UPDATE 1-U.S. seeks to lower Russian uranium imports to boost U.S. nuclear industry

(Adds reaction by Energy Fuels)

WASHINGTON, Sept 14 (Reuters) - The U.S. Commerce Department on Monday inked a draft agreement with Russia’s state nuclear energy company to reduce imports of uranium from Russia over the next 20 years in a bid to boost domestic mining and nuclear energy.

The Commerce Department and Rosatom initialed the draft amendment to the 1992 Russian Suspension Agreement to prevent dumping, extending that deal to the year 2040 and gradually reduce the amount of uranium the U.S. imports from Russia for enrichment from 20% to 15% starting in 2028.

“If finalized, it will contribute to the restoration of America’s nuclear energy advantage and protect the domestic industry from dumped Russian uranium,” said Commerce Secretary Wilbur Ross.

The draft amendment was one of the recommendations made by the interagency Nuclear Fuel Working Group to address concern in Washington that the United States has ceded its global leadership in nuclear technology, and to boost domestic nuclear power producers and uranium miners suffering from a lack of investment.

The amendment would let U.S. companies that have existing uranium purchase contracts with Russia keep them in tact.

One U.S. uranium miner said that by allowing for the “grandfathering” of those contracts, the amendment may not help the struggling industry in the short term.

” will actually result in Russian uranium imports into the U.S. increasing during the next three years, before decreasing in the mid 2020s,” said Mark Chalmers, chief executive of Energy Fuels.

He said that a more effective measure for the industry would be to set up a federal Strategic Uranium Reserve, another recommendation of the nuclear fuel working group.

U.S. President Donald Trump created the working group last July after rejecting a request by Energy Fuels and Ur-Energy Inc , seeking quotas for domestic uranium production to protect them against foreign competition.

The Commerce Department aims to finalize the amendment by Oct. 5 and will take comment on it until Sept. 28. (Reporting by Valerie Volcovici Editing by Marguerita Choy)