U.S. Can Move Excess Uranium to Market

     (CN) – ConverDyn failed to show the federal government’s planned transfer of 2,055 metric tons of excess uranium to the public market would cause the firm irreparable harm, dooming its bid for injunctive relief, a federal judge ruled.
     Although U.S. District Judge Reggie Walton found that ConverDyn, the nation’s only domestic provider of uranium conversion services, would likely prevail on one of numerous claims it made against the U.S Department of Energy, that wasn’t enough for it to be granted the preliminary injunction it sought, he said.
     Nuclear fuel is made via a complex process of converting natural uranium into uranium hexafluoride and then enriching it with certain amounts of fissionable isotopes into either low- or high-enriched uranium.
     ConverDyn, established in 1992 as a general partnership of Honeywell and General Atomics affiliates, converts natural uranium into uranium hexafluoride at its plant in Metropolis, Ill.
     Under the Privatization Act of 1996, the Energy Department may sell its extra reserves of natural and low-enriched uranium if its secretary determines that doing so will not harm the domestic uranium market. However, the act requires the secretary to review and update this determination every two years.
     In 2014, the department updated its excess uranium management plan, concluding there was an oversupply of uranium on both the international and domestic markets due in large part to the 2011 Fukushima nuclear disaster.
     At the time, the secretary was considering the transfer about 2,850 metric tons of UF6 a year into the public market over the next ten years.
     The report estimated these transfers would result in a 7 percent to 8 percent loss in sales volume for Converdyn, on top of the 25 percent loss the company had already sustained after Fukushima.
     Despite these projected losses, the department determined that introducing its uranium reserves would not significantly alter domestic market conditions or harm domestic mining operations.
     The secretary approved the determination in May 2014 and authorized the transfer of up to 2,055 metric tons of natural uranium per year to government contractors for cleanup services, and up to 650 metric tons of natural uranium to the National Nuclear Security Administration to be down-blended into low-enriched uranium for use by departmental programs.
     ConverDyn challenged the determination the following month, claiming the department had no authority to transfer conversion services and that its finding of “no ‘adverse material impact” was arbitrary and capricious. Ten days later, it moved to preliminarily enjoin all the department’s scheduled uranium transfers.
     The court refused to stop the transfers on July 29, and Judge Walton elaborated on the court’s reasoning in a ruling issued Sept. 12.
     ConverDyn claimed that it stands to lose $40.5 million in profits over the next two years due to the transfers, another $29 million due to “changed customer buying habits,” and another $10 million annually, the judge said.
     While Walton acknowledged that these losses are “significant,” by themselves they are not enough to prove irreparable harm because they offer “little insight into the magnitude of [ConverDyn’s] loss during the pendency of this case, he wrote.
     Moreover, ConverDyn did not argue that these loses are enough to force it to close its doors or operate at a loss; it merely claimed that the transfers will hurt its “long-term viability,” the ruling stated.
     When compared to its average annual profits of $100 million, losing $10 million a year is hardly enough to establish irreparable harm, let alone warrant a preliminary injunction, Walton added.
     He then moved on to discuss ConverDyn’s other claims, rejecting most of them, but also finding the Energy Department erred by failing to explain how evidence from ConverDyn demonstrating how the proposed transfers would hurt it financially did not constitute adverse material impact.
     “The Department’s analysis on this point may be correct, but it is the answer to the wrong question,” Walton wrote. “Rather than assessing the evidence to determine whether the planned transfers would have an adverse material impact on the domestic uranium production, conversion, or enrichment industries … the Department instead reviewed the evidence to determine whether the planned transfers are the primary cause f the current depressed state of the uranium market or whether altering the amount of transfers would alleviate negative market conditions.”
     Since it considered factors it was not intended to consider, its final decision is arbitrary and capricious, according to the ruling.
     “While we were disappointed in the judge’s decision to deny a temporary injunction, ConverDyn is confident that it will ultimately prevail in its legal action,” ConverDyn spokesman Peter Dalpe said in an interview.
     “We have now moved the merits phase of the legal action and ConverDyn has filed a motion for summary judgment to stop the unlawful transfers,” Dalpe said.

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