Copyright © 2017 URENCO Limited

l1RENCO USA Update Presented to:

Radioactive &

Hazardous Materials Committee

7/28/17

Presented by:

David Sexton

UUSA President & CEO

URENCO USA Company Update

• Overview of URENCO USA (UUSA)

• Contributions to the Local Economy

• What are some of our challenges and opportunities?

• What's next for the nuclear industry and UUSA?

2

An Overview of URENCO USA

URENCO USA Overview

• UUSA is one of four facilities that make-up the URENCO fleet and is the newest, most efficient plant

• tJUSA enriches uranium which is a key step in the nuclear fuel cycle

• UUSA is the only commercial uranium enrichment plant in North America

• UUSA was the first nuclear project in the US in almost 30 years and the first to use the Nuclear Regulatory Commission's (NRC) Construct-Operate License

4

URENCO USA Overview

• UUSA was granted its NRC license in June 20 0 6 and began initial operations in June 20 10

• Currently, URENCO has invested approximately $48 in building out the UUSA plant

• UUSA is currently producing 4.7M SWU and is licensed to produce up to 1 OM SWU

• UUSA produces roughly 1 /3 of the US demand for enrichment services, which provides 5°/o of total electricity demand

The Nuclear Fuel Cycle

Waste

Management

Fuel

Reprocessing

US and Global Nuclear Fuel

Supply & Demand

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800/o -+--

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UUSA Site 2006

UUSA Site Today

UUSA Site Today

UUSA Site Today

Contributions to the Local Economy

12

UUSA Contributions to the

Local Community

RICHIE ENRICHMENT

SCIENCE WORKSHOPS

• 2,500 STUDENTS REACHED

• NEW CURRICULUM DEVELOPED

• HIGHLIGHTED DURING NUCLEAR SCIENCE WEEK

• K-3 SUMMER SCHOOL PROGRAM

• HUNDREDS OF RICHIE WORKSHOP GRADUATES SEND

"THANK YOU" NOTES TO UUSA

• OVER 150 UUSA VOLUNTEERS PARTICIPATED

tJLISA Contributions to the

Local Community

Modular Building & Furniture Donations • 19 Building Donations • Over $30,000 of furniture donations to Habitat for

Humanity • Office furniture and supplies donated to the area schools

and non-profit organizations

UUSA Contributions to the

Local Community

Modular Building & Furniture Donations

• Boys & Girls Club URENCO USA

• Boy Scouts

• CASA of Lea County

• Economic Development Corporation of Lea

County

• Guidance Center of Lea County

• Habitat for Humanity

• Heart's Desire • Hobbs Police Department

• Lea County

• Lea County Sherriff's Office

• Lovington Police Department

• Lovington Schools

• Loving Schools

l.JUSA Contributions to the

Local Community

• United Way of Lea County

• Since 20 0 8, UUSA has been the largest contributor to United Way with company and employee donations surpassing $1.2 M

• Employee Volunteering

• Last quarter, UUSA employees logged over 1, 0 0 0 hours of volunteering time

• 9/11 Day of Service

• Each year since 20 0 9, approximately 20 0 volunteers make repairs to homes and other community improvements to honor those who lost their lives on 9/11

• Over the course of this project, UUSA has helped to improve the homes and lives of over 15 0 seniors in the area

16

An Overview of Market Conditions

in the Nuclear Industry

Nuclear Energy Market

IDemand < Supply

Demand • On March 11, 20 11, the earthquake that hit off the coast of

Japan resulted in a tsunami that fundamentally changed the future of the nuclear industry

• The following immediate impacts were due to Fukushima • -12°/o of global nuclear generating capacity went offline

almost immediately when Japan shut down its nuclear fleet • Germany decided to move away from nuclear energy and

at the completion of their phase out, another -3°/o will go offline

• New build programs in China and South Korea were significantly delayed

18

Nuclear Energy Market

Demand < Supply

Supply

• Utilities alone are holding a four-year inventory of uranium.

• Governments and producers are holding additional

inventories.

Ux SWU Price (Spot vs. long-Term) s BO ll.llSSESWU © UxC.com

• x -1 SWU Price

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Nuclear Energy Market

Generating Capacity

Forecast (2008 - 2030)

# Reactor Units Nuclear Generating Capacity (MWe)

600 -,---------------------------------------. 550,000

550

500

450

400

350

300

250

200

150

100

50

2008 2010 2012 2014 2016 2018 2020 2022

-North America -western Europe - Eastern Europe

c:::::::JAfrica & Middle East -south America -.:-Total MWe

2024 2026 2028

Asia & Oceania

2030

525,000

500,000

475,000

450,000

425,000

400,000

375,000

350,000

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20

Nuclear Energy Market Reactor Construction

/�?AiUJ,.i.m Highest level of construction in twenty five years: 60 reactors worldwide

Russia China

China 2016:

5 reactor starts

2 construction starts .India

China 2015:

8 reactor starts

6 construction starts

Pakistan e • France

8 Finland Belarus e

• Brazil

Chinese A • .

.UAE

V Argentina A Taipei

3 • South Korea

Slovaki

NUCiear � towards the Harmony goal; providi119 reliable and deM elecincrty WOl1dwlde Agneta Risng, Cwedof General

Japan

Source World Nuclear Association 12

Nuclear Energy Market Consumption

/ WORU) NUCLEAII Accelerating rise in world electricity consumption

20000

16000

12000

Global credit crunch

Dot�m bubble burst

Asian economic cns1s

8000

Black Monday stock market crash

US recession

2nd oil-price shock

1st oil-pnce shock

4000

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Year

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1985 1990 1995 2000 2005 2010

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2 22

The Future for the Nuclear Industry

Industry Challenges & Opportunities

Challenges

• Demand<Supply

• Cost of operations and steep entry cost for new builds

Opportunities

• Continued growth in international markets

• Small Modular Reactors (SMR)

• UBattery

• Decommissioning, interim storage, & disposal

24

Nuclear Energy Market

URENCO's Response

• URENCO is strategically realigning the company, taking advantage of our market strength and global position to ensure that we remain a sustainable business moving forward.

• To accomplish this, we are taking a 3-pronged approach:

• Optimizing the way we do business

• Exploring growth opportunities to maximize our future sales

• Expanding our technological capabilities to more broadly serve the nuclear industry

URENCO USA's Path Forward

• l!JRENCO continues to believe that the world will need nuclear to meet the increasing demands for sustainable energy production and that we will be well positioned to be a significant part of this solution.

26

Questions?