The U.S. Department of Energy (DOE) announced today it was soliciting proposals to sell eight lots of Natural Uranium Hexafluoride (UF6) – up to 200 metric tons (MTU). Proposals are due August 17th and the anticipated award date of the sales agreement is August 31st. Delivery will be made at the Paducah (Kentucky) gaseous diffusion plant. Full payments for the eight lots are due by September 21, 2007.

The amount being offered for sale, in terms of U3O8 equivalent, represents less than 520 thousand pounds. The auction comes at a time when the spot uranium price has retreated.

“The spot uranium market has already shifted into a supply-surplus situation,” TradeTech chief executive Gene Clark wrote in an email to StockInterview.com. “Today's DOE announcement has added the largest single increment of supply on top of the surplus that existed already.”  Dr. Clark pointed out, “It reminds me of that old Morton® salt logo slogan: When it rains, it pours!”

StockInterview interviewed a representative of the U.S. Department of Energy in early May about the potential of an auction this summer. Previously, many market participants anticipated up to five million pounds U3O8 equivalent would be offered for sale. The present amount offered for sale falls into the modest-sum category, as we reported earlier.

According to today’s DOE news release, “This will be the final sale conducted under the authority of Section 314 of the FY2006 Energy and Water Development Appropriations Act as reenacted by the 2007 Revised Continuing Appropriations Resolution.”

Under agreements with the U.S. Enrichment Corporation (NYSE: USU), DOE has funded the publicly traded company’s cleanup of DOE Tc99-contaminated inventory of UF6 as a cost avoidance of future cleanup costs. The cleanup project is expected to be completed by September 2008 and closed out in early FY2009.

The uranium gas (198.5 metric tons) will be offered in eight separate lots: