Correction: An earlier version of this story incorrectly identified the new NFS processes as converting uranium to a more potent form and said the company was seeking a new type of permit. News Channel 11 regrets the errors, which are corrected in this version.      

ERWIN, Tenn. (WJHL) — The federal government has awarded a $428 million contract to Nuclear Fuel Services (NFS) for the Erwin company to purify and convert uranium oxide to a metal form — a first for NFS and a process that has required it to seek a license amendment.

BWX Technologies (BWXT) spokesperson Laura Bailey sent a link to a Monday release from the U.S. Department of Energy announcing the contract with the National Nuclear Security Administration (NNSA). It is the second of a two-phase contract that came about after the government announced it would phase out an older process at a government-run facility at Oak Ridge, Tenn.’s Y-12 plant.

BWXT owns NFS.

Y-12 National Security Complex is working on new processes that could lead to a more modern method of purifying and converting uranium oxide to metal. An NNSA release says that conversion will involve both highly enriched uranium (HEU) and very highly enriched uranium (VHEU). The Department of Energy was seeking a bridge supplier when it first contracted with NFS in 2021.

The first contract for $57.5 million required NFS to design a process line “and demonstrate that it could convert uranium oxide to purified uranium metal while meeting the NNSA’s precise specifications…” according to a BWXT news release.

BWXT Nuclear Operations Group President Sharon Smoot said in the release that NFS “proved it could meet the rigorous requirements outlined by the NNSA.” Smoot added that the conversion process is similar to other work NFS performs and that the company is confident NFS can meet the Phase II requirements, “while maintaining a strong focus on safety and quality.”

While the work may be similar to other NFS processes, it has required the company to seek a license amendment from the Nuclear Regulatory Commission (NRC). A citizens group, Erwin Citizens Action Network (ECAN), filed to intervene in the request and opposes the license amendment.

So far, a three-judge panel has sided with NFS and against ECAN’s four main arguments — including a contention that NFS has a poor safety record — but the group has one last appeal in place. Without the licensure amendment, NFS would not be able to perform the work the just-announced contract calls for.

In response to ECAN’s contentions about NFS’s safety record, Bailey said the company has a strong safety record.

“We place the highest value on the protection of our neighbors, the environment and our employees,” she said in an email.

“We work closely with the Nuclear Regulatory Commission to meet stringent regulatory processes, and we have a highly trained staff that works under appropriate government oversight.”

According to the NNSA release, after NFS recycles and recovers HEU and then converts HEU and VHEU oxide to purified metal, the product will be returned to NNSA for storage and future use. The release says NFS will also be allowed to use parts of the purification and conversion line to produce fuel feedstock for potential use by naval reactors. Producing fuel for the country’s nuclear submarine fleet is NFS’s legacy purpose.

The BWXT release says NNSA holds the country’s enriched uranium inventory, which supports national security missions ranging from naval reactors and defense nuclear nonproliferation programs to office of defense programs.

“In addition to making an important contribution to our national security and research opportunities, this contract will enable NFS to support the local communities surrounding the site through small business contracts and additional employment opportunities,” NFS President Ron Dailey said in an emailed news release about the contract announcement.