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Sitting on uranium stockpile

The rump of the bankrupt bank Lehman Brothers is sitting on a stockpile of 200,000 kg of uranium “yellowcake” which could be used to power a nuclear reactor or, theoretically, to make a bomb.

Lehman’s potentially explosive asset is a hangover from a commodities trading contract undertaken before the Wall Street bank went bust in September. Yellowcake is a solid form of mined uranium which is yet to be enriched.

Liquidators have been trying to offload the stuff for months. But the price of uranium has been dropping, leaving Lehman’s yellowcake in a variety of secure storage facilities, some of them in Canada.

Bryan Marshal, Lehman’s chief executive, who was appointed to salvage value for creditors, said that the stockpile, which is worth about $18m, would be sold responsibly. “We plan on gradually selling this material over the next two years.”

The price of uranium has slumped from $65 per lb to $40.50 as pressure on recession-hit commodity investors to liquidate their assets has eased.

Yellowcake can be purified and enriched to fuel nuclear reactors or, notionally, weapons. A lively financial market in uranium trading has developed in recent years. While commodities such as oil and precious metals are dealt in futures contracts which rarely see delivery, the relative immaturity of uranium trading means that dealing firms sometimes end up taking ownership of the stuff.

Lehman’s ownership is governed by tight regulations. Its yellowcake must be stored at licensed facilities. One trader said: “They’re not holding it in Canary Wharf. There are very strict rules about what you can do with it.” — © Guardian Newspapers Limited, 2009

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