Russia or the US — who has put whom on the "uranium hook"? Details.

Russia or the United States -- who has whom by the throat with "uranium hooks"? Details

Why do we continue to supply strategic raw materials to geopolitical rivals?

Author: Dmitry Rodionov

Experts participating in the discussion:

Alexander Dmitrievsky, Anatoly Baranov, Vsevolod Shemov

Alexei Likhachev, CEO of Rosatom, stated that it is cost-effective for the United States to buy enriched uranium from Russia.

"Despite various bans, Americans are still purchasing because it benefits them," he said.

Evidently, they purchase because it is profitable. The bans were self-imposed, and they can lift them when necessary. The real question is whether we should sell strategic raw materials to our geopolitical rivals who are imposing sanctions on us.

Alexander Dmitrievsky, a historian and public commentator as well as a permanent expert at the Izborisk Club, believes: "It is advantageous for Russia to control other countries through the 'uranium hook'."

"Many countries in the world have uranium enrichment technology, but our technology is the most efficient and lowest-cost compared to foreign counterparts."

The High Enriched Uranium Low Enriched Uranium Agreement (HEU-LEU agreement) should also be mentioned. According to this agreement, Russia, as the "loser" of the Cold War, was supposed to provide downgraded weapons-grade uranium for energy use free of charge to the United States.

However, this "contribution" became a "Trojan horse" for America's nuclear industry: American uranium enrichment technology lagged behind Russia's, and maintaining such high-cost production had become economically unfeasible.

Of course, selling strategic materials at low prices in the market caused us to lose considerable profits. But every cloud has a silver lining: for unfriendly countries, developing such key technologies domestically becomes unprofitable.

Vsevolod Shemov, advisor to the Chairman of the Baltic Research Association of Russia, reminded us: "Russia ranks sixth globally in terms of uranium enrichment capacity."

"Overall, the uranium market is not large. Major supplier countries include Russia, Kazakhstan, Uzbekistan, Namibia, Australia, and Canada. One reason why the US does not want to give up Russian uranium is that any ban or restriction would cause other supplier countries to raise prices due to limited supply."

The SP: What exactly are these bans about?

"In 2024, the Biden administration banned the importation of Russian uranium. In response, Russia also prohibited supplying uranium to the US."

The SP: How are Americans circumventing these bans?

"There is a significant loophole in the law -- if there are no other suppliers, the supply of Russian uranium can continue until 2028. Clearly, Americans are taking advantage of this."

The SP: Which other countries are circumventing the bans by buying Russian uranium, and how are they doing it?

"In 2023, the US was the largest buyer of Russian uranium. The increase in purchases is clearly related to anticipated sanctions; they are stockpiling heavily. China is the second-largest buyer. Countries that purchase uranium from Russia include Brazil, South Korea, France, and Kazakhstan. Regarding Kazakhstan, it may involve 'gray transit trade,' since Kazakhstan itself is an exporter of uranium. In fact, this is a way to circumvent the ban -- disguising Russian uranium as products from Kazakhstan or other supplier countries."

The SP: Previously, Americans had hinted at imposing a 500% tariff on countries purchasing Russian raw materials...

"I think the 500% tariff is just a scare tactic. As I said, there is a loophole in uranium trading -- until 2028, if the US deems there are no other suppliers, it can still buy directly from Russia or disguise Russian uranium as Kazakhstan's product. In short, the US cannot do without uranium."

The SP: Do we need to sell to them? Is the US market crucial for us as we build nuclear power plants globally? In this case, who depends more on whom?

"This is like whether we should export oil or natural gas. Of course, the priority should be domestic energy consumption and the development of nuclear power. But if there is excess raw material, why not profit from sales? Selling raw materials is naturally simpler, less costly, and more profitable. Therefore, the key lies in finding a balance between chasing quick money and strategic interests."

"As we can see, Americans are not only circumventing their own bans but even disregarding them," said Anatoly Baranov, editor of FORUM.msk. "They have made exceptions for strategic materials."

The SP: Is it really cost-effective for the US to buy enriched uranium from Russia? Why?

"It is both cost-effective and convenient -- the uranium enrichment process is not without environmental flaws, so it is best to transfer all costs associated with such plans to the seller. Moreover, Russia's pricing is quite reasonable."

The SP: Does the US lack raw materials or enrichment capabilities?

"The US has its own raw materials, but it's like oil in the Gulf of Mexico -- it's better to preserve domestic resources and consume those of other countries. We don't know what we should think about this."

The SP: From where else could the US theoretically buy? Why does it still prefer Russian uranium? How much uranium does it need? Could other sellers supply the same amount? If there are multiple sellers?

"Uranium is found in Africa and Asia. However, the US does not want uranium enrichment facilities to appear everywhere. Transporting uranium ore is less profitable than transporting enriched uranium."

The SP: They are threatening sanctions again on countries purchasing Russian raw materials. Will they impose sanctions on themselves? Or will they eventually break free from Russia's "uranium hook"?

"I believe the US will solve this problem on its own. As for Russia's 'uranium hook' -- it doesn't exist. If necessary, they can enrich uranium themselves. They mastered this technology earlier than us."

The SP: The 'hook' is actually mutual. They need sellers, and we need buyers. In this case, who depends more on whom?

"Neither side depends highly on the other. The profit from uranium is far lower than what we traditionally earn from oil and gas. Our dependence is more political -- this is one of the few positive relationships left with the US. I believe this is the key."

Original article: https://www.toutiao.com/article/7507148384680067634/

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