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 U.S.
- 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
Resources
- Latitude Media: Commonwealth Fusion Systems launches digital twin with Nvidia and Siemens
- 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
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.
Transcript
Shayle Kann: I’m Shayle Kann. 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, and what that means for the geopolitics of energy and an era of nuclear power expansion.
Shayle Kann: 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 talked bigger picture as well, everything from mining to fuel. That’s coming up after the break. Scott, welcome.
Scott Nolan: Thank you. Thanks for having me on.
Shayle Kann: Alright. Let’s start by having you give me a walkthrough of the uranium fuel supply chain, the nuclear fuel supply chain. So take me from soup to nuts. What do we start with and what do we end with?
Scott Nolan: 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 and 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 a refining separation step. You then deconvert it into a solid, back into a solid. And with that solid, you then make fuel fabrication. So fuel pellets or tricep particles 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.
Shayle 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?
Scott Nolan: 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 Converdine. In Southern Illinois, it’s actually five miles from where our facility is. So that’s in Metropolis, Illinois. You also have conversion in Canada outside Toronto done by Camico. And then you’ve got the Europeans who also do conversion. And so-
Shayle Kann: Can we pause on that one for one second? 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 all solstice advanced materials operating in the US, as you said, in Illinois for what, like 50 years or some crazy long period of 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’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?
Scott Nolan: Yes. I mean the whole history on the facility, like you said, 50 plus years of operations, originally a joint venture between General Atomic and Honeywell. And then it was always marketed under Converdine, which was really the sales arm of that joint venture. And then like you said, spun out under Solsys. So 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 inventory 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 getting ramped back up the last couple of years. I think that’s what you’re referring to is working all the way towards nameplate capacity and then potentially further. And so, we’ve seen that facility expand production. They’ve had some great wins on that front the last couple of years, but there’s going to be a limit to how far they can expand it at that site.
Scott Nolan: And so enrichment’s really the main bottleneck in the industry, 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.
Shayle 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, 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 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?
Scott Nolan: We’re not too worried about it. So 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, 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 converged on conversion being the next 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’s a relatively known process.
Scott Nolan: It’s done without a lot of technical difficulty in Europe and in Canada and even in the US. And so we expect 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.
Shayle Kann: Okay. So one way or another, somebody does conversion, you get UF6. Okay, so then now we go to enrichment, which is your focus. What happens in enrichment, first of all, and then we can talk about where it happens.
Scott Nolan: Right, 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 traditional mining. Now most people are doing in- situ recovery, ISR, and so that’s more of like a pumping and extraction process. And so milling and mining are now combined into one step where the output is yellow cake, U308. And then going through the conversion process, what you’re doing is stripping off the oxygens and adding flooring. 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. So I think you said, “Hey, 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 product.
Shayle 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 ultimately. They buy a precursor to fuel and then toll it through an enrichment facility.
Scott Nolan: That’s right. 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 of services 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. All these are essentially the same thing. And so what our operation does is we take in 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.
Scott Nolan: That’s the fizzle 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 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 HALEU, high assay, LEU for advanced reactors.
Shayle Kann: Yeah. I want to talk about that LEU and HALEU 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?
Scott Nolan: Well, weapons grade is anything above 20%. And so the amount of-
Shayle Kann: Your sub weapons grade in any of these cases.
Scott Nolan: Yeah. And weapons grade’s considered above 20%. So how far you take it, what’s going to determine how much more enrichment you need to do, but it’s essentially all enrichment is a repeated process of refining until you get to the level that you’re seeking.
Shayle 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?
Scott Nolan: 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 Uranko down in New Mexico, and that produces about 20% of US demand, but the other 80% is coming from overseas and a full 20, 25% is Russia, depending.
Shayle 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? I get the sense it’s one of these areas that 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 and so we’re sort of unwilling to sanction it or stop buying from Russia. Do I have that sort of right?
Scott Nolan: 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. 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.
Scott Nolan: So 80s, the US was a leader in global enrichment, something like 86% at the peak. And then the Berlin wall fell and we entered a treaty with Russia, which was called the mega tons to megawatts program. And in that trade program, we imported Russian warheads. We downblended them and used that downblended material to run our reactors. We then sent the depleted uranium back to Russia to be … Or the … 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 gas use diffusion, which was a first generation technology. And so then over the subsequent 20 years, the US progressively shut down its own enrichment, first privatizing it 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.
Scott Nolan: And so we went from a place of 86% global market share down to less than 0.1% today by US companies or US entities. And so that’s the state of things. From the utilities point of view, they do need enriched uranium to feed the reactors and we don’t want the grid to brownouts just due to not having fuel for them. And so they’ve used the waiver process to bring in Russian uranium and now we’re facing the 2028 cliff. And so really it’s how do we fill this LEU supply gap that’s coming our way in 2028 and ideally doing it with domestic sources.
Shayle Kann: Okay. So I want to finish the supply chain and then come back to the different fuel types, LEU and HALEU and what that means for enrichment. But just to finish the supply chain side of it, so 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?
Scott Nolan: 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 times those are referred to as the same step or at least priced as the same step.
Shayle Kann: Okay. So then back to enrichment, there are, I mean, 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 four reactors, which generally run on HALEU. 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?
Scott Nolan: Right. Yeah. So like you said, there’s really two types of fuel, LEU and HALEU that are used in nuclear energy, which is what we’re focused on. LEU is anywhere from three to 5% enriched of U235 by weight. HALEU is technically anywhere five 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, the traditional reactors that you have that are gigawatt scale and are very large, 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.
Scott Nolan: And so that’s traditionally been done to three to 5%. As we look to factory build reactors and make them smaller, the core has to get smaller. And so to get criticality, to get good burnup 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%, 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 we’re making both of those.
Shayle Kann: And let’s be clear on what we talked about with the existing supply chain. I mean, basically everything we’re talking about with the existing supply chain is LEU, partially because those advanced reactors don’t mostly exist yet, or at least they’re not commercial in the market. But HALEU, there is zero current capacity or essentially zero. I mean, walk me through like, if I wanted to go buy HALEU tomorrow, what would that look like?
Scott Nolan: 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 Founders Fund, I was 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 HALEU 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 you just get the US companies to make Halo? Is it that much harder to go to a higher level?” And they said, “There really is no US owned production.” And so that kicked this all off. And I realized pretty quickly that Russia was the 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 have a hard time scaling up.
Scott Nolan: And so fast forward to today, the DOE has actually stepped up and made some HALEU available to advanced reactors, but that’s really only going to take them through first demonstrations, first deployments to really scale up we’ll 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 who are planning to produce HALEU is us at our facility in Paducah, Kentucky. And so we’ll be bringing that online by the end of the decade. And then Centris, the US incumbent has also been working on HALEU capacity and planning to scale that up.
Shayle Kann: So for you, I mean, I think you can imagine to a first order that, okay, 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 HALEU, 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 it is kind of a different process or at least you want different equipment if you’re going to be producing LEU versus HALEU. 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?
Scott Nolan: I think the thing to remember is this is all really just a separation distillation process. And so producing HALEU, you typically ingest LEU and then you’ll enrich that up to HALEU. And so it’s really a repeated process. Now, the things that are different, the important things that are different are around criticality and licensing. And the licensing is different to reflect the criticality difference and 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 hold uranium, a certain volume of uranium may need to be smaller in the case of HALEU 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 difference between the two is criticality considerations, which is why you see, in the past couple of years, the DOE putting out awards for HALEU enrichment specifically and LEU enrichment capability, and then also HALEU deconversion.
Scott Nolan: And so that last step that you asked about, those last two steps of deconversion and fuel fabrication, as you bring HALEU UF6 down into solid form, you’re now getting even more density of uranium. And so as it’s at a HALEU level, up to 19.75% E235 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.
Shayle Kann: I’m interested from like a business and market perspective, it feels like LEU and HALEU 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 from a large base, so incrementally it’s not going to be that much. So you kind of know 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 HALEU, 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.
Shayle Kann: And so you’re going to produce capacity to make HALEU 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 halo 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. You’re simultaneously building 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.
Scott Nolan: Yeah. On the HALEU 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 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 our view is to run those, you want base load. Ultimately, the only clean, safe base load’s been nuclear. It hasn’t been the cheapest, but advanced reactors are giving us that option for factory built much lower cost reactor energy production capacity. And so we think advanced reactors are going to surprise everyone on the upside, and so we’re very bullish on HALEU production. And so we’re taking the long side of that bet and we feel like someone needs to do it.
Scott Nolan: And the whole reason that there hasn’t been HALEU capacity is because this has been the story all along. It’s,”Hey, there’s two sides of 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 certain without fuel production?” And we can’t just produce our reactors and then wait five years to see fuel production come online. And so we’re willing to lean into that and produce a lot of capacity. And so in Paducah, we’re producing enough HALEU enrichment capacity, we believe to take us through the middle of the next decade, potentially all the way to 2040 to serve US demand.
Shayle Kann: And the government obviously has decided that this is strategically important as well. And so we should get to, I guess Paducah and how you’re building it and how you’re financing it in part, which is you’ve got this huge DOE award, which is for LEU or HALEU or both actually. I should know that.
Scott Nolan: So the DOE Enrichment Award that we received is for HALEU capacity building, and so that’s all going to go towards putting HALEU enrichment capacity in Paducah, Kentucky.
Shayle 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. 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 in domestically or outside Russia for that matter, then yeah, great for the government to step in. So, okay, so you got this big DOE award to go build that. First of all, talk to me about the Paducah site, because it’s interesting. And then what’s going to look like? What are you actually going to build there?
Scott Nolan: 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 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 a thousand 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. That’s the site where the enrichment was performed previously. It was called the Paducah Gaseous Diffusion Plant and we have about a hundred 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.
Scott Nolan: And so a hundred acres, and again, building enough capacity there to satisfy HALEU 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 before end of decade. And then, yeah, that’s the rationale on why Paducah, but it’s an incredible location, incredibly supportive community, a ton of worker expertise there, everything you would basically want to run an enrichment facility, including power as a former Manhattan project site.
Shayle Kann: 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, 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 are you long uranium effectively or are you totally indifferent to it?
Scott Nolan: For LEU, we’re certainly indifferent. So 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 HALEU, 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, enrich uranium product, really that final product before going and making your final fuel form that you might want, which in many cases isTRISO particles for advanced reactors. And so really on LEU, it’s very independent. On HALEU, 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 UF conversion markets. I We will price EUP in that case at a fair price that’s based on those market prices.
Scott Nolan: So really our core business is enrichment and we’ll interact with and contract with utilities in whatever way makes sense for them.
Shayle 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 HALEU you’re talking about what the reactor companies want which is interesting like that’s a distinction. 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 a halo world and advanced reactor world, generally speaking, a lot of 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 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.
Shayle Kann: So ultimately you’re in an interesting spot there where today that’s kind of who the customer base is because that’s who needs HALEU to run test reactor demonstrations and 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.
Scott Nolan: 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 have 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 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.
Shayle Kann: Alright. Final question for you. One of my favorite questions to ask, if you 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?
Scott Nolan: Yeah, I think we already talked about conversion. I think as enrichment in the US gets scaled up 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, ideally we have that in the US too at scale, at a scale that meets all of our needs.That would be really where I would wave the magic wand. Does the US have as good of deposits as some other countries? No, it doesn’t. But today for US product to be mined, 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. And so you talk to US mining companies and a lot of the challenges are just around things like mining permits and how long that takes.
Scott Nolan: And so I think if we can see rationalization of those processes, especially given things are moving to ISR and are much more lower impact to the environment, I think if regulations can begin to reflect the reality of what mining is today 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 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 get energy security on the nuclear supply chain for the US. 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.
Shayle Kann: Yeah. 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. 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 don’t need to produce that much of the material compared to, I don’t know if you’re mining copper or whatever. That doesn’t help though because the permitting challenge of a small mine is not, 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.
Scott Nolan: Yep, that’s right. That’s right. Yes. And so, I mean, some of that might be just linked back to the nature of the deposits in the US and how large and high or percent they are. And so, I do think it’s solvable though. And 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.
Shayle Kann: Yeah. All right, Scott, I look forward to visiting you in Paducah.
Scott Nolan: Thank you.
Shayle Kann: Once things are up and running there, but appreciate your time today. Thanks so much.
Scott Nolan: Excited to have you. Anytime you want to stop by, come visit. We’re under construction now on the site, and so there’s already a lot to see.
Shayle 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 is produced by Max Savage Levenson, mixing and theme song by Sean Marquand. Steven Lacey is our executive editor. I’m Shayle Kann and this is Catalyst.
