USEC CEO Cites Nuclear Nonproliferation Challenges and Successes; - In UN Council Speech, Timbers Identifies Failures, Achievements and Opportunities -.

Energy Editors/Business Editors

BETHESDA, Md.--(BUSINESS WIRE)--May 6, 2004

In a May 4 address before the Business Council for the United Nations, USEC Inc. President and CEO William H. Timbers called for the establishment of more nonproliferation partnerships between the government and private sector. In addition, Timbers acknowledged the threats to global security posed by the illicit use of nuclear weapons technology. He indicated that recent proposals by President Bush and the International Atomic Energy Agency are aimed at closing existing loopholes and arresting any further spread of the technology.

Private Sector Can Help Implement New Government Initiatives

Citing revelations of a vast black market that aided North Korea, Iran and others in developing nuclear weapons technology, Timbers pointed to proposals by the Bush administration and IAEA that would tighten international controls to ensure that peaceful nuclear programs are not used to advance clandestine weapons programs. The proposals would require countries beginning nuclear power programs to forego construction and operation of uranium enrichment and reprocessing operations in exchange for guarantees of nuclear fuel supply and removal of used reactor fuel.

Timbers said nations abandoning fuel processing programs "must be convinced that they will be able to obtain dependable and competitively priced enriched uranium from established global suppliers to fuel their existing or proposed nuclear power facilities."

He continued, "As a private sector company we are prepared, either alone or in concert with the nuclear fuel industry, to provide the necessary commercial assurances. These assurances can be backed up in a number of ways."

Alternatively, Timbers said, "if a single nation or group of nations wants to provide those guarantees, we will back them up with appropriate materials and value."

In his address, Timbers also described the progress of one of the largest and most successful nuclear nonproliferation programs, Megatons to Megawatts, and how it is helping to make the world a safer place by converting warheads once aimed at American cities into electricity.

Eliminating Nuclear Warhead Material

The Megatons to Megawatts program is a 20-year, $12 billion agreement between the U.S. and Russian governments to eliminate Russian highly enriched uranium equivalent to 20,000 nuclear warheads. USEC is the U.S. government's executive agent implementing the program. The warhead material is converted and recycled into fuel, and USEC purchases the fuel for use in U.S. nuclear power stations. Tens of millions of Americans receive electricity produced by this fuel--including the United Nations, Timbers said.

The program has yielded impressive results. To date, material from over 8,000 warheads has been recycled into nuclear fuel. "About one in 10 homes and businesses in the United States are powered with Megatons to Megawatts fuel," Timbers said.

He added that the resulting energy from the Megatons to Megawatts fuel is equal to what's produced by 4,000 supertankers of oil or 12 million railroad cars filled with coal and is enough to power a city the size of Boston for about 300 years.

Isaiah Reactor Proposal

Looking to the future, Timbers suggested that one way to secure and eliminate more nuclear weapons material was to recycle more of it into reactor fuel, as accomplished under Megatons to Megawatts. Timbers proposed constructing an advanced nuclear power plant that would be fueled by warhead-derived uranium.

Named for the biblical swords to plowshares prophet, the Isaiah Nuclear Energy Plant would be a private sector initiative backed by government support. The plant would use uranium fuel derived from more than 100 nuclear warheads for its initial fuel load, and each subsequent refueling would contain uranium from about 25 additional warheads. Over the projected lifetime of the Isaiah reactor, the equivalent of more than 2,000 nuclear warheads would be eliminated.

"We want to ensure that the existing warhead materials are safeguarded and eventually eliminated," Timbers said. "The Megatons to Megawatts program is a start. Isaiah nuclear energy plants can finish the job."

The complete text of Timbers' speech can be found in the News Room section of USEC's website, www.usec.com.

USEC Inc. (NYSE:USU), a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants.