Centrus signs $900 million DOE contract to scale HALEU production

Centrus Energy is transitioning from a decade-long demonstration program to commercial-scale enrichment of the fuel needed for next-generation reactors.

Centrus Energy signed a final $900 million contract with the U.S. Department of Energy to deploy commercial-scale production capacity for High-Assay, Low-Enriched Uranium (HALEU), the company said July 1. The total enrichment contract, including options for DOE purchases, is valued at $1.07 billion. Centrus completed the final 900 kilograms of HALEU UF6 under its prior demonstration contract two weeks ahead of schedule, bringing cumulative production to more than 1,900 kg.

"This marks another milestone in our expansion, as we pivot from a technology demonstration contract to the new, larger contract aimed at commercial scale production," Centrus President and CEO Amir Vexler said. "The government's investment from this contract will be matched several times over with billions of dollars in capital, including other non-dilutive, non-debt funding as well as customer contracts to restore America's ability to enrich uranium at a large scale."

The new fixed-price contract calls for Centrus to deploy commercial-scale HALEU enrichment capacity at its American Centrifuge Plant in Piketon, Ohio. The initial build-out includes 12 metric tons of annual HALEU production capacity alongside capacity to meet Centrus' existing LEU backlog of $2.4 billion. The first new capacity is expected to come online by 2029. In the interim, Centrus intends to privately operate its existing HALEU cascade on a commercial basis, working with the DOE on agreements including a long-term lease extension for the Piketon facility.

HALEU — uranium enriched to 19.75% uranium-235, compared with 3% to 5% for conventional reactor fuel — is required for most advanced reactor designs under development in the U.S., including small modular reactors (SMRs) and Generation IV systems. Developers such as TerraPower, X-energy, and NuScale Power all depend on HALEU availability for their reactor timelines. Without a domestic supply chain, these companies face fuel availability as a gating factor to deployment. The DOE has identified HALEU as a national security priority, given that Russia's TENEX currently supplies most of the global enriched uranium market.

The expansion project is expected to support 1,000 construction jobs and 300 new operating positions in Ohio, while retaining 150 existing jobs at the Piketon plant. Centrus' centrifuge manufacturing facility in Oak Ridge, Tennessee, will add 430 jobs, with hundreds more across its supplier network. The company said the build-out will allow it to achieve nth-of-a-kind centrifuge manufacturing costs, a milestone that would lower per-unit production costs for subsequent capacity additions.

Centrus faces competition from international enrichment suppliers including Urenco (a British-Dutch-German consortium) and Orano (France), both of which have announced plans to expand enrichment capacity in response to U.S. demand. However, Centrus is the only U.S.-owned company operating enrichment technology under an NRC license, giving it a potential advantage in government procurement. The Inflation Reduction Act included $700 million for HALEU availability, and the DOE has awarded additional contracts to companies such as General Atomics and Laser Isotope Separation Technologies for alternative enrichment methods.

Centrus, which has supplied fuel for more than 1,850 reactor years since 1998, is positioning itself as the sole domestic producer of HALEU at a time when U.S. utilities and reactor developers are seeking alternatives to Russian enrichment services. The company's existing LEU backlog of $2.4 billion provides a revenue base as it scales HALEU production. With the DOE contract now finalized, Centrus has a clearer path to monetizing its centrifuge technology — a program that has consumed more than $2 billion in government and private investment over two decades. The stock (LEU) has been a beneficiary of the broader nuclear renaissance trade, alongside Cameco Corp. and uranium-focused funds, as investors price in the multi-decade demand cycle for enriched uranium.

This article is for informational purposes only and does not constitute investment advice.