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Yves here. We noted early on that Russia has a significant market share in many key commodities and goods, such as neon, and that Russia can restrict supply in order to gain power. Finally, there was (depending on the author) a worried or angry analysis about the fact that the US relied on Russian uranium at the beginning of the Special Military Operation. The article echoes a Bloomberg report on Putin’s comments, indicating that he has asked his administration to study the question and determine whether a ban or restrictions on Western imports would net Russia. Answer from Bloomberg:
Russian President Vladimir Putin has asked the government to consider whether it makes sense to limit exports of certain commodities such as nickel, titanium and uranium in retaliation for western sanctions.
“Russia is leading in the reserves of raw materials such as uranium, titanium, nickel,” Putin said during a televised meeting with the government. As western sanctions restrict exports of some Russian goods such as diamonds, “maybe we should think about restrictions,” he said. Such restrictions should not harm Russia, he said….
While the London Metal Exchange in April suspended deliveries of new Russian nickel and aluminum following sanctions imposed by the US and UK, Russia sells a large portion of its output to end users. The US this year also banned the purchase of Russian uranium and newly produced nickel, copper and aluminum.
“I’m not saying that this should be done tomorrow, but we can think about some restrictions on foreign market sales not only of the goods I mentioned, but also others,” said Putin.
The United States passed a law that implemented the ban that went into effect on August 11, 2024, making Putin’s comments look like he’s trying to close the barn door after the horse is in the next stall. (As an aside, note the hyperbolic spin in the article, where Putin indicates that he is considering the idea and move presented as emotional, “retaliation,” rather than revenge). But the law has a loophole where you can drive a truck. From the Department of Energy:
Recognizing that in the near term, implementing the embargo could disrupt the operation of nuclear power plants, the law authorizes the Secretary of Energy, in consultation with the Secretary of State and the Secretary of Commerce, to lift the embargo and allow the importation of Russian uranium. if the applicant can demonstrate that it has no other viable source of uranium or that such imports are in the national interest. Any waiver by the Secretary of Energy is subject to cumulative annual limitations and will expire on or before January 1, 2028.
An article in Heritage explained that the real problem is enrichment, and that getting the US out of Russia’s hands depends on private investors stepping up and financing the enrichment. From Heritage:
The US gets about 19% of its electricity from 93 commercial nuclear power reactors, fueled by uranium….
Although uranium is the most abundant mineral in the world, the ability to enrich it for use in nuclear power plants is very limited. Russia controls about 46% of the world’s energy reserves, while the US only controls 9.5%.
But America is a major consumer of fuel-grade uranium, known as low-enriched uranium, or LEU. That means the United States can produce about 20% of its LEU needs domestically. The remaining requirements come from enrichment centers in the United Kingdom, Germany and the Netherlands. About 25% are from Russia….
Immediately after the attack, Mr. Biden stopped the import of oil from Russia. Now, Washington has taken action to ban the import of uranium. The law has three main parts. It prohibits the importation of LEU from Russia or any Russian entity, prohibits black market importation by banning LEU that is “determined to be altered, exchanged, or otherwise obtained” to circumvent the ban, and lasts until 2040.
Long-term prevention is important because increasing enrichment is time-consuming and expensive. Investors will not increase capacity to accommodate Russian supply if the embargo is lifted or lifted, making cheaper Russian LEU available again to US buyers.
Although the growing demand for non-Russian uranium fuel has encouraged the only rich American commercial powerhouse to increase capacity, a long-term ban on Russian imports is necessary to provide the market certainty needed to justify investment in a broader expansion of the sector.
Heritage then calls out two problems with the bill. Another compromise we have flagged, arguing that it will undermine certainty about domestic demand. The second is that the authorities need to “get out of the way” and be as permissive as possible regarding permits for uranium enrichment and mining.
Although nuclear power is more important to France’s energy mix than the US (France exports electricity), it dwarfs Russia’s use of uranium. EDF uses about 8,000 tons of uranium a year, and from what I can tell, only 153 tons come from Russia. A chart in a 2023 article in Le Monde about French uranium resources in Africa does not include Russia as a source of the material:
Having said that, for reasons of space, your humble blogger will not attempt to profile which countries may be cut off if Russia restricts exports to members of the Collective West for some or all other goods where Russia is a major supplier. If Russia moves forward, one can expect to see an analysis using more current data than the one we published in 2022.
By Alex Kimani, a veteran accountant, investor, developer and researcher for Safehaven.com. Originally published at OilPrice
Russian President Vladimir Putin has asked Moscow to consider limiting exports of certain commodities such as uranium, nickel, and titanium in retaliation for Western sanctions, Bloomberg reported Wednesday.
“Russia is a leader in the storage of strategic raw materials such as uranium, titanium, nickel,” said Putin when addressing the government on television. As Western sanctions restrict the export of some Russian goods such as diamonds, “maybe we should also think about limits,” he said, adding that such restrictions should not harm Russia
The US and its Western allies have imposed many sanctions on the Russian economy as punishment for its war in Ukraine. However, many valuable materials—including nickel, palladium, and uranium—are not subject to any restrictions and continue to flow to the West.
Back in June, the EU approved sanctions on Russian gas, the first time it has done so. According to the Belgian EU president, the EU will hit Russia with unprecedented sanctions on its lucrative gas industry – which could drain hundreds of millions from Moscow’s war chest.
However, the proposed penalties will not affect the majority of Russian liquefied natural gas (LNG) exports to the EU; instead, the sanctions will prevent EU countries from re-exporting Russian LNG after receiving it and prevent EU involvement in future LNG projects in Russia. The sanctions will also deny the use of EU ports, finance and services to re-export Russian LNG, meaning Russia will have to restructure its LNG export model. Currently, Russia supplies LNG to Asia through Europe, with Belgium, Spain and France being the major hubs.
“If they can’t transport to Europe, they may have to take their ice class tanks on long trips,” Laura Page, a gas expert at Kpler data analytics company, told Politico, adding that Russia “may not be able to get more cargo out of Yamal because their ships cannot return quickly.”
Norway and the US have replaced Russia as Europe’s largest gas supplier: Last year, Norway supplied 87.8 bcm (billion cubic meters) to Europe, accounting for 30.3% of total sales while the US provides 56.2 bcm, which is 19.4% of the total. .
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