The commodity may not attract the headlines of oil, gas or even coal, but it’s crucial for a world desperately in need of carbon-free energy.
While the Kremlin doesn’t appear to be directly behind the coup, its propaganda machine has boosted anti-French and American sentiment all across the Sahel, the area just south of the Sahara. Unsurprisingly, the region has seen a bout of palace revolutions — including in Burkina Faso, Chad, Guinea, Mali and Sudan — since 2020.
In the capital of Niamey, pro-coup crowds have waved the Russian flag to denounce French imperialism. Yevgeny Prigozhin, head of the Russian Wagner paramilitary group, welcomed the military takeover. Wagner already operates in neighboring Mali after the coup there. The long arm of the Kremlin meddles in the geopolitics of energy in many ways — not often in the most obvious ones.If Niger falls into the Russian orbit, the world would depend even more on Moscow – and its clients — for atomic energy. Kazakhstan and Uzbekistan, two former Soviet republics, are among the world’s top uranium producers, accounting for about 50% of the world’s mined supply. Add Russia and Niger to that, and the share jumps to just above 60%. Uranium is only the beginning of what’s called the nuclear fuel cycle. While Russia is also the world’s sixth-largest uranium miner, its real power lies elsewhere in that cycle: the transformation of the commodity into usable atomic fuel rods for civil reactors via so-called conversion and enrichment.Russia accounts for nearly 45% of the global market for uranium conversion and enrichment, according to data from the World Nuclear Association. It’s a stranglehold that has created what US officials recently called a “strategic vulnerability” that’s “unsustainable.” About a third of all the enriched uranium consumed last year by US utilities came from Russia, at a cost of nearly $1 billion paid to a company directly controlled by the Kremlin. More than a year since the Russian invasion of Ukraine, Washington hasn’t banned imports of Russian nuclear fuel.
For the first 50 years of the nuclear age, America was self-reliant, but with the end of the Cold War, it largely abandoned uranium mining, and crucially the complex conversion and enrichment processes. Today, the US is largely “dependent on international sources of nuclear fuel, including nations that do not have our best interests at heart,” according to John Wagner, head of the US Energy Department’s Idaho National Laboratory.How Russia came to dominate the nuclear fuel industry is a mix of geological luck, engineering innovation, and a well-intended diplomatic deal agreed to by Moscow and Washington just after the collapse of the Soviet Union.First, Russia is endowed with uranium deposits, giving it a natural role in the industry. Then, its engineers developed a system to enrich the radioactive material that was significantly less energy-intensive than the method favored by French and American engineers, making it far cheaper.(1) Those factors alone would have given Russia a big role in mining, conversion and enrichment. Then, in 1993, the US and Russia agreed to what’s popularly known as the “megatons to megawatts” program, in which the highly enriched uranium from former Soviet nuclear warheads was transformed into low-enriched uranium and shipped to the US for civilian nuclear plants. Simply put, the US industry couldn’t compete against the Russians, and slowly, it died, to the disinterest of both Democratic and Republican White Houses.
Even before the invasion of Ukraine, the American nuclear industry was raising the alarm for its dependence on foreign sources. Since then, the talk among executives and government officials has been about a crisis. Add now the trouble in Niger, and the situation looks more like an emergency.Yet, resolving it won’t be easy and would require intense cooperation between the US and France – ironically, the two Western powers with the most at stake in Niger(2) .
Washington and Paris could develop a plan to boost production by reopening mothballed nuclear fuel plants, and boost diplomatic and military support to uranium-producing nations, starting in Niger. The effort won’t be cheap. But with Vladimir Putin showing he’s ready to weaponize fossil fuels like oil and gas, the West needs to act before the Kremlin decides to weaponize even the peaceful use of uranium in a way that makes the transition to carbon-free energy even more difficult.
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(1) For decades, Western countries used an enrichment system known as gas diffusion which consumed significantly more electricity than the Russian method using centrifuges. At the peak of the Cold War, about 7% of the total US electricity generation was devoted to uranium enrichment, both for military and civilian purposes.
(2) On top of its uranium mines, Niger is important for both France and the US to support military operations against Islamist groups in the Sahel region. Both Paris and Washington operate military bases for drones in Niger.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. A former reporter for Bloomberg News and commodities editor at the Financial Times, he is coauthor of “The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources.”
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