Centrus Energy Surges 10% on $900M US Nuclear Fuel Contract
Deal with Department of Energy is part of a $2.7 billion push to build a domestic supply chain for advanced reactor fuel and reduce reliance on Russia.
Shares of Centrus Energy (NYSE: LEU) surged more than 10% on Monday after the company secured a landmark $900 million contract from the U.S. Department of Energy (DOE) to produce a specialized nuclear reactor fuel, a move aimed at bolstering American energy independence.
The stock closed up 10.24% at $300.41, pushing the company's market capitalization towards $5 billion. The award is a cornerstone of a larger, $2.7 billion federal initiative to reconstitute the United States' domestic uranium enrichment capacity, a critical supply chain that has become heavily dependent on foreign nations, particularly Russia.
Centrus, through its subsidiary American Centrifuge Operating, will use the funds to pioneer and scale up the production of High-Assay Low-Enriched Uranium (HALEU). This material is a crucial component for the majority of next-generation advanced nuclear reactors, including small modular reactors (SMRs), which are considered vital for future carbon-free energy goals. HALEU is enriched to between 5% and 20% uranium-235, higher than the typical 3% to 5% used in the current fleet of reactors, allowing for smaller, more efficient, and safer reactor designs.
The contract's value represents a transformative moment for the Bethesda, Maryland-based company, nearly doubling its trailing-twelve-month revenue of approximately $454 million. This validates Centrus’s unique position as the only company in the United States currently licensed and actively producing HALEU.
"This investment will not only revitalize America’s nuclear fuel industry but also support the development and deployment of our advanced reactors and create a new, dependable market for our uranium producers," the U.S. Department of Energy stated in its official announcement. The DOE's plan is designed to jumpstart a secure domestic HALEU supply chain to ensure American companies leading nuclear innovation are not reliant on potential adversaries for fuel.
For decades, the global supply of HALEU has been dominated by Russia, creating a significant strategic vulnerability that has become more acute amid geopolitical tensions. Without a reliable domestic source, the rollout of advanced nuclear technologies in the U.S. risked being stalled by supply chain uncertainty. This federal funding is intended to directly mitigate that risk.
Analysts have reacted positively to the news, viewing it as a major de-risking event for Centrus. Following the announcement, analysts at Needham maintained a "Buy" rating on the stock, underscoring the company’s singular strategic position in the North American market. Similarly, Evercore ISI has cited the company's clear path to growth, supported by national security and clean energy mandates.
The contract will enable Centrus to significantly expand its current HALEU production capacity in Piketon, Ohio. The company has been operating a demonstration cascade of centrifuges and made its first delivery of 20 kilograms of HALEU to the DOE in late 2023, proving the viability of its technology. This new, larger award solidifies its role as a key government partner in building a commercial-scale fuel cycle for the reactors of the future.
"Establishing a robust domestic HALEU supply chain is vital for our energy security and economic competitiveness," as noted by industry experts. The move is seen as essential for the U.S. to compete with state-owned nuclear enterprises in Russia and China and to achieve ambitious climate goals, which include a pledge by the U.S. and more than 20 other countries to triple global nuclear power by 2050. For Centrus Energy, this $900 million contract is not just a financial windfall; it is a federal anointment of its central role in America's nuclear energy future.