The United States Enrichment Corporation, abbreviated as USEC, has started to spend more money on uranium enrichment services. In the first half of the current year, the company has spent an amount that is almost USD36 million greater than what had been spent in the previous year.

A recent report published by USEC stated that the cost of the separative work unit or SWU, which is required for producing low enriched uranium (LEU), experienced a significant increase between January 2013 and July 2013. Compared to the figure seen during the previous year, the increase is almost three percent. The likely reason for the general upward trend is the Megatons to Megawatts program and the revised Russian-American supply agreement.

Analyses show that the shipments that come under the Megatons to Megawatts program add up to 5.5 million SWU a year. Yet, this program was set to expire by the end of this year.

In March, the United States and Russia signed an LEU supply contract, which will become effective when the Megatons to Megawatts program expires. With regards to uranium enrichment, the USEC has also made agreements with OJSC Techsnabexport (TENEX), which will last for 10 years starting this year. The total costs incurred would be about USD2.8 billion.

Another report indicated that USEC still owes about USD177 million to Russia under its Megatons to Megawatts program. The debt last year was around USD210 million, which is considerably more than what the debt figure became in 2013.

TENEX has been granted permission by the government of Russia to sell uranium under the Megatons to Megawatts program. The company has stated that all shipments under this program will be completed by November of 2013. Subsequent to that date, a new contract would go into force, but TENEX did not share much information on the new arrangement. The company did, however, confirm that everything was proceeding according to plan.

The Megatons to Megawatts program is a contract between Russia and the U.S., the objective of which is to reprocess 500 tons of Russian weapons-grade uranium for sale to America. The uranium to be shipped to the U.S. is extracted from nuclear warheads and processed such that it no longer retains its weapon potency. When this uranium is converted into a diluted form, it can be used as a fuel for nuclear power plants. It was under this contract that the Russian State Nuclear Energy Company recycled the weapons-grade uranium into LEU. Large quantities of LEU have already been transported to the U.S.

Reprocessing naturally results in various expenditures. The most significant of these is the cost of the separation process, which predominantly is a function of the electricity required for the operation of the processing unit.

Frank Rose, who is the Assistant Secretary of State for Space and Defense Policy, stated that it had been almost 20 years since the uranium agreement was made. During this period, more than 470 tons of recycled uranium has been shipped across the U.S. border. The quantity of the uranium shipped would be sufficient to arm 18,900 nuclear warheads.

Like TENEX, USEC is also a primary producer of refined uranium. Other companies that are in the same line of business are Urenco and Areva, which is based in France.