USEC may benefit if further investigation proves that the countries subsidize production of enriched uranium.
By Bill Bartleman firstname.lastname@example.org
USEC Inc. won a major battle Monday in its allegations that European companies are selling enriched uranium in the United States at prices less than the actual production cost.
The U.S. International Trade Commission determined "there is a reasonable indication" that USEC is materially injured because the imports from France, Germany, the Netherlands and the United Kingdom are subsidized by their governments.
The preliminary findings indicate that the enriched uranium from those countries is being sold to U.S. power companies at less than fair value and at prices less than it can be produced by USEC, which is not subsidized.
USEC Inc. is the nation's only producer and domestic supplier of enriched uranium that is used as fuel in nuclear power generating plants. It enriches uranium at plants in Paducah and Portsmouth, Ohio. The Portsmouth plant is scheduled to stop production this summer.
The 4-0 approval by ITC clears the way for the U.S. Department of Commerce to continue its investigation to determine if allegations of illegal dumping of low-priced enriched uranium are true.
If the allegations are true, Commerce officials will also issue a preliminary determination as to what punitive trade duty, or import tax, should be placed on the imports to compensate for the government subsidies.
Commerce will issue its determination in two preliminary reports, one scheduled for March 2 and the other for May 16, according to Peg O'Laughlin, ITC spokeswoman in Washington.
If Commerce agrees USEC is harmed by the imports, it will require the foreign companies to post bonds to cover potential trade duties while the investigation moves into its final phases, which could take an additional six to nine months.
The ruling is good news for USEC Inc., which has been facing serious financial problems because of foreign competition and a glut of enriched uranium on the world market that has driven prices down.
"Today's decision is an important step in validating USEC's claims that foreign competitors are dumping enriched uranium into the U.S. market and causing significant damage to the domestic enrichment industry," said William H. "Nick" Timbers, USEC's president and chief executive officer.
"These unfair practices must be stopped for the good of the U.S. national and energy security, and the nuclear fuel cycle," he said.
USEC filed its complaints with the federal agencies in December, alleging that Eurodif SA, which is controlled by the French government, and Urenco Ltd., a British-Dutch-German consortium, were illegally pricing enriched uranium below production costs and, in the case of Eurodif, below prices charged in its home market.
Federal lawmakers from Kentucky last month sent a letter asking the Department of Commerce to investigate USEC's allegations. U.S. Sens. Mitch McConnell and Jim Bunning and U.S. Rep. Ed Whitfield signed the letter.
Spokesmen for the three said they either weren't aware of the ruling or were studying the ruling before reacting.
In a joint filing with the commission, Urenco and Eurodif said USEC ‘‘apparently still lusts for the days when it had a monopoly.’’
The companies blamed USEC’s declining profits on its own low prices, its money-losing contract to sell uranium retrieved from former Soviet weapons, and its electricity-intensive, World War II-era technology.
USEC dominates the world market, with 36 percent of current business, but the company said it bid on — and lost — millions of dollars worth of future business to Eurodif and Urenco.
Since going public in 1998, USEC’s profits and stock prices have dropped. Later this year, it intends to stop production at its plant near Portsmouth to reduce costs.
USEC shares closed at $6 on Monday, not far from its 52-week high of $6.875 but well off the $14.25 a share it fetched at privatization.
The Associated Press contributed to this report.