Centrus Energy (NYSE:LEU) opened the door to a substantial government-backed supply arrangement Wednesday, with company shares gaining 2.1% in after-hours trade after the firm signed a $900 million contract with the U.S. Department of Energy for uranium enrichment services.
The deal is structured as a fixed-price contract for HALEU and carries options that could add up to $170 million in purchases of High-Assay, Low-Enriched Uranium, bringing the maximum potential value to $1.07 billion. The agreement is intended to support the deployment of large-scale HALEU production capacity at Centrus’ Piketon, Ohio facility as part of a broader multi-billion-dollar expansion that will encompass production of both LEU and HALEU.
Centrus reported that it completed production of 900 kilograms of HALEU UF6 in mid-June, finishing its demonstration contract with the DOE two weeks ahead of schedule. Under that demonstration contract, the company produced more than 1,900 kilograms in total. Separately, the DOE extended the prior demonstration arrangement for three months at a value of $15 million to cover HALEU storage.
The company intends to move the existing HALEU cascade into private commercial operation to address near-term customer requirements while additional capacity is constructed. Centrus expects the first tranche of new production capacity to be operational by 2029.
The initial phase of the planned build-out will provide 12 metric tons of annual HALEU production capacity and will also include capacity sufficient to meet Centrus’ existing LEU backlog, which the company values at $2.4 billion. The expansion is projected to create roughly 1,000 construction jobs and 300 new operating positions in Ohio, while maintaining 150 positions already in place at the Piketon plant. In addition, Centrus anticipates about 430 jobs at its centrifuge manufacturing facility in Oak Ridge, Tennessee.
Funding for the project will come from a mix of public and private sources. The company cited national security missions, third-party investments, direct foreign investment, and commercial contracts for both LEU and HALEU as contributors to the financing plan.
Context and implications
The contract secures a major government customer for Centrus’ planned HALEU output and anchors the company’s expansion timeline and job-creation targets. While the agreement is fixed-price, the presence of option provisions raises the top-line potential of the arrangement and links near-term production profiles to a broader financing and construction program.
Operationally, transitioning an existing HALEU cascade to commercial operation is presented as a bridge to meet customer demand while the new capacity is being brought online, with the first new capacity expected by 2029.