Building a domestic nuclear fuel supply chain

Even as momentum grows for U. S. nuclear, the fuel supply chain is often overlooked. This dynamic is shifting as the industry wakes up to critical choke points and a heavy reliance on countries like Russia for enrichment. As America aims to reduce geopolitical dependency in energy, fixing these domestic gaps has become a strategic priority. In this episode — a companion to a separate episode of Catalyst focused on nuclear waste — Shayle Kann speaks with Scott Nolan, the CEO of General Matter. The company is focused on enrichment, one of the most acute risk areas in the supply chain. Shayle and Scott also discuss the big-picture state of nuclear fuel, from mining to advanced reactor requirements. The two cover topics like: The five-step nuclear fuel supply chain America’s continued reliance on Russian enrichment: The history of enrichment decline in the US The "chicken or egg" problem for advanced reactors Distinctions between LEU and HALEU fuel Enrichment’s toll-service business model The strategic importance of General Matter’s enrichment facility in Paducah, Kentucky Catalyst: The state and future of nuclear waste Catalyst: The path to market for new nuclear reactors Catalyst: The US nuclear groundswell Open Circuit: Inside Meta’s massive nuclear push Open Circuit: Fear and loathing at the Department of Energy Latitude Media: What TerraPower’s big milestone says about future nuclear projects Latitude Media: Commonwealth Fusion Systems launches digital twin with Nvidia and Siemens Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Catalyst is brought to you by FischTank PR, an award-winning climate and energy tech, renewables, and sustainability-focused PR firm dedicated to elevating the work of both early-stage and established companies. Learn more about their PR approach and how they can support your company’s messaging by visiting fischtankpr.com. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:08Shayle Kann?

  I'm Shayle Khan. I lead the early-stage venture strategy at Energy Impact Partners. Welcome to Catalyst. So for all the talk about a nuclear renaissance that maybe, hopefully, is coming in the US and actually is already here in places like Korea and in China, I don't think there's enough talk about the fuel supply chain. Last week, we talked about the end of that supply chain, which is waste. But at the front end, which is how do we get from mined uranium to fuel that goes into a nuclear reactor? That has been changing a little bit. People are talking about it more, especially as folks start to wake up to the choke points that currently exist in that supply chain and our reliance in certain areas of that supply chain on countries like Russia, surprisingly enough,

• 0:50Shayle Kann?

  and what that means for the geopolitics of energy in an era of nuclear power expansion. The last thing we want, obviously, is to scale up an industry that introduces a new supply chain dependency that we're going to regret later. So clearly, better to fix it now. That is what Scott Nolan, our guest today and the CEO of General Matter, is looking to do. He's focused on a specific part of that supply chain, enrichment, which, as you'll hear, is one of the areas where that risk is most acute. But Scott and I talk bigger picture as well, everything from mining to fuel. That's coming up after the break.

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• 3:05Shayle Kann?

  Scott, welcome.

• 3:07Speaker 03

  Thank you. Thanks for having me on.

• 3:09Shayle Kann?

  All right. Let's start by having you give me a walkthrough of the uranium fuel supply chain, the nuclear fuel supply chain. So like, take me from soup to nuts. What do we start with and what do we end with?

• 3:21Speaker 03

  Yeah, happy to. I mean, the background is that every reactor needs fuel, as most people know. And we can talk about types of fuel, but all fuel in reactors in the US today is made using a five-step process. So step one is you mine uranium out of the ground. You then convert it to a gas. That's called the conversion step. You then enrich it, which is really refining separation step. You then de-convert it into a solid, back into a solid. And with that solid, you then make fuel, fuel fabrication. So fuel pellets, or trisoparticles, or whatever that is. So five steps total. The US does all of the steps. The US does not do the middle step at commercial scale. So that's where the bottleneck is, which I'm sure we'll talk about today.

• 4:07Shayle Kann?

  Yeah, so let's get straight to the geopolitics, I guess, or at least the geography of it. So as it stands today, what's a typical supply chain look like, starting from mining through to ultimately usage in a reactor?

• 4:20Speaker 03

  Yeah, so with mining, US gets mined product from a bunch of sources, including from mines in the US. But Canada is a very large producer and Kazakhstan's a large producer. And Australia also has great deposits. But if you look at today, it's really Kazakhstan, Canada are going to drive it for the US. That's where we get most of the U308 that we consume. Conversion is also international. We have one facility doing conversion in the US. That's Honeywell, sold under Converdyne in Southern Illinois. It's actually five miles from where our facility is. So that's in Metropolis, Illinois.

• 5:02Speaker 03

  You also have conversion in Canada, outside Toronto, done by Cameco. And then you've got the Europeans who also do conversion. And so

• 5:11Shayle Kann?

  Could we pause on that one for one second? That's, you know, we're going to talk more about enrichment because that's what you're focused on. But just spending a moment on conversion? That is crazy. There has been one conversion plant owned by Honeywell and spun out Alice Solstice Advanced Materials, operating in the US, as you said, in Illinois for what, like 50 years or some crazy long creative time? Literally only one that continues to operate. And I think they recently announced that they're expanding capacity by like 20% or something like that. But I mean, you know, you're obviously focused on like alleviating a supply chain bottleneck, as we will soon talk about. How big a challenge do you think that one is?

• 5:49Speaker 03

  Yes, I mean, the whole history on the facility, like you said, you know, 50, 50 plus years of operations, originally a joint venture between General Atomic and Honeywell. And then it was, it was always marketed under, under Converdyne, which was really the, the sales arm of that joint venture. And then, like you said, spun out under Solstice. So as, you know,

• 6:12Speaker 03

  In the 2010s, as the market hit a rough patch and just there wasn't a belief that there was going to be expansion of nuclear and people's inventories swelled, the conversion market had a tough time and that facility was actually mothballed. And then it was brought back and so it's been, it's been getting ramped back up the last couple of years. I think that's where you're referring to is working all the way towards nameplate capacity and then potentially further. And so, so we've, we've seen that facility expand production. They've had some great wins on that front the last couple of years. But, you know, there's going to be a limit to how far they can expand it at that site. And so, you know, enrichment's, enrichment's really the main bottleneck in the industry,

• 6:54Speaker 03

  certainly in the domestic industry. Conversion's probably the second. And there's been a few people that have been talking about building new conversion facilities. So we think it's something that'll get solved over the next five to 10 years.

• 7:03Shayle Kann?

  Again, we'll get to enrichment in just a moment. But so the output of a conversion facility is what you purchase. How much do you, I mean, you know, if, if, if we don't expand conversion, let's say in the US and that Honeywell plant continues to operate, but we do see more demand for new nuclear, more demand for new nuclear fuel, you guys scale up and want to continue to scale up. How big a challenge is it for you that there is this like fixed limited conversion capacity in the US? Presumably you can go buy, UF6 is what comes out of a conversion facility. You can go buy it from Canada or Kazakhstan or whatever, but is that problematic? Is that hard to do?

• 7:40Speaker 03

  We're not too worried about it. So, you know, we've looked carefully at that market today. There's still spare capacity. There's still a good amount of inventory in the market. And so we think that it can support a certain amount of US enrichment expansion, but at some point, you know, post like a doubling of US enrichment on US soil, you're probably looking at needing to expand conversion in one way or another. And if you looked at the, NEI did a survey on this. Nuclear Energy Institute, they did a survey, I believe it was last year, on people's concerns of bottlenecks in the supply chain by utilities. And I believe that the utilities all converge on conversion being the next

• 8:25Speaker 03

  big bottleneck that would have to be solved. In response to that, there's a few companies that have been talking about building conversion facilities and conversion is a relatively known process. It's done without a lot of technical difficulty in Europe and in Canada and even in the US. And so we expect that that'll get done and it'll be a bottleneck that's removed as the market needs it to be within the next five years, five to 10 years.

• 8:52Shayle Kann?

  Okay, so, so one way or another, somebody does conversion, you get UF6. Okay, so then now we go to enrichment, which is your focus. What is the, what happens in enrichment? First of all, and then we can talk about where it happens.

• 9:06Speaker 03

  Right, and so to go back to one thing you were saying, just the chemistry of all this. So you mine product out of the ground. It's really a mining and milling step. They're originally two separate steps back when you used, you know, traditional mining. Now, most people are doing in situ recovery, ISR. And so that's more of, you know, like a pumping and extraction process. And so milling and mining are now combined into one step where the output is yellowcake, U308. And then going through the conversion process, what you're doing is stripping off the oxygens and adding fluorine. And so you go from U308 to UF6. And so that's the chemical that we use in our process. That's what utilities bring us.

• 9:49Speaker 03

  So I think, I think you said, hey, that's, that's the material that you buy. Due to the way that the fuel buying process works, in most cases, the utility actually buys it and brings it to us. And we're doing a service to that, to that product.

• 10:02Shayle Kann?

  Which is super interesting. So the enrichment process is more like tolling than anything else. The ultimate end customer, which is the nuclear plant operator, buys, they don't buy fuel.

• 10:15Shayle Kann?

  Ultimately, they buy a precursor to fuel and then toll it through an enrichment facility.

• 10:21Speaker 03

  Yep, so utilities generally purchase the uranium, they hold title in the uranium, and then everything downstream of the mining step, the procurement of the U308 is really an upgrade service to that uranium. And so everything downstream is basically a tolling operation that services, you know, per kilo or per some other unit operation. And so for our operation, it's something called separative work units. And so you can think of it as degree of entropy reduction times the amount of mass. And so we're getting paid for reducing entropy, or separating, or refining. You know, all these are essentially the same

• 10:59Speaker 03

  thing. And so what our operation does is we take in, you know, UF6. And if we're making LEU, it's traditionally going to come in as natural UF6, which is 0.711% U235, the rest U238. And what you do in enrichment is you enhance, you enrich the amount of that material that's U235. That's the fissile material. That's what you need to make working uranium-based nuclear fuel. And that's what we're trying to enrich. And so through this process, you're essentially separating a gas. And you're separating it again and again until you have

• 11:44Speaker 03

  the level of U235 that you want, which can be about 5%, 3% to 5% if you're doing low-enriched uranium for a traditional reactor, or it can be as high as 19.75% for HALU, high assay LEU for advanced reactors.

• 12:00Shayle Kann?

  Yeah, I want to talk about that LEU and HALU bit in just a moment, but just to contextualize for everybody, if you were theoretically making weapons-grade uranium, how much enrichment would you need to do?

• 12:11Speaker 03

  Well, weapons-grade is anything above 20%. And so the amount of enrichment-

• 12:17Shayle Kann?

  Right, so you're sub-weapons-grade in any of these cases?

• 12:19Speaker 03

  Yeah, and weapons-grade is considered above 20%. So how far you take it, you know, that's what's going to determine how much more enrichment you need to do. But it's essentially, all enrichment is, you know, a repeated process of refining until you get to the level that you're seeking.

• 12:38Shayle Kann?

  Okay, so back to the supply chain then. So we mine our uranium, maybe in the US, but probably in Canada or in Kazakhstan. We convert it, again, maybe in the US through one facility, but more likely, again, in Canada or in Europe. Where then, today, does the enrichment typically take place?

• 12:54Speaker 03

  Yeah, so this is what really put us onto this problem and deciding, hey, we need to really start a company to address enrichment in the US, was if you look at enrichment today and what the US consumes, it's about 75% Europe, European producers, and it's about 25% Russia. And so we can talk about the history of how we got here, but there's no commercial at-scale US producer operating anywhere. There is one facility in the US that's run by a European firm called Urinko down in New Mexico, and that produces about 20% of US demand, but the other 80% is coming from

• 13:36Speaker 03

  overseas, and a full 20-25% is Russia, depending on the year.

• 13:41Shayle Kann?

  Yeah, let's talk about that Russia thing for just a minute. Has the US industry's ability to purchase or toll, I guess, through Russian enrichment facilities, has that changed over time as the US-Russian relations have moved? Like, I get the sense it's one of these areas that, like, we kind of don't like to talk about it because we're sort of reliant on Russia to some extent right now, but we need it, you know, and so we're sort of unwilling to sanction it or stop buying from Russia. Is that, do I have that sort of right?

• 14:16Speaker 03

  Well, in 2024, there was a Russian uranium imports ban passed by Congress. And so there's a waiver process that's ongoing right now, where the Secretary of Energy can waive the ban if a utility needs it and there's not another source, which has been the case. That waiver process expires January 1st, 2028. And so the setup today is, yes, it's still three-quarters Europe, one-quarter Russia. Most of that Russian uranium is coming in, it's all coming in under those waivers. I think it's gone from about 25% to 20% as utilities look to diversify and get ahead of the full 2028 ban. But- That is currently the breakdown.

• 15:01Speaker 03

  A lot of people have asked, how do we even get here? How is it the case that we're still importing from Russia? You have to go all the way back to the fall of the Berlin Wall, the end of the Cold War. So eighties, the US was the leader in global enrichment, something like eighty-six percent at the peak. And then the Berlin Wall fell and we entered a treaty with Russia, which was called the megatons to megawatts program. And in that, in that trade program, we imported Russian warheads. We downblended them and used, used that downblended material to run our reactors. We then, you know, sent the depleted uranium back to Russia to be, or the,

• 15:44Speaker 03

  we sent the depleted uranium back to Russia to be enriched. And so they built up a large enrichment capability over time, using gas centrifuges while the US was still doing gaseous diffusion, which was a first generation technology. And so then over the subsequent, you know, 20 years, the US progressively shut down its own enrichment, first privatizing and then realizing it was just really hard to operate profitably in the face of European producers and Russian enrichment, who were both using gas centrifuges, which was again, generation two technology, which was superior to the generation one gaseous diffusion that the US was using. And so we went from a place of eighty-six percent global market share

• 16:26Speaker 03

  down to less than a point one percent today by US companies or US entities. And so that's the state of things. You know, from the utilities point of view, they, they do need enriched uranium to, to feed the reactors and we don't want the grid to have brownouts just due to not having fuel for them. And so they've, they've used the waiver process to bring in Russian uranium. And, you know, now, now we're facing the 2028 cliff. And so really it's, how do we, how do we fill this L U supply gap? That's coming our way in 2028. And ideally doing it with domestic sources.

• 17:05Shayle Kann?

  Okay, so I want to finish the supply chain and then come back to the different fuel types, LEU and HALU, and what that means for enrichment. But just to finish the the supply chain side of it, so you you do the enrichment and then you have to do deconversion, right? Does deconversion normally happen in a centralized facility? Is it onsite, near the reactor? What does that final step look like?

• 17:27Speaker 03

  That's that's the second to last step. You still have the fuel fabrication step, and they're usually co-located. So the deconversion step does not take up a lot of acreage, and it's usually combined with the fuel fabrication step. And so a lot of a lot of times, those are referred to as the same step, or at least priced as as the same step.

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• 20:01Shayle Kann?

  Okay, so then back to enrichment. There are, broadly speaking, two categories of fuels that at least I know you're focused on and that I think matter from the perspective of the industry. One, which is the incumbent fuel, LEU, and then the second, which is for kind of the next gen, the Gen 4 reactors, which generally run on HELO. Can you just walk me through the difference between those two, and both in general, and then like what it means for what you have to build for enrichment capacity?

• 20:30Speaker 03

  Right. Yeah, so like you said, there's really two types of fuel, LEU and HELO, that are used in nuclear energy, which is what we're focused on. LEU is anywhere from 3% to 5% enriched of U235 by weight. HELO is technically anywhere 5% to 20%, but really it's typically going to be 15% to 19.75%. And the reason it's 19.75% is you want to keep some buffer against the 20% that really triggers weapons-grade classification and a whole bunch of international standards. And so the reason that there's two different levels, if we go back to the underlying tech,

• 21:14Speaker 03

  the traditional reactors that you have that are gigawatt scale and are very large, you know, those have a large core, and so they don't need a lot of enrichment to get fuel to go critical. You have a larger amount of fuel in there, and it can burn for a longer period of time with still pretty good efficiency. And so that's traditionally been done to 3% to 5%. As we look to factory build reactors and make them smaller, the core has to get smaller. And so to get get criticality, to get good burn up and refueling cycles that work for SMRs, you end up wanting to go higher and people have chosen to go in some cases 15, 16%.

• 21:58Speaker 03

  In most cases, though, all the way to 19.75. So most of the advanced reactors that you hear about are going to be using 19.75 enriched fuel. And, you know, we're making both of those.

• 22:10Shayle Kann?

  And let's be clear on what we talked about with the existing supply chain. I mean, basically, everything we're talking about, the existing supply chain is LEU.

• 22:17Speaker 03

  That's right.

• 22:18Shayle Kann?

  Partially because there are those advanced reactors don't mostly exist yet, or at least they're not commercial in the market. But HALU, there is zero current capacity or essentially zero. I mean, walk me through like, if I wanted to go buy HALU tomorrow, what would that look like?

• 22:34Speaker 03

  You would have to purchase it from Russia. And so that's what actually triggered me looking into the space. So if we rewind to like, late 2022, at Founder's Fund, I was in, you know, looking at all the advanced reactors companies deciding to invest in one. I asked them what the hardest thing about building their company was going to be, and it was purchasing fuel, it was obtaining HALU. And they said, the only place we can get it is actually Russia, and we have to import it. And so I said, well, why don't, why don't you just get the US companies to to make HALU? Is it that much harder to go to a higher level? And they said, there, there really is no US owned production. And so that kicked this all off. And I, I realized pretty quickly that, that Russia was the

• 23:16Speaker 03

  only source. And unless there was a new source that came online very soon, really by end of decade, all the advanced reactor companies would, would have a hard time scaling up. And so, you know, fast forward to today, the DOE has actually stepped up and made some HALU available to advanced reactors. But that's, that's really only going to take them through first demonstrations, first deployments, to really scale up, will need a new supply. And so you have Europe saying that they're going to bring capability online in Europe in the early 2030s. And then the other two companies saying that they're, you know, who are planning to produce

• 23:58Speaker 03

  HELO is us at our facility in Paducah, Kentucky. And so we'll bring, we'll be bringing that online by the end of the decade. And then Centrus, the US incumbent, has also been working on HELO capacity and, and, and planning to scale that up.

• 24:16Shayle Kann?

  So for you, I mean, I think you could imagine to a first order that, okay, if you're, if you're going to do enrichment and you're going to make LEU and then you just need to go further, enrich more to get to HELO, you just run more separation steps, you run your system for longer and it's one system, but you enrich to whatever degree you need to enrich to. My understanding from chatting with you is it's not actually quite that simple and, and it is kind of a different process, or at least you want different equipment if you're going to be producing LEU versus HELO. So at the high level, can you just walk through like, are those the same process run at different frequencies or for different lengths? Or is it actually a different process?

• 24:56Speaker 03

  I think the, the thing to remember is this is all really just a separation, distillation process. And so producing HELO, you typically ingest LEU and then you'll enrich that up to HELO. And so it's, it's really a repeated process. Now, the things that are different, the important things that are different are around criticality and licensing. And, you know, the licensing is different to reflect the, the criticality difference and, and so a few other differences. But fundamentally, the process does not have to change from a physics standpoint. What does have to change is things like you mentioned, things that

• 25:36Speaker 03

  hold uranium, a certain volume of uranium may need to be smaller in the case of HELO to make sure that you can't have accidental criticality and that you're ensuring safety. But I would say that that's the primary, primary difference between the two is, is criticality considerations, which is, which is why you see, you know, in the past couple of years, the DOE putting out awards for HELO enrichment specifically and LEU enrichment capability, and then also HELO deconversion. And so that last step that you asked about, those last two steps of deconversion and fuel fabrication. As you bring HALU UF6 down into solid form, you're now getting even more density of uranium.

• 26:22Speaker 03

  And so as it's at a HALU level, you know, up to 19.75% U235, and you're bringing that back into a solid, that's where you have to be a little bit more careful about your processes and equipment.

• 26:34Shayle Kann?

  I'm interested from like a business and market perspective. It feels like LEU and HALU are in such different places, right? LEU, you've got this like firm, stable demand of the existing reactor fleet that is operating. And it could grow because we're going to build some new reactors over time. But, you know, from a large base, so incrementally, it's not going to be that much. So you kind of know how much HALU, or sorry, how much LEU demand there is right now. And so you could come in and just like supplant part of the existing supply chain there, hopefully the 25% that we get from Russia. Whereas HALU, it's starting from essentially zero. And it's also kind of a chicken or egg question with a bunch of advanced reactors of like, those things need to come online. They need to scale up at some rate. We don't know exactly what rate they're going to scale up at.

• 27:18Shayle Kann?

  And so you're going to produce capacity to make HALU. And you have to calibrate the amount of capacity to what demand there actually will be. And as you said, you're sort of planning to bring this online at the end of the decade. But like, I would say the error bars on how much HALU demand there is in 2030 or 2031, 2032, whatever, in the early years of this, the error bars seem pretty big. So I wonder how you think about that. Like, you're simultaneously building a kind of a step in a very stable supply chain with a lot of need because of the geopolitics of it. And then also building into this like, speculative is the wrong word, but like very uncertain future.

• 27:58Speaker 03

  Yeah, on the HALU side, we are very, you know, very bullish on advanced reactors. We think that they're going to surprise everyone in their deployment speed and scale up. And, you know, just looking at the landscape of energy demand in the US, we haven't grown the grid for decades. And yet now we have this huge surge of demand for data centers to fuel AI compute. And so You know, our view is to run those, you want baseload. Ultimately, the only clean, safe baseload's been nuclear. It hasn't been the cheapest, but advanced reactors are giving us that option for factory-built, much lower cost reactor, you know, energy production capacity. And so we think advanced reactors are going to surprise everyone on the upside.

• 28:43Speaker 03

  And so we're very bullish on HALU production. And so, you know, we're taking the long side of that bet. And, you know, we feel like someone needs to do it. And the whole reason that there hasn't been HALU capacity is because this has been the story all along. It's, hey, there's two sides to this market. It's chicken or the egg. And as a producer, why should producers produce capacity for something that hasn't even been deployed? And is a very tiny emerging market? And then the advanced reactors say, well, how can we actually operate and raise money to build our reactors? And to have a future that's that's certain without fuel production? And we can't just, you know, produce our reactors and then wait five years to see fuel production come online?

• 29:27Speaker 03

  And so we're, we're willing to lean into that and, and produce a lot of capacity. And so in Paducah, we're producing enough HALU enrichment capacity, we believe, to take us through the middle of the next decade, potentially all the way to 2040 to serve US demand.

• 29:44Shayle Kann?

  And the, the government obviously has decided that this is strategically important as well. And so we should, we should get to, I guess, Paducah and how you're building it, how you're financing it in part, which is you've got this huge DOE award, which is for LEU or HALU or both, actually? I should know that.

• 30:01Speaker 03

  So the DOE enrichment award that we received is for HALU capacity building. And so that's all going to go towards putting HALU, you know, HALU enrichment capacity in Paducah, Kentucky.

• 30:12Shayle Kann?

  Right. So this is, I mean, in some ways, to me, it's like exactly the type of thing that you want the government to do. Like, if we believe we're going to need these advanced reactors and there's this chicken or egg problem of like, there's no fuel, at least domestically or outside Russia for that matter. Then yeah, like great for the government to step in. So, okay, so you got this big DOE award to, to go build that. Like, just talk to me about what that, first of all, talk to me about the Paducah site, because it's interesting. And then what are you, what's it going to look like? What are you actually going to build there?

• 30:42Speaker 03

  Yeah, so Paducah is actually the last place the US did commercial scale enrichment. It's where we did enrichment that fueled all the US reactors. And that facility was was shut down in 2013. And so the Paducah community, Paducah, Western Kentucky, the very western tip of Kentucky, that community remembers when the enrichment plant was operating. And they're very comfortable with enrichment. They understand it. They're comfortable with nuclear. And so as we looked around for basically a year in over 10 other states, something like 1,000 different pieces of land. We found Paducah to be the most supportive, the most excited about bringing enrichment capacity back. So our site in Paducah is on the DOE site.

• 31:27Speaker 03

  That's the site where the enrichment was performed previously. It was called the Paducah Gaseous Diffusion Plant. And we have about 100 acres at the south end of that site that we've leased for a long period of time that we will build our facility on. And so 100 acres. And, you know, again, building enough capacity there to satisfy HALU through the next decade. And then enough LEU capacity to displace adversarial imports into the US. And so that's the scale of it. That's where we're doing it. Timeline is, you know, before end of decade. And then, and then, yeah, that's the rationale on why Paducah. But it's an incredible, incredible location, incredibly supportive community,

• 32:11Speaker 03

  a ton of worker expertise there. Everything you would basically want to run an enrichment facility, including power as a former Manhattan project site.

• 32:20Shayle Kann?

  Are you subject, will you be subject to the commodity price of uranium? Or are you kind of insulated from that because it's tolling? In other words, like, you know, commodity prices of uranium go up, they go down. It's like any other commodity market. But you're providing a fixed service kind of in the middle of the supply chain there. So do you, are you long uranium effectively? Or are you totally indifferent to it?

• 32:46Speaker 03

  For, for LEU, we're certainly indifferent. So the, the model on LEU is almost entirely a tolling operation. And so utilities will purchase the U308. And then we'll enrich it. And so that enrichment price is independent of the U308 price. On HELO, as we're selling to advanced reactor vendors, they often don't have fuel buying teams. So many of them are more inclined to purchase EUP, enriched uranium product, really that final product before going and making your final fuel form that you might want, which in many cases is trisoparticles for advanced reactors.

• 33:25Speaker 03

  And so really on LEU, it's very independent. On HELO, it's less independent. And in many cases, we'll be buying the U308 and having it converted and enriching it and selling EUP when advanced reactors want us to do that. And so we're then interacting with the U308 and U of, you know, conversion markets. We will price EUP in that case at a fair price that's based on those market prices. So really, our core business is enrichment and we'll interact with and contract with utilities in whatever way makes sense for them.

• 34:04Shayle Kann?

  Yeah, though you alluded to something that you and I have chatted about before because you know, we're investors in Elemental Power, which is a pure play nuclear development company. But what you alluded to that references that obliquely is just that on HELO, you're talking about what the reactor companies want, which is interesting. Like, that's a distinction, right? In LEU world with operating fleet of nuclear reactors, it's the utility, it's the owner operator of the plant who you're dealing with. That's the customer who you're tolling for in that case. Whereas in HELO world and advanced reactor world, you know, generally speaking, a lot of the, that kind of like early stage development activity historically has been done by the reactor companies themselves, which I think is not the long term state of

• 34:47Shayle Kann?

  that market, or it shouldn't be. It's not the long term state of any other market in power generation, like where whoever the OEM is, develops all the projects. So ultimately, like you're in an interesting spot there where today, that's kind of who the customer base is because that's who needs HELO to run test reactor demonstrations, things like that. But at some point, I presume. You're going to be switching from selling to the reactor vendor to selling to the developer IPP or to the utility ultimately.

• 35:13Speaker 03

  Right, that's right. I think this is a symptom of just the early stage of that market. And as reactor developers end up selling larger and larger numbers to utilities and the utility becomes the owner operator, I think we're going to see that those same fuel buying teams working at the utilities, simply doing it the way that they had before, where they decouple these different steps and they can contract separately with the right provider at each step. And so going back to your question, really as an enrichment, enrichment services provider, that's our business. It's priced in dollars per SWU and it's independent of the price of uranium or conversion services upstream of us.

• 35:54Shayle Kann?

  All right, final question for you. One of my favorite questions to ask, if you

• 35:59Shayle Kann?

  could wave a magic wand and solve some problem in the nuclear supply chain that isn't the one you're currently solving, something other than enrichment capacity in the US, what would you solve? It's another way of asking the question, like, what do you view as the biggest bottleneck besides the one you're going to try to go tackle?

• 36:15Speaker 03

  Yeah, I think we already talked about conversion. I think as enrichment in the US gets scaled up, you know, five to 10 times, you're going to need more conversion capacity. I think people are working on that. I think that will get solved. Then you look at the next bottleneck of US mining. And if you look at, you know, ideally, we have that in the US too at scale, at a scale that meets all of our needs. That would be, that would be really where I'd wave the magic wand. You know, does the US have as good of deposits as some other countries? No, it doesn't. But today, for US product to be mined, you know, it's shipped all the way out of the country to be converted in a lot of cases and then shipped all the way back. I think we should have a full domestic supply chain.

• 36:59Speaker 03

  And so, you know, you talk to US mining companies and, and a lot of the challenges are just around things like mining permits and how long that takes. And so I think if we can see rationalization of those processes, especially given, you know, things are moving to ISR and are much more, you know, lower impact to the environment. I think if, if regulations can begin to reflect the reality of what mining is today and, and make that more streamlined and allow for US mining to come back, I think that'll be a great thing for the US supply chain. And because at that point, we'll have everything from mining to conversion, enrichment, deconversion and fuel fabrication, all the way into US reactors. And so that's how we

• 37:44Speaker 03

  get, you know, energy security on the nuclear supply chain for the US. And I think, I do think it's really important. And I do think it gets back to just some of the processes around mining and permitting that have existed for decades now.

• 37:56Shayle Kann?

  Yeah, that I, I don't know enough about this to be stating this definitively, but I think the other thing that's interesting about uranium mining versus other types of mining is that you tend to see smaller mines. Like I heard some stat that we have like 13,000 abandoned uranium mines in the US or something like that. I think they're smaller from an individual mine perspective, but also you're, you don't need to produce that much of the material like compared to, I don't know if you're mining copper or whatever. That doesn't help though, because you know, the permitting challenge of a small mine is, is not like, it's not a linear relationship. It's not that much easier versus a large mine. So you have to permit a lot of small mines. It's actually a harder problem, I think, to solve.

• 38:38Speaker 03

  Mm hmm. Yep, that's right. That's right. Um, yes. And so I, I mean, some of that might be just linked back to the nature of the deposits in the US and, and how large and, and, you know, high ore percent they are. And so, um, you know, I do think it's solvable though. And I, if I had to wave a magic wand, I would say, let's make it easier for US miners to compete with miners in other countries, just so we can strengthen that domestic supply chain.

• 39:06Shayle Kann?

  Yep. All right, Scott. I look forward to visiting you in Paducah.

• 39:11Speaker 03

  Thank you.

• 39:11Shayle Kann?

  Once, once things are up and running there, but appreciate your time today. Thanks so much.

• 39:15Speaker 03

  Yeah, excited to have you. Anytime you want to stop by, uh, come visit. We're under construction now in the site. And so there's already a lot to see.

• 39:24Shayle Kann?

  Scott Nolan is the founder and CEO of General Matter. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Max Savage Levenson. Mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I'm Shayle Khan, and this is Catalyst.