By Arunima Kumar
Feb 10 (Reuters) - Solstice Advanced Materials SOLS.O said on Tuesday it will expand production of uranium hexafluoride by about 20% at its Metropolis Works facility in Illinois by 2026, as rising nuclear demand strains the U.S. fuel supply chain.
The producer of specialty chemicals, which spun off from Honeywell HON.O in October, said the expansion would lift output to more than 10 kilotonnes from its planned output in 2024.
Metropolis is the only facility in the United States capable of converting uranium into uranium hexafluoride, or UF6, a key input for enriching nuclear fuel.
Nuclear fuel supply chains are tightening globally amid renewed interest in nuclear power, driven by energy security concerns and rising electricity demand from data centers and artificial intelligence.
"Our converting facility in Illinois is essentially sold out through 2030," CEO David Sewell told Reuters.
The expansion is supported by a backlog of more than $2 billion, driven by long-term customer orders, many from U.S. utilities, alongside Washington's goal of quadrupling nuclear capacity by 2050.
"I think it's a combination of both," Sewell said, referring to U.S. policy support and market demand.
"But the predominant reason for the expansion is our current customer base and the demand generation we're receiving."
Solstice said it was actively exploring additional projects to increase production at its Metropolis Works facility.
The Metropolis site is currently permitted to produce up to 15 kilotonnes, and the company has hired an engineering firm to study further de-bottlenecking as well as potential capital expansion.
Sewell added that there have been no discussions about the government taking an equity stake in the company.
Solstice supplies nuclear customers globally, though its status as the only U.S. converter gives it a strong domestic base.
Outside Russia and China, only a handful of conversion facilities operate worldwide.
(Reporting by Arunima Kumar in Bengaluru)
((Arunima.Kumar@thomsonreuters.com;))