A two-word phrase holds up the Pinon Ridge mill

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The Piñon Ridge Uranium Mill slated for construction in Paradox Valley west of Naturita, Colo., recently survived several legal challenges, but must overcome one more before it can officially break ground early this year.

PINON RIDGE URANIUM MILL

The site in the Paradox Valley where a uranium mill is slated for construction, if legal challenges to the mill fail.

The effort to build the second uranium mill in the U.S. to process fuel for nuclear power plants has not been without controversy and drama. Supporters are heralding the new jobs and energy independence the mill will bring, but detractors concerned about environmental contamination went to court to stop the factory and the area uranium mines that provide the ore.

Both sides have seen success.

In the past five years, Energy Fuels, a Canadian-traded company with a main office in Littleton, Colo., has been working to establish the $150 million plant off Highway 90 between Naturita and Bedrock within the uranium-rich Uravan Mineral Belt. The mill would process uranium ore using an acidleach process to produce yellowcake, a concentrated uranium product that is fabricated into fuel rods for nuclear reactors.

There are 104 nuclear power plants in the U.S. that currently receive most of their uranium fuel from overseas, according to industry trade publications. Vanadium, a by-product of uranium-mining used in steel alloys, would also be milled at Piñon Ridge.

Currently the White Mesa Mill, located near Blanding, Utah, is the only operating uranium mill in the country.

‘American uranium’

In October, Energy Fuels was granted a permit by the EPA for the construction of a tailings impoundment and evaporation ponds at the Piñon Ridge mill site and in March, the Colorado Department of Public Health and Environment approved a final radioactive- materials license for the operation.

“With the EPA approval, the permitting and environmental risk to our project is now behind us,” stated Energy Fuels CEO Stephen Antony in a press release. “This is significant for the domestic uranium industry and achieving this milestone brings Energy Fuels one big step closer to the production of American uranium and vanadium.”

Sheep Mountain Alliance, a Telluridebased environmental group, has been adamantly opposed to the Piñon Ridge mill, citing potential contamination of the watershed and air, and arguing that the Montrose County commissioners violated their own zoning laws in approving the plant’s special permit. Also, reclamation of previous uranium-mining in the Southwest has been grossly insufficient, opponents say.

“The Uravan area needs more clean-up and no one has a true picture of the lingering radiation and heavy-metal contamination left over from the past,” Jennifer Thurston, project coordinator for Sheep Mountain Alliance, told the Free Press. “Positive economic development from reclamation of old, abandoned mines creates long-term jobs and seriously needs to be done.”

State license challenged

On Dec. 18, the Colorado Court of Appeals upheld the special-use permit issued by Montrose County and challenged by Sheep Mountain Alliance, paving the way for construction to begin early this year.

But a key permit to proceed, a state-issued radioactive-materials license granted to Energy Fuels last March, is being challenged in Denver District Court by Sheep Mountain Alliance and the case is still under review.

“This is the most important of all the lawsuits, and the radioactive-materials license is the mill’s major permit,” Thurston said. “We feel there was never a fair and independent review of the mill and that it is on an unsuitable site near the Dolores and San Miguel rivers.”

On Feb. 4, 2010, Sheep Mountain Alliance filed a lawsuit in Denver District Court seeking to revoke the license. On Feb. 25 the Colorado Department of Public Health and Environment filed a motion to dismiss the suit. The court has yet to rule, but is expected to soon.

In its challenge, Sheep Mountain Alliance alleges several problems with the permit:

• State radiation regulators violated the Atomic Energy Act when they issued a license without providing for a public hearing in a formal setting.

• Colorado regulators violated state law when they issued a license to Energy Fuels before the company posted the necessary financial warranties of clean-up procedures at the mill. (Piñon Ridge is required to post a $11 million bond to the state for decommissioning the mill in the future.)

• Regulators ignored data that revealed groundwater samples taken at the Piñon Ridge mill site exceeded allowable standards for both radioactive materials and heavy metals, in violation of the Uranium Processing Accountability Act.

“For too long, state radiation regulators and the uranium industry have had a cozy relationship that has caused long-term contamination to continue unabated here on the Western Slope,” said Hilary White, executive director of Sheep Mountain Alliance. “That questionable relationship continues today as both Energy Fuels and the state try to argue Colorado residents have no seat at the table in trying to protect our clean air and water from uranium-mining and milling.”

‘Highly unlikely’

In a related victory for environmental groups, access to the uranium ore in mines needed for the Piñon Ridge mill will be at least delayed and maybe denied in some cases. In October, a federal judge ruled more studies are required to protect water, air, soil and endangered species from mine pollution on public lands leased for mining.

U.S. District Court Judge William Martinez halted the U.S. Department of Energy’s 42-square-mile uranium-leasing program in the Uravan mineral belt, which stretches across Montrose, Mesa and San Miguel counties, because it threatened the Dolores and San Miguel rivers and endangered species.

The 53-page ruling invalidates the DOE’s approval of the mine-lease program. It also suspends each of the program’s 31 existing leases; prevents the DOE from issuing any new leases; and shuts down further exploration, drilling or mining activity at all 43 mines approved under the program. The ban is pending on satisfactory completion of an environmental impact statement for the area as required under the National Environmental Policy Act and Endangered Species Act, according to the court decision.

The DOE and BLM had approved the mining operations and refused to conduct a comprehensive EIS in 2008, instead conducting a less-vigorous environmental assessment and then issuing a “finding of no significant impact,” which was also struck down by the federal court.

Five conservation groups sued the Department of Energy in 2008 for failing to adequately analyze mining impacts: the Sheep Mountain Alliance, the Center for Biological Diversity, the Colorado Environmental Coalition, the Information Network for Responsible Mining, and Rocky Mountain Wild.

“Even small amounts of some of these pollutants, like selenium, can poison fish, accumulate in the food chain and cause deformities and reproductive problems for endangered fish, ducks, river otters and eagles,” stated Josh Pollock of Rocky Mountain Wild in a press release.

Regarding the court decision, the Center for Biodiversity noted that “selenium and arsenic contamination in the Colorado River Basin from abandoned uranium-mining operations have been implicated in the decline of four endangered Colorado River fish species and may be impeding their recovery.”

In their now-void uranium-leasing proposals, the DOE let loose a bureaucratic Freudian slip of sorts in attempting to downplay potential impacts on endangered species, a semantic error the court could not ignore. A two-word phrase became a deciding legal factor in overturning the uraniummine leases.

Federal agencies are required under federal environmental law to consult with the U.S. Fish and Wildlife if their actions “may affect” endangered species and their habitat. DOE argued in court documents that it did not come to that conclusion, so no consultation was required with wildlife agencies.

But in his ruling Martinez disagreed, citing language in the DOE’s own environmental analyses that states: “Impacts to threatened, endangered, and sensitive fish in the Dolores River or downstream in the Colorado River would be highly unlikely due to the small scale of disturbances . . . . and lack of discharge into waterways during mining operations.”

Martinez cited federal law that specifies consultation with the FWS regarding endangered species is required when there is “any possible effect, whether beneficial, benign, adverse or of undetermined character.”

In the ruling Martinez concluded, “This may affect standard triggering consultation requirement is low and the Court holds that DOE’s determination that effects on listed species would be ‘highly unlikely’ satisfies this low ‘may affect’ standard. Thus, DOE’s own conclusion in the EA on this point triggered DOE’s duty to consult with FWS.”

In the meantime, DOE issued 31 uranium- drilling permits and approved five exploration plans, and their failure to consult promptly with Fish and Wildlife violated the Endangered Species Act, the court said.

“The decision is a strong statement to the Department of Energy that you have to do full and serious environmental analyses regarding uranium activity and not just conduct rubber stamp approvals for industry,” said Thurston.

The Uravan Mineral Belt leasing program has an estimated 13.5 million pounds of uranium ore. If and when it is mined, production is estimated at 2 million pounds annually.

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