CEO Articles

China’s strategy no surprise to uranium producers

A frequent geopolitical story throughout 2018 has been the deliberate efforts of Russia and China to undermine U.S. national security.

Using trade and policy programs, they target natural resources industries to gain a military and economic edge. Approaches have varied, but the cold message from these adversaries is consistent: We can hold hostage your energy infrastructure.

In March, officials in the administration of President Donald Trump accused the Russian government of staging a multi-year cyber-attack against the U.S. energy grid and other elements of our critical infrastructure. According to the Department of Homeland Security and the FBI, the infiltration dates back to at least March 2016.

Sadly, the news did not surprise those of us in America’s uranium mining industry. For years, we’ve been sounding the alarm about Russia and its allies sabotaging our energy sector. Relentlessly, state enterprises in Russia and, increasingly, China have been seizing control of U.S. and global uranium markets and other critical pieces of the nuclear fuel cycle.

Uranium – mined in states that include Colorado, New Mexico, Wyoming and Utah – is the crucial element of nuclear fuel. Carbon-free nuclear energy generates 20 percent of the electricity that powers American homes and businesses.

As critical as uranium is to our security, you would think the domestic uranium mining industry would be the primary supplier to U.S. nuclear power plants. But you would be wrong. Free-market uranium production is nearly obsolete.

This year, domestic uranium mining companies will supply less than 2 percent of the uranium used in the U.S. In 2019, that number will plummet to less than 1 percent.

That’s because America’s adversaries’ state-owned enterprises undercut our industry and flood the global market with cheap uranium. Uranium producers in allied countries such as Australia and Canada are closing mines too. Only one uranium mine in Canada still operates today.

None of this is an accident. The destruction of free-market uranium mining is Russia’s and China’s reward for implementing a disciplined strategy.

Rössing, a large Namibian uranium mine owned by Anglo-Australian mining company Rio Tinto, has been a source of U.S. imports since the 1970s. But Rio Tinto is in talks to sell the mine to government-owned China National Nuclear Corporation. If the sale is finalized, China would essentially dominate Namibian production – yet another loss of free-market uranium supply.

A recent Department of Defense-led review of America’s defense industrial base concludes that the Chinese government deliberately leverages its monopoly on key natural resources to undermine U.S. defense infrastructure. China floods world markets with certain materials with the specific goals of undercutting America’s lead in critical capabilities and driving U.S. suppliers out of business.

China is focused on the nuclear sector. The administration says that China has been stealing U.S. nuclear technology to gain a competitive edge and divert our technology to Beijing’s military uses.

It is abundantly clear that relying on Russia and China for critical uranium is dangerous. That is why we applaud the Department of Commerce for undertaking a Section 232 investigation into the effects of uranium imports on national security. We look forward to remedies that will preserve the U.S. uranium mining industry.

The U.S. must put national security above the lure of cheap uranium. There is no choice – the stakes in an ever increasingly perilous world are too high.

Mark Chalmers is president and CEO of Energy Fuels Resources (USA) Inc., and John Cash is president of Pathfinder Mine Corporation.

This article first appeared in The Durango Herald.