Contingent Commitment from KHNP and Other
Customers Now Total $1.8
Billion to Support New, American Uranium
Enrichment
BETHESDA, Md., Sept. 11,
2024 /PRNewswire/ -- Centrus Energy Corp. (NYSE
American: LEU) and Korea Hydro & Nuclear Power (KHNP) announced
today that they have entered into a contingent supply commitment to
support construction of new uranium enrichment capacity at Centrus'
American Centrifuge Plant in Piketon,
Ohio. The purchase commitment from KHNP covers a decade of
deliveries of Low-Enriched Uranium (LEU) to help fuel Korea's large
fleet of reactors.
Centrus has now secured a total of $1.8
billion in contingent sales commitments to date, including
KHNP and, as previously disclosed, other customers, to support
deployment of new capacity. These commitments, including KHNP's,
are contingent upon the parties entering into definitive agreements
and also upon Centrus securing the substantial public and private
investment necessary to build the new capacity.
"This supply commitment is a key building block as we work
toward the public-private partnership that will enable us to
re-establish a large-scale, U.S.-owned uranium enrichment
capability," said Amir Vexler,
President and CEO of Centrus. "We are honored to have the support
of KHNP in this critical endeavor and strongly committed to meeting
their long-term requirements for assured, affordable, supplies of
enriched uranium to fuel their reactors. This commitment, along
with our previously announced commitments from our customers
further demonstrates the private sector's willingness to support
the establishment of an alternate LEU supply source."
"KHNP welcomes the opportunity to deepen our partnership with
Centrus and the United States,"
said Whang Jooho, President and CEO of KHNP. "New production from
Centrus will help bring greater stability, supply diversity and
price competition to global nuclear fuel market, supporting the
long-term growth of carbon-free nuclear energy in Korea and around
the world."
The Path to New, American Enrichment Capacity
Under contract with the U.S. Department of Energy, Centrus has
deployed a cascade of 16 advanced centrifuges at the American
Centrifuge Plant in Piketon, Ohio.
In late 2023, the plant began producing High-Assay, Low-Enriched
Uranium (HALEU), becoming the first U.S.-owned, U.S.-technology
uranium enrichment plant to start production in 70 years.
Subject to securing sufficient funding and purchase agreements,
Centrus plans to scale up the plant with additional centrifuges for
large-scale production of LEU for existing reactors as well as
HALEU for the next generation of advanced reactors.
Deployment of new domestic uranium enrichment will require a
public-private partnership that combines robust federal investment
with private capital and commercial purchase agreements.
Centrus is competing for federal funding under a series of
Requests for Proposals issued the by the U.S. Department of Energy
aimed at jump-starting U.S. production of LEU and HALEU. To date,
the U.S. Congress has provided more than $3.4 billion for this effort.
A photo of a recent visit to Centrus' American Centrifuge Plant
in Ohio by Whang Jooho, President
and CEO of KHNP, is available here.
About Centrus Energy Corp.
Centrus Energy is a trusted supplier of nuclear fuel and
services for the nuclear power industry. Centrus provides value to
its utility customers through the reliability and diversity of its
supply sources – helping them meet the growing need for clean,
affordable, carbon-free electricity. Since 1998, the Company has
provided its utility customers with more than 1,750 reactor years
of fuel, which is equivalent to 7 billion tons of coal. With
world-class technical and engineering capabilities, Centrus is also
advancing the next generation of centrifuge technologies so that
America can restore its domestic uranium enrichment capability.
Find out more at www.centrusenergy.com.
Forward Looking Statements
This news release contains "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and the Private Securities Litigation Reform Act of
1995. In this context, forward-looking statements mean statements
related to future events, which may impact our expected future
business and financial performance, and often contain words such as
"expects", "anticipates", "intends", "plans", "believes", "will",
"should", "could", "would" or "may" and other words of similar
meaning. These forward-looking statements are based on information
available to us as of the date of this news release and represent
management's current views and assumptions with respect to future
events and operational, economic and financial performance.
Forward-looking statements are not guarantees of future
performance, events or results and involve known and unknown risks,
uncertainties and other factors, which may be beyond our
control.
For Centrus Energy Corp., particular risks and uncertainties
(hereinafter "risks") that could cause our actual future results to
differ materially from those expressed in our forward-looking
statements and which are, and may be, exacerbated by any worsening
of the global business and economic environment include but are not
limited to the following: risks related to our potential inability
to secure additional waivers or other exceptions from the ban or
sanction in a timely manner or at all in order to allow us to
continue importing Russian LEU under the TENEX Supply Contract or
otherwise doing business with TENEX or implementing the TENEX
Supply Contract; risks related to TENEX's refusal or inability to
deliver LEU to us for any reason including because (i) U.S. or
foreign government sanctions or bans are imposed on LEU from
Russia or on TENEX, (ii) TENEX is
unable or unwilling to deliver LEU, receive payments, receive the
return of natural uranium hexafluoride, or conduct other activities
related to the TENEX Supply Contract, or (iii) TENEX elects, or is
directed (including by its owner or the Russian government ), to
limit or stop transactions with us or with the United States or other countries; risks
related to the war in Ukraine and
geopolitical conflicts and the imposition of sanctions or other
measures, including bans or tariffs by (i) the U.S. or foreign
governments and institutions such as the European Union, (ii)
organizations (including the United Nations or other international
organizations), or (iii) entities (including private entities or
persons), that could directly or indirectly impact our ability to
obtain, deliver, transport or sell low enriched uranium ("LEU") or
the Separative Work Units ("SWU") and natural uranium hexafluoride
components of LEU delivered to us under our existing supply
contract with the Russian government-owned entity, TENEX,
Joint-Stock Company ("TENEX") ("TENEX Supply Contract"), or make
related payments or deliveries of natural uranium hexafluoride to
TENEX; risks related to laws that ban (i) imports of Russian LEU
into the United States, including
the "Prohibiting Russian Uranium Imports Act" ("Import Ban Act") or
(ii) transactions with the Russian State Atomic Energy Corporation
("Rosatom") or its subsidiaries, which includes TENEX; risks
related to the increasing quantities of LEU being imported into the
U.S. from China and the impact on
our ability to make future LEU or SWU sales or ability to finance
any buildout of our enrichment capacities; risks related to
disputes with third parties, including contractual counterparties,
that could result if we cannot receive, or otherwise are unable to
receive timely deliveries of LEU under the TENEX Supply Contract;
risks related to our dependence on others, such as TENEX, under the
TENEX Supply Contract, a subsidiary of Orano Cycle ("Orano"), under
our long-term commercial supply agreement with Orano, and other
suppliers (including, but not limited to, transporters) who
provide, or deliver, us the goods and services we need to conduct
our business and any resulting negative impact on our liquidity;
risks related to our ability to sell or deliver the LEU we procure
pursuant to our purchase obligations under our supply agreements
and the impacts of sanctions or limitations on imports of such LEU,
including those imposed under the 1992 Russian Suspension Agreement
as amended, international trade legislation and other international
trade restrictions or the Import Ban Act; risks related to whether
or when government funding or demand for high-assay low-enriched
uranium ("HALEU") for government or commercial uses will
materialize and at what level; risks regarding funding for
continuation and deployment of the American Centrifuge technology;
risks related to (i) our ability to perform and absorb costs under
our agreement with the U.S. Department of Energy ("DOE") to deploy
and operate a cascade of centrifuges to demonstrate production of
HALEU for advanced reactors (the "HALEU Operation Contract"), (ii)
our ability to obtain new contracts and funding to be able to
continue operations and (iii) our ability to obtain and/or perform
under other agreements; risks that (i) we may not obtain the full
benefit of the HALEU Operation Contract and may not be able or
allowed to operate the HALEU enrichment facility to produce HALEU
after the completion of the HALEU Operation Contract or (ii) the
output from the HALEU enrichment facility may not be available to
us as a future source of supply; risks related to existing or new
trade barriers and to contract terms that limit our ability to
procure LEU for, or deliver LEU to, customers; risks related to
natural and other disasters, including the continued impact of the
March 2011 earthquake and tsunami in
Japan on the nuclear industry and
on our business, results of operations and prospects; risks related
to financial difficulties experienced by customers or suppliers,
including possible bankruptcies, insolvencies, or any other
situation, event or occurrence that affect the ability of others to
pay for our products or services in a timely manner or at all;
risks related to pandemics, endemics, and other health crises;
risks related to the impact and potential extended duration of a
supply/demand imbalance in the market for LEU; risks related to
pricing trends and demand in the uranium and enrichment markets and
their impact on our profitability; risks related to the movement
and timing of customer orders; risks related to the fact that we
face significant competition from major LEU producers who may be
less cost sensitive or are wholly or partially government owned;
risks that our ability to compete in foreign markets may be limited
for various reasons, including policies that favor indigenous
suppliers over foreign suppliers of goods and services; risks
related to the fact that our revenue is largely dependent on our
largest customers; risks related to our backlog, including
uncertainty concerning customer actions under current contracts and
in future contracting due to market conditions, global events or
other factors, including our lack of current production capability;
risks related to reliance on the only firm that has the necessary
permits and capability to transport LEU from Russia to the United
States and that firm's ability to maintain those permits and
capabilities or secure additional permits; risks related to
uncertainty regarding our ability to commercially deploy
competitive enrichment technology; risks related to the potential
for demobilization or termination of the HALEU Operation Contract;
risks that we will not be able to timely complete the work that we
are obligated to perform; risks related to the government's
inability to satisfy its obligations, including supplying
government furnished equipment necessary for us to produce and
deliver HALEU under the HALEU Operation Contract and processing
security clearance applications due to a government shutdown or
other reasons; risks related to our ability to obtain the
government's approval to extend the term of, or the scope of
permitted activities under, our lease with the DOE in Piketon, Ohio; risks related to cybersecurity
incidents that may impact our business operations; risks related to
our ability to perform fixed-price and cost-share contracts such as
the HALEU Operation Contract, including the risk that costs that we
must bear could be higher than expected and the risk related to
complying with stringent government contractual requirements; risks
related to a government shutdown or lack of funding that could
result in program cancellations, disruptions and/or stop work
orders and could limit the U.S. government's ability to make timely
payments, and our ability to perform our U.S. government contracts
and successfully compete for work; risks related to changes to the
U.S. government's appropriated funding levels for HALEU Operation
Contract due to the upcoming November elections or other reasons;
risks related to attracting qualified employees necessary for the
potential expansion of our operations; risks related to our
long-term liabilities, including material unfunded defined benefit
pension plan obligations and postretirement health and life benefit
obligations; risks related to our 8.25% Notes maturing in
February 2027; risks of revenue and
operating results fluctuating significantly from quarter to
quarter, and in some cases, year to year; risks related to the
impact of financial market conditions on our business, liquidity,
prospects, pension assets and insurance facilities; risks related
to the Company's capital concentration; risks related to the value
of our intangible assets related to LEU's backlog and customer
relationships; risks related to the limited trading markets in our
securities; risks related to decisions made by our Class B Common
Stock stockholders regarding their investment in the Company,
including decisions based upon factors that are unrelated to the
Company's performance; risks that a small number of holders of our
Class A Common Stock (whose interests may not be aligned with other
holders of our Class A Common Stock) may exert significant
influence over the direction of the Company and may be motivated by
interests that are not aligned with the Company's other Class A
stockholders; risks related to (i) the use of our net operating
losses ("NOLs") carryforwards and net unrealized built-in losses
("NUBILs") to offset future taxable income and the use of the
Rights Agreement, dated as of April 6,
2016 to prevent an "ownership change" as defined in Section
382 of the Internal Revenue Code of 1986, as amended (the "Code")
and (ii) our ability to generate taxable income to utilize all or a
portion of the NOLs prior to the expiration thereof and NUBILs;
risks related to failures or security breaches of our information
technology systems; risks related to our ability to attract and
retain key personnel; risks related to actions, including reviews
or audits, that may be taken by the U.S. government, the Russian
government, or other governments that could affect our ability to
perform under our contractual obligations or the ability of our
sources of supply to perform under their contractual obligations to
us; risks related to our ability to perform and receive timely
payment under our agreements with the DOE or other government
agencies, including risks related to the ongoing funding by the
government and potential audits; risks related to changes or
termination of our agreements with the U.S. government or other
counterparties, or the exercise of contract remedies by such
counterparties; risks related to the competitive environment for
our products and services; risks related to changes in the nuclear
energy industry; risks related to the competitive bidding process
associated with obtaining contracts, including government
contracts; risks that we will be unable to obtain new business
opportunities or achieve market acceptance of our products and
services or that products or services provided by others will
render our products or services obsolete or noncompetitive; risks
related to potential strategic transactions that could be difficult
to implement, that could disrupt our business or that could change
our business profile significantly; risks related to the outcome of
legal proceedings and other contingencies (including lawsuits and
government investigations or audits); risks related to the impact
of government regulation and policies or interpretation of laws or
regulations, including by the DOE, the U.S. Department of Commerce
and the U.S. Nuclear Regulatory Commission; risks of accidents
during the transportation, handling, or processing of toxic
hazardous or radioactive material that may pose a health risk to
humans or animals, cause property or environmental damage, or
result in precautionary evacuations, and lead to claims against the
Company; risks associated with claims and litigation arising from
past activities at sites we currently operate or past activities at
sites we no longer operate, including the Paducah, Kentucky, and Portsmouth, Ohio, gaseous diffusion plants;
and other risks discussed in this news release and in our filings
with the SEC.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this
news release. These factors may not constitute all factors that
could cause actual results to differ from those discussed in any
forward-looking statement. Accordingly, forward-looking statements
should not be relied upon as a predictor of actual results. Readers
are urged to carefully review and consider the various disclosures
made in this news release and in our filings with the SEC,
including our Annual Report on Form 10-K for the year ended
December 31, 2023, under Part II,
Item 1A - "Risk Factors" in our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2024, and
in our filings with the SEC that attempt to advise interested
parties of the risks and factors that may affect our business. We
do not undertake to update our forward-looking statements to
reflect events or circumstances that may arise after the date of
this news release, except as required by law.
Contacts:
Investors: Dan
Leistikow at LeistikowD@centrusenergy.com
Media: Lindsey Geisler at
GeislerLR@centrusenergy.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/centrus-and-khnp-sign-long-term-supply-commitment-302244993.html
SOURCE Centrus Energy Corp.