Source: The Financial Times                     Date: 08 December, 2010

A Russian state-owned company is set to control up to half of U.S. uranium output by the middle of the decade, after American authorities gave the go-ahead to the partial takeover of Uranium One of Canada by ARMZ. The deal is the latest sign of how, after a three-decade hiatus in new reactor projects, the U.S. has lost control of key parts of the nuclear supply chain.

ARMZ, the uranium mining division of Russia’s state-owned Rosatom nuclear power group, has taken a 51 per cent stake in Toronto-listed Uranium One which owns mines in Wyoming. The two companies aim to bring the mines into production next year, and plan to increase output to 2m-4m pounds of uranium oxide per year by 2015. Total U.S. uranium output will be about 4m pounds this year. Mr. Vadim Zhivov, ARMZ’s director-general, said he understood concern about the deal, but added: “It is 20 years since the Cold War, and no single country will be able to solve the energy challenges of the world.”

More than 80 per cent of U.S. uranium consumption is imported, and Russia is one of its largest suppliers. Nevertheless, Mr. Zhivov acknowledged the company had a “hard road ahead” to prove to Uranium One shareholders that “a Russian state-owned company can . . . play by the rules of the modern developed world.” Once the deal closes, ARMZ expects to be the world’s fourth-largest uranium producer, and plans to ramp up production in Kazakhstan and the U.S. to become the second-largest by 2015, behind only Kazatomprom of Kazakhstan.