) and Ur-Energy Inc. (NYSE
American: URG; TSX: URE) (“Ur -Energy”) today jointly submitted a Petition to the U.S.
Department of Commerce (“DOC”) for Relief Under Section 232 of the Trade Expansion Act of
1962 (as amended) from Imports of Uranium Products that Threaten National Security (the
“Petition”).
• Imports of uranium from state -owned and state -subsidized enterprises in Russia,
Kazakhstan, and Uzbekistan now fulfill nearly 40% of U.S. demand, while domestic
production fulfills less than 5%.
• Increasing levels of nuclear fuel are expected to be imported from Russia and China in the
coming years, which will compete directly with U.S. uranium production.
• In 2017, U.S. uranium production fell to near historic lows due in large part to uranium and
nuclear fuel imported from state -subsidized foreign entities; 2018 domestic production is
likely to be even lower.
• A healthy uranium mining industry is vital to U.S. national security, because it supplies fuel
for nuclear power plants that are a key component of the nation’s critical energy
infrastructure and essential defense needs.
• Ur-Energy and Energy Fuels, both headquartered in Denver, Colorado, are the two main U.S.
uranium producers, together supplying more than half of all U.S. uranium in 2017.
• Energy Fuels and Ur-Energy have filed a Section 232 Petition requesting (1) the Department
of Commerce to investigate the effects of uranium imports on U.S. national security and (2)
the President to use his authority to adjust imports to ensure t he long-term viability of the
U.S. uranium mining industry.
• Energy Fuels and Ur -Energy have proposed sensible remedies that will support a viable
domestic uranium mining industry with a negligible impact on U.S. nuclear utilities.
Uranium is primarily use d as the fuel for non- emitting, zero -carbon nuclear energy, but also
plays a key role in national defense. According to the Nuclear Energy Institute, nuclear energy
provides about 20% of all electricity, and nearly 60% of the carbon -free electricity, generated in
the U.S. Uranium is also the backbone of the U.S. nuclear deterrent and fuels ships and
submarines in the U.S. Navy. Despite uranium’s critical role in supporting clean electricity and
national defense, imports of cheap, foreign state -subsidized ur anium have swelled in recent
years to the point that domestic suppliers currently provide less than 5% of our nation’s
demand. As recently as 1980, U.S. producers supplied nearly 100% of our domestic uranium
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needs, and in 1989 the DOC initiated a Section 2 32 investigation at the request of the U.S.
Department of Energy (“DOE”) because of concerns that uranium imports exceeded 37.5% at
that time. The problem is far worse now.
In 2016, the combined uranium imports from three geopolitically and commercially linked
countries – Russia, Kazakhstan, and Uzbekistan – fulfilled nearly 40% of U.S. requirements.
While the U.S. does not import significant quantities of uranium from China at this time, China
has significantly grown their state -owned nuclear enterprises and announced that they intend
to penetrate the U.S. nuclear market with nuclear fuel that will compete directly with U.S.
uranium miners. Further, the approaching expiration of the Russian Suspension Agreement will
remove existing limits on Russian urani um imports. This will create additional pressure on U.S.
uranium producers, as Russia has announced plans to increase its U.S. market share after that
agreement expires in 2020.
Today’s extreme dependence is not a matter of foreign competition legitimately underpricing
domestic production. It is the result of certain foreign state -subsidy policies that undermine
U.S. companies who could otherwise compete fairly on a global basis.
The Petition filed today is a response to this threat to U.S. energy and na tional security. The
Petitioners urge Commerce Secretary Ross and President Trump to act decisively to help
restore the long -term viability of the U.S. uranium mining industry. Without a viable nuclear
fuel cycle, the commercial and nuclear capabilities of the U.S. will be diminished, and the nation
is likely to become 100% dependent on foreign parties that compete with the U.S. for
geopolitical influence and commercial advantage to fuel a majority of our clean, baseload
electricity. Further, international treaties require that the uranium necessary for defense
programs be sourced from the U.S. Unless steps are taken now to foster a healthy domestic
uranium mining industry, the defense stockpiles currently held by the DOE will be depleted, and
it is unlikely that domestic producers will have sufficient capabilities to meet our defense needs
in the future.
Legal Basis and Process
The Petition was filed by Energy Fuels and Ur -Energy pursuant to the Trade Expansion Act of
1962, as amended (the “Act”), and 15 C .F.R. § 705.5. The Act was promulgated by Congress to
protect essential national security industries whose survival is threatened by imports. As such,
the Act authorizes the Secretary of Commerce (the “Secretary”) to conduct investigations to
evaluate the effects of imports of any item on the national security of the U.S. In the Petition,
Energy Fuels and Ur -Energy describe in detail how the loss of a viable U.S. uranium mining
industry would have a significant detrimental impact on the national, energy, an d economic
security of the U.S. and the ability of the country to sustain an independent nuclear fuel cycle.
Once the DOC initiates an investigation, the Secretary has 270 days to prepare a report to the
President. Following receipt of the Secretary’s rep ort, the President then has 90 days to act on
the Secretary’s recommendations, and if necessary take action to “adjust the imports of an
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article and its derivatives” and/or pursue other lawful non -trade related actions necessary to
address the threat.
Benefits of Trade Remedies
The Petition seeks remedies which will set a quota to limit imports of uranium into the U.S.,
effectively reserving 25% of the U.S. nuclear market for U.S. uranium production. Additionally,
the Petition suggests implementation of a requirement for U.S. federal utilities and agencies to
buy U.S. uranium in accordance with the President’s Buy American Policy. These remedies are
expected to result in U.S. utilities purchasing approximately 12 million pounds of uranium per
year from U.S. production, based on recent data. This would be expected to create a healthy
U.S. uranium mining industry, bolster national defense, and improve supply diversification for
U.S. utilities and their customers. Greater diversification will lessen the exposu re of the U.S.
government, U.S. utilities and their customers to the policies of nations like Russia, Kazakhstan,
and China. U.S. utilities and their customers will also receive greater protection from supply
shocks, price increases, and other geopolitically motivated actions of foreign state -controlled
uranium producers. Likewise, a strong domestic uranium mining industry will be able to reliably
supply the required domestic uranium that is critical to our national defense programs. The U.S.
government will provide support to a vital national security industry, while maintaining a high
degree of competition that encourages innovation and lower prices. These remedies will reduce
dependence on imports that fuel clean energy, and support reductions in air poll ution and
carbon emissions.
U.S. uranium producers will continue to compete with global uranium producers, but on a more
level playing field. U.S. production will come from existing U.S. producers, from other U.S.
producers that are on standby as a result of low uranium prices, and from new U.S. producers.
Pricing for U.S. uranium would be expected to increase through domestic competition to levels
more consistent with un -subsidized global costs of uranium production, but not to a level that
will have a significant impact on the bottom lines of U.S. utilities or the rates their customers
pay. An econometric model included in the Petition demonstrates that the average price impact
to consumers will be negligible.
Additional information regarding the trade a ction, including the full text of the Section 232
Petition, can be found on the companies’ respective websites shown below. There can be no
certainty of the outcome of the investigation or the recommendation of the Secretary, and
therefore the outcome of this process is uncertain.
About Energy Fuels: Energy Fuels is a leading integrated U.S. uranium mining company,
supplying U3O8 to major nuclear utilities. Its corporate offices are in Denver, Colorado, and all of
its assets and employees are in the western United States. Energy Fuels holds three of America’s
key uranium production centers, the White Mesa Mill in Utah, the Nichols Ranch Processing
Facility in Wyoming, and the Alt a Mesa Project in Texas. The White Mesa Mill is the only
conventional uranium mill operating in the U.S. today and has a licensed capacity of over 8
million pounds of U 3O8 per year. The Nichols Ranch Processing Facility is an in- situ recovery
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production center with a licensed capacity of 2 million pounds of U 3O8 per year. Alta Mesa is an
in-situ recovery production center with a licensed capacity of 1.5 million pounds of U 3O8 per
year, which is currently on care and maintenance due to low uranium prices. Energy Fuels also
has the largest uranium resource portfolio in the U.S. among producers, and uranium mining
projects located in a number of Western U.S. states, including one producing in- situ recovery
project, mines on standby, and mineral properties in various stages of permitting and
development. Energy Fuels also produces vanadium as a co -product of its uranium production
from certain of its mines on the Colorado Plateau, as market conditions warrant. The primary
trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol
“UUUU”, and the Company’s common shares are also listed on the Toronto Stock Exchange
under the trading symbol “EFR”. Energy Fuels’ website is www.energyfuels.com.
About Ur-Energy: Ur-Energy is a U.S. uranium mining company with corporate and operations
offices in Denver, Colorado and Casper, Wyoming. Ur -Energy operates the Lost Creek in -situ
recovery uranium facility in south- central Wyomi ng. Ur -Energy has produced, packaged and
shipped more than two million pounds from Lost Creek since the commencement of operations.
Applications are under review by various agencies to incorporate Ur -Energy’s LC East project
area into the Lost Creek permits, and the company has begun to submit applications for permits
and licenses to construct and operate its Shirley Basin Project. Ur -Energy is engaged in uranium
mining, recovery and processing activities in the United States, including the acquisition,
exploration, development and operation of uranium mineral properties. The primary trading
market for Ur- Energy’s common shares is the NYSE American under the trading symbol “URG;”
Ur-Energy’s common shares also trade on the Toronto Stock Exchange under the tr ading symbol
“URE.” Ur-Energy’s website is www.ur-energy.com.
Cautionary Note Regarding Forward-Looking Statements: Certain information contained in this
news release, including any information relating to: the expected increases in foreign state -
subsidized imports of uranium in coming years; the expected furthe r negative impacts of such
imports on U.S. uranium production and national security, including the depletion of stockpiles
held by the Department of Energy; the potential of the U.S. to be unable to sustain an
independent nuclear fuel cycle and to become 1 00% dependent on foreign parties; the outcome
of the Department of Commerce Section 232 investigation, including whether or not the
Secretary of Commerce will make a recommendation to the President and the nature of the
recommendation; whether or not the P resident will act on the recommendation and, if so, the
nature of the action and remedy; the expected benefits of the proposed remedies, including: the
expected impacts on U.S. production and the U.S. uranium mining industry, the expected
impacts on purchases of U.S. production by U.S. utilities, the expected impacts on supply
diversification and the expected benefits of such diversification on domestic utilities and
national defense, the expected ability of the U.S. uranium mining industry to reliably supply the
required domestic uranium production, the expected impact of the proposed remedy on
improved competition, innovation and lower prices, and the reduction of dependence on
imports; the expected impact on pricing for U.S. uranium production and the negligible price
impact on electricity rates paid by consumers; and any other statements regarding Energy Fuels’
or Ur- Energy’s future expectations, beliefs, goals or prospects; constitute forward- looking
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information within the meaning of applicable securitie s legislation (collectively, "forward -
looking statements"). All statements in this news release that are not statements of historical
fact (including statements containing the words "expects", "does not expect", "plans",
"anticipates", "does not anticipate ", "believes", "intends", "estimates", "projects", "potential",
"scheduled", "forecast", "budget" and similar expressions) should be considered forward-looking
statements. All such forward- looking statements are subject to important risk factors and
uncertainties, many of which are beyond Energy Fuels’ and Ur -Energy’s ability to control or
predict. A number of important factors could cause actual results or events to differ materially
from those indicated or implied by such forward- looking statements, inclu ding without
limitation factors relating to: the expected increases in foreign state -subsidized imports of
uranium in coming years; the expected further negative impacts of such imports on U.S.
uranium production and national security, including the deplet ion of stockpiles held by the
Department of Energy; the outcome of the Department of Commerce Section 232 investigation,
including whether or not the Secretary of Commerce will make a recommendation to the
President and the nature of the recommendation; whether or not the President will act on the
recommendation and, if so, the nature of the action and remedy; the expected benefits of the
proposed remedies; the expected impact on pricing for U.S. uranium production and the
negligible price impact on electricity rates paid by consumers; and other risk factors as described
in Energy Fuels’ and Ur -Energy’s most recent annual reports on Form 10 -K and quarterly
financial reports. Energy Fuels and Ur-Energy assume no obligation to update the information in
this co mmunication, except as otherwise required by law. Additional information identifying
risks and uncertainties is contained in Energy Fuels’ and Ur -Energy’s filings with the various
securities commissions which are available online at www.sec.gov and www.sed ar.com.
Forward-looking statements are provided for the purpose of providing information about the
current expectations, beliefs and plans of the management of Energy Fuels and Ur -Energy
relating to the future. Readers are cautioned that such statements may not be appropriate for
other purposes. Readers are also cautioned not to place undue reliance on these forward-
looking statements, that speak only as of the date hereof.
For Further Information, Please Contact:
Karen Heinold
202.379.6358