U.S. and South Korean Nuclear Companies Sign Agreement

American nuclear enrichment company Centrus has a deal to explore a closer partnership with two South Korean companies. (Courtesy Centrus)

Two South Korean companies agreed to explore a closer partnership with American nuclear enrichment company Centrus late on Monday, a sign of cooperation between the two countries on civilian nuclear technology.

The agreement comes as the U.S. and South Korea work toward a trade deal. Korean President Lee Jae Myung met with President Donald Trump in Washington, D.C., on Monday, pledging cooperation in several industries, which could include nuclear energy and shipbuilding. Commerce Secretary Howard Lutnick attended the deal-signing, according to Centrus.

Centrus shares were up 1.3% in after-hours trading, and have risen 380% in the past year as investors have flocked to nuclear-related stocks. Nuclear exports are likely to help several companies.

As part of the agreement, Korea Hydro & Nuclear Power, a major nuclear reactor developer and operator, will plan to increase its fuel purchases from Centrus’ centrifuge plant in Ohio. The two companies had already agreed to a fuel deal in February.

In addition, Korean energy infrastructure company POSCO International will look to make investments in the Centrus plant.

The deals are memorandums of understanding and not firm financial agreements, and they are contingent on Centrus deciding to move ahead with the expansion. Centrus is competing to get funding from the Energy Department to expand its enrichment capacity, which it says will allow it to compete with foreign state-owned enterprises.

Centrus enriches uranium, turning the material into useful fuel for nuclear reactors. The U.S. has almost no nuclear enrichment capacity of its own, so it depends on Russia for the lion’s share of enriched fuel for reactors. Congress banned Russian uranium last year, with exceptions that allow the fuel to continue coming to the U.S. for now.

Write to Avi Salzman at avi.salzman@barrons.com