The business case behind the decision to restart the USA's only domestic uranium conversion facility announced earlier this year rested on suitable answers to several "puzzle piece" questions falling into place, ConverDyn's Malcolm Critchley told the World Nuclear Fuel Cycle forum on 13 April.

Puzzle pieces needed to come together for MTW restart (Image: Converdyn)

Price had not been the only reason behind Honeywell's November 2017 decision to place its Metropolis Works (MTW) plant, which is in Illinois, on "idle standby", Critchley said. An "alarming" picture of the nature of conversion supply was at that time beginning to emerge, with a significant overhang of secondary supplies making a temporary shutdown the best option.

It will cost about USD150 million to restart the plant, Critchley said, so a solid business case was needed to justify the plant's restart. This hinged on multiple pieces coming together: market demand; the outcome of the US Administration's Nuclear Fuel Working Group (NFWG); contracted sales; the status of the US-Russian Suspension Agreement; and the MTW plant itself. The business case constructed by the company addressed each of these pieces in turn.

Recent experiences suggest that Converdyn's action in idling the plant had contributed to a transformation in market fundamentals since 2017. Analysis of market forecasts post-2020 suggest that if MTW was not to restart, a shortfall averaging about 11,500 tonnes per year could emerge. These analyses show that the output of the plant is needed, he said.

The outcome of the NFWG - given large US government inventories of uranium tails and high-enriched uranium - could have been a significant barrier to restarting the plant, he said. Indications over the last year or so from Congress have changed significantly, with "genuine" cross-party support for the nuclear supply chain which seems to have survived the change in the US administration and the recognition of uranium as a critical mineral.

The decision to set up a US domestic uranium reserve and support for high-assay low-enriched uranium programmes to support small modular reactor and defence needs demonstrates the start of "joined-up thinking" in this area, he said, but just as importantly, he said, sales of US government inventory are not seen as being likely, in the current political environment, for the "foreseeable future".

Critchley turned to sales as the next piece in the puzzle. A reduction in long-term contracting in 2016-17, and the "natural reluctance" of customers to enter into long-term contracts with Converdyn, had positioned the company "perilously close to cliff edge", he said. During 2020 it had approached its customers to solicit new business to support restart - a "huge ask" for utilities facing challenges from many directions.

"Suffice it to say, our customers provided sufficient support to justify MTW restart. In the end, the majority of customers shared view that on balance, a restart was the right thing to do," he said.

The October 2020 agreement by the US Department of Commerce and Russian state nuclear corporation Rosatom have to extend the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation, to 2040, formed another piece of the puzzle. Had the extension not been agreed, this could have been a "death knell" for MTW.

The final piece of the puzzle is MTW itself. The plant received a renewed licence from the US Nuclear Regulatory Commission in 2020. In the past, he said, such licences had only been valid for 10 years - and this could have in itself proved a deal-breaker for long-term operations, when considering contracts with a payback period of longer than 10 years. The new licence is valid for 40 years, which removes that uncertainty.

The "sensible objective" is to plan to operate for the plant for the 40-year life of the licence, but this has also meant an increased number of projects must be completed before the plant can restart. In addition, the company is carrying out safety upgrades over and above those required by the regulator to satisfy Honeywell's own safety requirements. These measures mean increased upfront costs - but a better long-term payback, he said.

Honeywell has drawn up a restart plan targeting a production restart in 2023, which Critchley described as an "aggressive" timeline.

With the exception of customer support, which stands out as a very positive contribution to our analysis, the startup justification can be characterised by the removal of a lot of risk and negative assumptions that all came together to allow us to build a positive case.

Metropolis was built in the 1950s to meet military conversion requirements, and began providing UF6 for civilian use in the late 1960s. The plant's output is exclusively marketed by ConverDyn.

Researched and written by World Nuclear News