Nuclear Fuel Services, Inc.

1205 Banner Hill Road

P.O. Box337, MS 123

Erwin, TN 37650

www,nuclearfuelservices.com

(423) 743-9141

21G-08-0119

GOV-01-55-04

ACF-08-0217

August 7,2008

Director

Office of International Programs

U.S. Nuclear Regulatory Commission

Attention: Document Control Desk

Washington, DC 20555

References: 1) Docket No. 70-143; SNM License 124

2) Letter from NRC (M. M. Doane) to NFS (B. M. Moore) [ 15N060227], dated

November 8,2006

Subject: Notification of Intent to Import Natural and Depleted Uranium Material

Dear Sir/Madam:

In accordance with the request of the NRC in Reference 2, Nuclear Fuel Services, Inc. (NFS) hereby

advises of its intent to import natural and depleted uranium material from Nuclear Fuel Industries,

Ltd. (NFI) of Japan. A contract for this receipt between NFI and NFS is included as Attachment 1;

financial and other NFS proprietary information has been redacted from the contract. The NU and

DU material was used by NFI as surrogate material during the start up oftheir fuel fabrication

facilities. These facilities are in operation producing enriched uranium fuel for commercial reactors

and, therefore, no longer have a need for this start-up material.

NFS intends to use the NU material as feedstock in the downblending of HEU where feasible. NFS

may also use the material as a surrogate to test processes and/or process equipment or sell or broker

the material to other laboratories, manufacturers, or brokers. Disposition of the material will depend

on the physical and/or chemical composition of the material and the availability of markets and/or

customers.

The DU material will be supplied to Manufacturing Sciences Corporation (MSC) located in Oak

Ridge, TN, and with whom NFS will have a contract based on a current proposal. MSC

manufactures commercial products from DU such as shielded containers for radioisotopes and

catalysts for the manufacture of plastics. With virtually all of the DU material in the United States

being in the UF6 form, this is a very attractive opportunity for MSC as they do not have the capability

to convert UF6 to the only form they can process, which is metal or oxide. A copy of MSC's

Radioactive Material License is included as Attachment 2.

21G-08-0119

GOV-01-55-04

ACF-08-0217

Your timely concurrence with this proposal will be appreciated. If you or your staff have any

questions, require additional information, or wish to discuss this, please contact me, or Mr. Rik

Drake, Licensing and Compliance Director, at (423) 743-1741. Please reference our unique

document identification number (21G-08-0119) in any correspondence concerning this letter.

Sincerely,

NUCLEAR FUEL SERVICES, INC.

JWB. Marie Moore

Vice President

Safety and Regulatory

RPD/pdj

Attachments

Copy:

Kevin M. Ramsey, Project Manager

Fuel Cycle Facilities Branch

Office ofNuclear Material Safety and Safeguards

U.S. Nuclear Regulatory Commission

Washington, DC 20555

Mr. Manuel Crespo, Project Inspector

U.S. Nuclear Regulatory Commission

Region II, Atlanta Federal Center

61 Forsyth Street, SW, Suite 23T85

Atlanta, GA 30303

Mr. Stephen Burris

Senior Resident Inspector

U.S. Nuclear Regulatory Commission

Attachment 1

■ Delivery Agreement

Nuclear Fuel Industries, Ltd. and Nuclear Fuel Services, Inc.

This agreement (hereinafter, the"Agreement") is made by andijetween Nuclear Fuel

, Industries■(hereinafter referred to as "NFT), with headquarters at 3-14-10 MHa, Minafoku,

; Tokyo 168-0073, Japan, arid Nuclear Fuel Services, Inc. (hereinafter referred to as "NFS'1), a

USA. This Agreement is made eS^ve

I Hereinafter, NFI and NFS are called "CompanyT or ''Companies", as the c$se may be.

I 1.0 Scope .,.,:, , , ,: .■:.•'... : .. . _ .-.. ._. • .. . . ■

uranium

! (DU)toNFS.TherWandDUwfllbemmeclieinicalfonnofin«u

; form ofpowder. The quantities ofmaterial are summarized in Section 3.0. A preliminary list and

• description ofthe materials are included in Appendix 1. The NU and DU will be delivered to

i NJFS^spbcdntractor, Manufacturing Sciences Corporation (MSO), located at 804 South Illinois

Ave., Oak Ridge, TN 37830. ; • •

2.0 Responsibilities of the Parties "■ * -

2.1NFI .-;-. ' -:- . ; :. ■ •• . ' ;• ■■•-- ;='••,

■; ■rObtam.allapprovals, permits, etc. required by Japanese regulatory authorities for the

►xide powder that meets the particle size specified in

Perform testing on a randomly selected test sample from eachJiomogeneous lot Clot" is

defined in Article 3.0) ofmaterial to confirm compliance with the impurity limits

specified in Article 4.0. '

^^^^®^^^S^^ '

release for unrestricted. use to-scRo'ritom^^i

25 kg uranium oxide/ package.' . -. ^' • i, •%

Fjrepate a mate^alpackagihgLplan, WW_I!

and

a^-ejc reqiu^d by regulatory authorities in theUS for^e-v^; ■ .r '

lj|5^igi^i^djjprs^tuiel^t0.per&nn;iandoni^&JIj^fii^|^v = '■ ;

«iaod;ioadiig:the NT-DC pabkages.intd theKG^nt^&VIfluch

?:i*^;shaJl\be responsible for ail travel and i^pr cbsfe.;.,y ;

;ui5*v»'^f, . '

ag!

■ Provide labor, supervision, and handbag equipment for unloading the ISO containers

from the trucks, at MSC's facility.

■ Provide NFI with a receipt notice indicating NFS's receipt ofNU and DU, inner

I packages and NT-DC packages upon completion ofthe unloading ofthe ISO containers at

MSC's facility. The title ofNU and DU, inner packages and.NT-DC packages shall

transfer from NFI to NFS at the time ofcompletion ofthe unloading ofthe ISO

containers.

■ Provide interim storage ofthe NU and DU as needed, until all-material is recycled. No

uranium or packages will be returned to NFI.

_ " Pay all costs associated whh recycling the materials and disposal ofthe inner packages

and NT-DC packages.

■ Report transfers ofNU and DU from NFS to third party users or processors in the US to

•US regulatory authorities, in accordance with USregulations. .

■ Report to NFI, at least one time per year, the status ofthe inventory heldby'NFS. After at

least 90% of the uranium has been recycled, NFS shall no longer be required to report.

■ Limit all uranium recycle to peaceful uses.

I 3.0 Quantity

The quantities ofmaterials are:

NU=i,64llkgU63ude

6,460 kgU oxide

Variationsup to ten percent (10%) ofthe above quantities are allowable. . -. .-

NFI will provide to NFS a preliminary inventory list as an attachment to this Agreement and a

final inventory list no later than 30 days prior to shipment. The inventory list shall include the

batch designation, classification as NU or DU, weight ofeach batch, chemical form, the lot

number, and reference to the test report for the sample tested for impurities from that tot (Article

. . 3 ' ■

4.4). A "batch" is the uranium oxide-contents ofone inner package (maximum 25 kgs). A"lot' is

a mixture ofbatches that have been processed together and have essentially homogeneous

chemical composition. Alot size will not exceed 1Q00 kg.

4.0 Material Specifications .,

4.1 Form .

A11MJ and DU will be in the form ofuranium oxide powder. .

4.2 Particle Si?» . ;

The'ufanium oxide powder particles shaE be less than 0.5 mm in diameter.

4.3 Impurity Limits : '

NFI will guarantee mat the content of five impurities written below is less than each limit and

guarantee that Gadolinium is not included.

• •n-i.6wt% .• . • .•.•'-..•',

Cr-20ppin.. .. ■. ■ ...

Fe-250ppm

Ni-50ppm.

Cu - 35 ppm •

4.4 Certllication .

NFI shall submit to NFS the certifications ofthe material specifications for each homogeneous

lot ofuranium oxide. NFS will provide the certification form-

5.0 Warranty ....

NFI warrants tfiat the uranium being provided has not been irradiated and has not been, subject (o

any^Uenrichment.process, ' . • .

6.0 Material Packaging • .