Unlocking Hypergrowth: Our Bold Move in Nuclear Fuel

The nuclear fuel industry is a dynamic, multi-billion-dollar sector critical to global energy security, employing thousands and powering millions of homes and businesses worldwide. In 2023 alone, U.S. nuclear fuel facilities produced approximately 43.9 million pounds of uranium (U₃O₈, or triuranium octoxide), equivalent to about 19,900 metric tons, supplying essential fuel to civilian nuclear reactors nationwide.

At Aalo Atomics, we recently recognized the significant complexities, timelines, and investments required to develop entirely new fuel forms. Consequently, we strategically pivoted from Uranium Zirconium Hydride (UZrH) to the proven and economically favorable 8% enriched Uranium Dioxide (UO₂). Leveraging the established nuclear fuel supply chain allows us to scale our Aalo Pod deployments rapidly through efficient mass production, minimizing the risk of supply disruptions.

This existing fuel supply chain exemplifies industrial-scale mass production, aligning closely with Aalo’s strategy for factory-based nuclear reactor manufacturing. Many advanced reactor developers underestimate the massive scale, complexity, and investment required to recreate such infrastructure. Let's explore each stage of this supply chain in greater detail:

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Unpacking the Nuclear Fuel Supply Chain

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Mining and Milling

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Industry leaders, such as Cameco in Canada and Kazatomprom in Kazakhstan, extract and process uranium ore into "yellowcake" (uranium oxide concentrate). Together, they produce over 40,000 metric tons annually, efficiently meeting global uranium demands.

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Conversion

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Facilities such as Cameco’s Port Hope in Canada and ConverDyn’s Metropolis Works in the U.S. convert uranium oxide into uranium hexafluoride (UF₆). The sheer scale of these facilities ensures a steady and reliable flow of UF₆, whose physical properties are crucial for enrichment.

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Enrichment

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Enrichment capabilities are concentrated among Urenco, Orano, and Rosatom, collectively supplying nearly all of the world's enrichment needs. Urenco’s Almelo plant in the Netherlands, one of the largest globally, enriches uranium up to approximately 5%. Aalo recently had the privilege of visiting Almelo, where witnessing the complexity and precision of their massive centrifuge cascades was an unforgettable experience. It deeply impressed upon us the extraordinary challenges involved in establishing new enrichment pathways, particularly for higher enrichments like High-Assay Low-Enriched Uranium (HALEU), which requires significant new infrastructure and investment.

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Fuel Fabrication

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Fuel fabrication leaders, such as GE, Framatome, and Westinghouse, create uranium dioxide (UO₂) fuel pellets and assemble them into reactor-ready fuel bundles. Our visits to GE’s facility in North Carolina and Framatome’s site in Richland, Washington, demonstrated firsthand the decades of expertise, billions of dollars in investment, and meticulous quality control required to ensure safe, reliable, and repeatable fuel production.

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The Complexity of Exotic Fuels and High Enrichment

Many next-generation reactors depend on enrichments beyond the current 8% commercial standard. HALEU, once promising for its improved performance, encountered major setbacks when geopolitical tensions disrupted its primary supply route from Russia. In response, the U.S. Department of Energy (DOE) is investing hundreds of millions of dollars to establish a domestic supply chain for Highly Assay Low Enriched Uranium (HALEU). However, achieving economic viability for HALEU will require significantly more investment, scale, and time, which limits the near-term practicality of many advanced reactor projects.

These challenges extend beyond enrichment to the fuel form itself, affecting downstream processes such as deconversion and fuel fabrication. Many industry peers are working diligently to establish fabrication facilities for exotic fuel form factors,  as TRISO or metallic. Still, they can currently only manufacture these at low volumes due to limited demand. Demand, in turn, depends heavily on having operational reactors utilizing these fuel forms. At Aalo, we experienced these complexities firsthand when initially pursuing Uranium Zirconium Hydride (UZrH).

Establishing entirely new fuel supply chains, whether for HALEU or alternative fuel forms, demands immense investment, dedicated effort over multiple years, comprehensive regulatory approvals, and substantial operational experience. While it is possible, these endeavors significantly extend project timelines.

Recognizing the formidable challenges and complexities associated with building new fuel supply chains, Aalo strategically pivoted from our initial UZrH fuel to the proven and readily available 8% enriched UO₂ fuel.

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Aalo’s Pragmatic Pivot: Leveraging Current Supply Chain

In the past year, Aalo strategically aligned our reactor technology with the existing nuclear fuel supply chain. Transitioning to 8% enriched UO₂ wasn’t an easy decision; it involved intensive research and problem-solving regarding reactor physics, thermal management, and numerous hours of brainstorming with existing fuel suppliers. However, this learning journey taught us valuable lessons in agility and flexibility, prioritizing speed and economics.

Later this summer we’ll release an additional blogpost, where we'll dive deeper into the opportunities, challenges, and physics behind our transition to low-enriched UO₂ fuel.

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While we deeply respect our industry peers who continue to strive to make other fuel types commercially viable, Aalo’s mission is different.

We aim to achieve market viability and economic competitiveness, scaling nuclear power to an unprecedented level by the end of this decade, not in the 2030s. This is significantly ahead of many of our peers pursuing more intricate fuel pathways. For this, we need an existing, reliable, and scalable fuel supply chain. This aligns completely with our core philosophy of "no unobtanium," which emphasizes the use of proven, readily available materials and technology.

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Up Next: Securing Fuel Supply for Aalo-X

Even with established fuel infrastructure, securing reliable and scalable supplies for our ambitious growth isn’t straightforward. We’re proactively building robust commercial partnerships across the entire nuclear fuel cycle- mining, conversion, enrichment, and fabrication.

These early strategic relationships will enable us to select dependable supply chain partners, allowing for the confident scaling of fuel supplies for future Aalo Pods, designed to sustainably power data centers and beyond.

We have agreed to the preliminary commercial terms from Urenco. We are in the process of executing a formal contract to secure fuel for our first nuclear reactor, the Aalo-X.

Stay tuned for more insights and updates!