The US Energy Department will not transfer its surplus uranium supplies to the market in 2011 to honour a previous agreement with uranium producers, it has been announced.

The department has plans to transfer up to 1,125 tons of extra uranium a year to USEC to pay for the clean-up of the Portsmouth uranium enrichment plant in Ohio, reports Reuters.

Excess uranium in the market would take away business from domestic uranium producers and might cause depressed prices impeding operational growth for producers.

The department has 59,000 tons of natural uranium inventories since the Cold War and is releasing the stocks gradually over about 25 years.