On October 18th, the Biden administration has awarded contracts to Centrus Energy and Orano SA, among other companies, to develop the high-assay uranium needed for new advanced nuclear reactors.$Centrus Energy (LEU.US)$

These contracts will involve up to $2.7 billion of government funding, with the specific amount depending on the orders issued by the US Department of Energy in the future. General Matter and the operating Urenco New Mexico uranium enrichment facility by Louisiana Energy Services are two other companies receiving funding.

This type of nuclear fuel, known as high-assay low-enriched uranium (Haleu), is used to power small modular reactors. Unlike traditional reactors, these reactors can be factory-built, transported by truck or train, and assembled on-site. Currently, the only supply source of Haleu with concentrations between 5% and 20% is Russia.

This funding is part of the Biden administration's multibillion-dollar plan aimed at reducing America's dependence on cheap enriched uranium from Russia and helping to restart the long-stagnant US uranium enrichment industry and other professional services needed for nuclear fuel production. Earlier this year, a ban on importing Russian reactor fuel took effect, but the legislation allows limited waivers until 2028 for the US Department of Energy to implement.

Earlier this month, the US government awarded similar nuclear conversion service contracts, which involve converting gaseous uranium hexafluoride into oxide suitable for fuel production after enrichment.

At Thursday's close, Centrus Energy rose nearly 5%. The stock is up 49% year-to-date.

It is worth noting that as Amazon (AMZN.US), Microsoft (MSFT.US), and other technology giants actively embrace nuclear energy, the US stock nuclear power sector has surged, with NuScale Power (SMR.US) up nearly 450% year-to-date, NANO Nuclear Energy (NNE.US) up 370% year-to-date, and Vistra Energy (VST.US) up 230% year-to-date.