by Anne Minard | September 27, 2012 4:56 pm
The uranium industry hasn’t gotten much play in the Four Corners area since its heyday during the Cold War. But with prices rising worldwide – and historic stockpiles diminishing – demand for the controversial ore is beginning to bounce back. Some of the highest-quality concentrations lie buried beneath Colorado, Utah and Arizona – and ready or not, the industry is coming to call.
The market’s optimism about uranium showed up here in a big way in late June, when the former owner of a handful of mines on the Colorado Plateau, Denison Mines, was bought out by Energy Fuels, Inc. The Ontario, Canada-based corporation has an operations center in Lakewood, Colo., near Denver.
Because of the acquisition, that company now owns four mines north of the Grand Canyon, one just south of it, and a uranium mill just over the state line in Blanding, Utah. They are also poised to revisit mining at their formerly held properties along a uranium-vanadium belt straddling the Colorado- Utah border that produced mightily in the past; that deposit spans parts of San Miguel, Montrose, and Mesa counties.
“There are other mines in Southwest Colorado that could be brought online in the next two to five years,” said Curtis Moore, director of communications and legal affairs for Energy Fuels.
Before Denison Mines offloaded its uranium mines in the Four Corners region, investor publications widely called Denison’s U.S. assets a “poison pill” that would make that company unattractive to potential buyers.
But Ron Hochstein, president and CEO of Denison Mines, who has a seat on the board at Energy Fuels, describes a different perspective. He says Denison was in a tough spot because its attentions were divided between uranium mines in the American Southwest, Saskatchewan, Zambia and Mongolia.
Energy Fuels, by contrast, is solely focused on developing the resource in the United States.
Besides that, Denison’s United States assets were overloaded with exploration projects, which tend to be rife with risk due to increasing legal and regulatory challenges in the permitting process. Denison Mines investors were having to bear the brunt of a United States portfolio imbalanced in that direction. Energy Fuels owns some mines elsewhere in the West that are already permitted and producing, with which they can balance the high costs of exploration, Hochstein said.
“Now the U.S. assets are more viable and better positioned than they were with Denison,” he said.
A checkered past
As an industry, uranium had its first bump during World War II and a full-on heyday during the Cold War. Southwest Colorado played a key role in that, although much of it was secret.
But during the 1980s, the U.S. government wound down its program to make nuclear weapons, so demand dwindled. Regionally, uranium producers retooled their efforts and began supplying nuclear power plants, according to Jennifer Thurston, director of the Telluride-based Information Network for Responsible Mining: “Then the Three Mile Island incident happened, and the market has been pretty much bust ever since.”
The original boom exacted its own toll on Colorado, Thurston said: “Colorado has had to spend $1 billion to clean up mill sites, and $120 million to clean up Uravan.”
There’s no trace left of Uravan, a town that used to border the San Miguel River; during post-mining cleanup, the EPA decided the entire town was so contaminated, it had to be completely razed.
“At one time, over 800 people lived along the tree-lined streets enjoying housing, schools, medical facilities, tennis courts, a recreation center and pool provided by the company,” reads an online memorial to the place, at uravan.com. “Though most physical traces have been erased between the canyon walls, its memories will live on here and in the hearts of the former residents.”
Perhaps surprisingly – since many of them lost family members to the effects of radiation – many of those former Uravan residents are among the Coloradoans eager for uranium-mining to return to the state’s economic scene.
“I think they see uranium as the only resource they have to develop their communities, despite the cost and despite their history,” said Thurston, who spent many hours interviewing members of the now-gone community as a journalist before taking her current role.
Across the state, there remain 1,300 abandoned uranium sites. State and federal agencies are still chipping away at remediating them.
And there are new potential sources of contamination, Thurston worries. For example, an attempt to start mining at one of Energy Fuels’ properties, the Whirlwind Mine in Mesa County, was abandoned in 2009 after the recession hit. There had been problems with contaminated water from the water- treatment system at the site, but “rather than dealing with it, they just decided to shut the system off and go into intermittent status,” Thurston says. Currently, Energy Fuels is allowing the mine to fill with water, which would have to be treated and discharged before mining could begin.
“Are they going to have the same pattern of violations that they had before? That’s my fear,” she said, adding that similar issues exist at the Energy Queen Mine, three miles southwest of La Sal in Montezuma County.
While Denison Mines’ Hochstein denies that the attention of environmentalists was a driver in the company’s decision to sell, “it certainly factors into the profitability and the risk that you have with the U.S. operations,” he said.
“I’ll be honest – it is a lot more difficult, with permitting and legal challenges, than any other jurisdiction that we’re in. The regulators now are so concerned about ending up in court.”
While those realities won’t weigh as heavily on Denison Mines any more, their successors will be fairly immersed on both the legal and the legislative fronts. Opposition is already rising to meet the recent announcement that Energy Fuels will start mining this fall at one of its new acquisitions, the Canyon Mine south of the Grand Canyon. And ongoing court battles surround the Arizona One mine to the north.
In Colorado, “really the biggest concerns are impacts to the rivers and the use of water,” Thurston said. For example, her group helped fight a plan by Energy Fuels to start operations at the Piñon Ridge Mill, 12 miles west of Naturita in Montrose County, because of fears that it would use significant amounts of water from the San Miguel and Dolores rivers, and could pose contamination risk to the Dolores.
In mid-June, a Denver District Court judge invalidated the mill’s license, saying the state failed to heed state and federal rules allowing for public input into the licensing process.
On the legislative side, Colorado House Bill 1161 passed in 2010, which requires every uranium mine in the state to complete some bookkeeping – including an environmental protection plan. The deadline is Oct. 1 of this year.
As Energy Fuels looks to its future, Hochstein quips, the regulatory and environmental issues will remain “part of doing business” on the Colorado Plateau.
Moore says Energy Fuels is actually eager to rise to the challenge.
“Quite frankly, companies should operate at a high bar,” he said. “Mining companies have changed a lot over the last several decades. You can’t make it in this industry now without having a big culture of safety and responsibility.”
And on the economic side, he’s optimistic. He says there was a bit of false hope for the uranium industry back in 2007, a strange run-up in prices that turned out to be a bit of a phantom.
“A lot of that was pure speculation,” he said. “A lot of people were worried about the world economies, so there was a big rush toward natural resources. There was not a market basis for that.”
The 2011 disaster at Fukushima evaporated that mirage. But now, prices are on the rise again – and this time, he thinks it’s real.
“There are about to be some pretty serious supply-and-demand imbalances,” he said. While Germany, Japan and the United States won’t be the big drivers for a new uranium boom, China, India, Russia and South Korea all have plans to build new reactors. For those countries, he says, nuclear energy makes good sense.
“Once a reactor is built, the fuel for it is very, very cheap,” he said. “Reactors put out a lot of electricity, and there’s a strong argument to be made that the nuclear industry is the safest way to produce electricity.”
And alongside that demand, the global supply is steadily decreasing, he says.
For starters, the end is near for the Clinton- era Megatons to Megawatts program that retooled old Soviet warheads to make fuel for nuclear reactors. Meanwhile, old stockpiles of uranium, holdovers from the Cold War, are dwindling.
Right now, Moore points out, the world uses about 180 million pounds of uranium per year, and the global uranium industry produces less than that, about 130 to 140 million pounds per year. Those stockpiles have been used to make up the difference, but they won’t last much longer.
So with demand growing, and some major supply sources drying up, he says, “the future seems fairly positive for us.”
Source URL: http://fourcornersfreepress.com/the-future-looks-bright-for-uranium-mining-in-the-area/
Copyright ©2018 Four Corners Free Press unless otherwise noted.