1. TENEX on the World Nuclear Fuel Market: Looking into the Future
Andrey Tovstenko
Head of Marketing and Business Strategy Directorate
JSC TECHSNABEXPORT
ATOMEXPO-2013
Saint Petersburg, Russia, June 2013

2. TENEX Market Chronology
1963
1971
1987
1990
1993
1995
1999
2009
2012
UAE
USA
(Resumption of Commercial Activity in accordance with the Amendment to the Suspension Agreement)
Japan
South Africa
Republic of Korea
The Beginning of Natural Uranium Deliveries to the
USA & Europe
USA
Europe
(other countries)
France
(The first SWU Contract)
TENEX
establishment

3. TENEX’s Market Presence Evolution
Western SWU market structure
Geographical Structure of TENEX’s Export
TENEX has gained a significant share of the global market for the NFC goods and services.
Its geographical market presence gradually becomes more diversified

4. Key Market Trends: Nuclear Power Development
Source: Uranium Requirements Model published in UxC
URM Report Q
Referenced sources forecast long-term growth of nuclear energy in all scenarios (excl. WNA low),
Asian countries, inclusive China, India and Middle East will be the main drivers for nuclear energy.
Growth rate will mostly depend on such factors as energy consumption, competition from other energy sources (gas, oil, etc.) and ecological aspects.
The general increase of NPPs fleet will result from the fact that this industry provides clean and reliable source of energy.

5. Key Market Trends: Enrichment & Natural Uranium
Nuclear newcomers from emerging markets drive demand
 increased demand for integrated products
Transition period from gas diffusion to gas centrifuge completed
 in the long-term suppliers will compete in new market environment
Number of suppliers increases
[Ex.: enrichment services sellers to US utilities: 5 in 2005, 7 in 2009, 11 in 2012 (source: EIA)]
 competition increases
 approved and reliable suppliers preferred
Downward pressure on natural uranium and SWU prices during recent period
 possible market instability in the mid-term
Kazakhstan is making the great contribution in the world uranium mining while many miners in other countries have cancelled or delayed expansion of uranium production
SWU Prices, $/SWU
Natural uranium prices, $/lb

6. Key Market Trends: Possible Instability
Price Spikes
Low Price Periods
January 2004
October 2004
January 2005
October 2005
January 2006
October 2006
January 2007
October 2007
January 2008
October 2008
January 2009
October 2009
January 2010
October 2010
January 2011
October 2011
January 2012
October 2012
January 2013
April 2004
July 2004
April 2005
July 2005
April 2006
July 2006
April 2007
July 2007
April 2008
July 2008
April 2009
July 2009
April 2010
July 2010
April 2011
July 2011
April 2012
July 2012
April 2013
Periods of low-price lead to discourage of producers and make them to decrease production. This in its turn result in lack of material on the market, price spikes and unstable market situation
Fair price level provides sustainable market development and therefore it is favorable both for suppliers and customers (this is also true in case of SWU market)

7. Market Trends: SWU Market Supply/Demand Balance (World market without the segment of Russian Design Reactors)
Change in Non-Russian reactors SWU demand, primary (effective capacities) and quasi-primary (HEU-LEU) supply (excluding Russian commercial EUP/SWU export) by 2020, 2010 = base year
mln. SWU
Supply
Demand 30
ACP, SILEX
+ 4 20
Other
expansions
+ 5.6
Total
in:
+25.6
ETC
+ 16
Net:
+18.9 10
Net:
+5.2
GB I
- 8
-10
Paducah -6
Total
out:
-20.4
Sources:
- Demand: Uranium Requirements Model published in UxC URM Report Q1 2013, recalculated at current optimal tails assay (0.223%)
Supply: UxC Enrichment Market Outlook Q (expected enrichment supplies) and TENEX estimates (old GDP projects)
-20
HEU
-6.4
-30
By the end of the current decade considerable amount of primary (Western) and quasi-primary (HEU-LEU) supply exits the market (over 20M SWU), ~25M SWU new capacity is expected to come on stream
Net supply increase is forecasted at 5.2 M SWU, as net demand increase will amount 18.9 M SWU
For the sustainable SWU market development it is critical to fill the gap by mainly primary sources of supply
Russian Enrichment Industry is capable to contribute to this task both in medium- and long-term perspective

8. TENEX Business Development
Main
Directions
Direct relationship with utilities
Priority to long-term contracts
Promotion of products with the maximum added value
Strategic partnerships with nuclear fuel cycle products and services suppliers
Flexible approaches based on priorities of the clients
Overseas sales network
Advantages of Russian geographical location
Transport and logistics infrastructure
Overseas stockpiles of uranium
Specific attention to regional market features

9. Market Instruments: Recent Developments (1)
Legal framework on the importation of uranium from Australia, Canada and the U.S. to Russia,
“1-2-3 Agreement” between Russia and Japan
First shipment of natural uranium from Australia in November 2012
First shipment of Russian EUP through Russian Far East Port in October 2012
Material Account System Development
Opening of TENAM Corporation office in Washington DC

10. Market Instruments: Recent Developments (2)
Saint-Petersburg Port,
Russian Federation
Enrichment
plant
Far East Port, Russian Federation
Conversion-enrichment plant
Tokyo Port, Japan
EUP trial delivery to Japan through Russian Far East Port
Natural Uranium Trial Delivery to the Russian Federation from Australia
Adelaide Port, Australia
Material stock accounts system Enhancement

11. Market Instruments: Recent Developments (3)
Transport and logistics infrastructure development:
Far East Nuclear Materials Transportation Route
Start of activities in Far East in 2010
Implementation of the Enriched Uranium Product Trial Delivery through Russian Far East Port
Russian port of Delivery: Vostochny port
Delivery time: reduced about 3 times
Experience in obtaining of all necessary licenses and authorizations in Russia
(including licenses for stevedoring company in Vostochny port and for sea carrier)
Vostochny Port
IZOTOP Company assistance for trial delivery via Vostochny port
Partnering with the largest Far East Container Terminal – LLC “Eastern Stevedoring Company”
Benefits:
- Shipping points diversification
- Reliability of supply improving
- Delivery time shortening
- European NFC products and services transit to Asia is possible
EUP Trial Delivery demonstrated the efficiency of new Russian Far East Nuclear Materials Transportation Route

12. Market Instruments: Recent Developments (4)
Development of the Natural Uranium Delivery System
November The first shipment of Australian natural uranium to the Russian Federation under a 2007 bilateral nuclear cooperation agreement
Benefits:
Enriched uranium and enrichment services contracts with increased contract terms flexibility in regards of using customer owned natural uranium of different origins
Material Account System
Delivery Management Agreements with all US and European Fuel Fabricators
Further Flexibilities Development in Process
More flexibility in delivery terms
Improvement of the service quality in the field of nuclear materials transportation and product delivery

13. TENEX’s Overseas Sales Network
TENAM
(Bethesda, USA)
INTERNEXCO
(Frankfurt, Germany)
TENEX-Korea
(Seoul, Republic of Korea)
TRADEWILL
(London, United Kingdom)
TENEX-Japan
(Tokyo, Japan)
2012
TENEX-Japan – the first direct contract execution with the delivery at Japanese fabricator
TENAM Corp. – Signing of EUP supply contract with a US utility under the Russian Suspension Agreement, as amended

14. THANK YOU FOR YOUR ATTENTION !