NYNCO and AMMC are now open for business and is in the process of on boarding customers and generating ElectronicWarehouse Receipts (EWRs).  A legal requirement for warehouse receipts is the publication of a tariff or fee schedule, and the first tariff is now available. The tariff details AMMC’s charges for “creating” allocated material from comingled material at ConverDyn, storage of the material, transfer to other owners, charges for “redeeming” the material back into comingled form at ConverDyn, book transfer delivery to uranium enrichers, and delivery for physical removal or “extraction” from ConverDyn. AMMC creation charges are zero. AMMC’s storage and transfer fees, detailed on the tariff, are on the same order of magnitude as those currently being paid by owners in base metals and are much lower than oil, gas and refined products. Storage charges depend on volume stored in a customer’s account, and run from 1.25 percent for large quantities to 1.90 percent for small quantities. Fees for transferring material from one owner to another run from 0.30 percent to 0.50 percent. Fees for delivery back into comingled accounts at ConverDyn run from 0.30 percent to 0.50 percent. Detailed fees for delivery to uranium enricher and for extraction from the facility are also presented in the tariff.  Other detailed information required in a warehouse receipt tariff is also present such as title issues, warehouseman’s liens, insurance, damage and loss, taxes, etc.

The Uranium EWR was developed with commodity owners in mind, but as explained in the latest issues of FreshFUEL, the traditional nuclear fuel market participants will see benefits to creating and trading them as well. Commodity owners seeking to diversify into uranium often require clear and secure title to physical materials for risk management and funding. EWRs provide simple proof of title and ease of transfer. Consequently, as with other commodities, the receipts satisfy the liquidity, cost, risk management and financing requirements of financial owners wishing to gain exposure to uranium.

Uranium producers and utilities will also find value in having clear and secure title, including for risk management purposes, and for the potential to finance their inventories. Perhaps even more importantly, however, since the Uranium EWR satisfies the requirements of a larger pool of financial owners, new active players will enter the market. A larger, more active market means liquidity and diversification benefits for traditional market participants.  AMMC provides secure storage, title and transfers for EWR owners. Its agreement with ConverDyn allows customers to create Segregated Units of Uranium (SUUs) of identifiable 250 pound lots of U3O8 (contained in UF6) for which unique, negotiable EWRs will evidence title in accordance with Article 7 of the Uniform Commercial Code.