Megatons to Megawatts Eliminates Material for 17,000 Nuclear Warheads

Wed Aug 24, 2011 4:46pm EDT

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Megatons to Megawatts Eliminates Material for 17,000 Nuclear Warheads

USEC Inc. (NYSE: USU) announced today that the Megatons to Megawatts™ program has eliminated 425 metric tons of highly enriched uranium, the equivalent of 17,000 nuclear warheads, by converting it into fuel for commercial nuclear reactors. Megatons to Megawatts is a 20-year, commercially financed government-industry partnership in which 500 metric tons of Russian weapons-grade uranium is being downblended to low enriched uranium for use as commercial reactor fuel.

“Megatons to Megawatts continues to be the most successful non-proliferation program in history as it provides a reliable source of fuel for nuclear power plants while making the world safer,” said John K. Welch, USEC president and CEO.

“The program has served as an important element of USEC’s ability to provide its utility customers with the nuclear fuel and technology solutions they need to power the world through diverse, secure and reliable supply offerings,” said Welch. “Under this program, we have built a strong long-term relationship with our Russian partners, which we expect to continue through our new enrichment supply contract starting in 2013 after the Megatons to Megawatts™ program is successfully finished.”

USEC, as executive agent for the U.S. government, and JSC “Techsnabexport” (TENEX), acting for the Russian government, implement the program, which is on track to complete the downblending of the equivalent of 20,000 nuclear warheads into nuclear fuel by the end of 2013. USEC has paid the Russian Federation more than $7.2 billion for the SWU (separative work units) component of the low enriched uranium delivered since 1995. The fuel generated to date could produce enough electricity to meet the demand from U.S. households for nearly five years and has the energy equivalent of 10.4 billion barrels of oil, or about 29 months of U.S. crude oil imports.

Building on the companies’ long-term relationship, USEC signed a new contract with TENEX in March 2011 for the 10-year supply of low enriched uranium that will provide USEC with continued access to Russian enriched uranium, which currently constitutes about one-half of USEC’s supply source. Under the terms of the new contract, the supply of this low enriched uranium to USEC is expected to begin in 2013 and ramp up until it reaches a level in 2015 that is approximately one-half the level currently supplied under the Megatons to Megawatts program, with the mutual option to increase the quantities up to the same level as under that program. Unlike the Megatons to Megawatts program, the quantities supplied under the new contract will come from Russia’s commercial enrichment activities rather than from downblending of excess Russian weapons material.

USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel and nuclear industry related services for commercial nuclear power plants.

Media: Paul Jacobson, 301-564-3399
Investors: Steven Wingfield, 301-564-3354