WASHINGTON, Oct 17 (Reuters) - The U.S. rolled out

initial contracts to four companies hoping to produce a new,

more highly enriched uranium fuel for an expected wave of

high-tech reactors, the U.S. Energy Department said on Thursday.

Russia is currently the only country that makes the fuel

called high-assay low-enriched uranium fuel, or HALEU, in

commercial volumes. Funds to make the fuel domestically were

included in a law to ban uranium shipments from Russia fully by

2028.

Centrus Energy ( LEU ) said its subsidiary, American

Centrifuge Operating, got a contract to produce HALEU, which is

expected to be used in a variety of small modular reactors

planned to be built starting around 2030.

The other companies are Urenco USA, which is a British,

Dutch, German firm with operations in New Mexico; Orano USA,

based in Maryland with global headquarters in France; and a

company called General Matter.

Urenco said it got a contract for 10 years to make an

"indefinite quantity" of HALEU.

President Joe Biden's administration believes nuclear power,

which generates virtually emissions-free electricity, is

critical in fighting climate change and to meet rising power

demand from artificial intelligence and other consumers.

"All contracts will last for up to 10 years and each awardee

receives a minimum contract of $2 million, with up to $2.7

billion available for these services, subject to the

availability of appropriations," the Energy Department said.

The ultimate amount of money associated with the award

depends upon orders issued by the U.S. Department of Energy,

Centrus said.

HALEU is uranium enriched to between 5% and 20%, which

backers say has the potential to make new high-tech reactors

more efficient.

HALEU's critics say it is a weapons risk if it gets into the

wrong hands and recommend limiting its enrichment to between 10%

and 12% for safety. Uranium fuel used in today's reactors is

enriched to about 5%.