Uranium: the next boom
By Kelsey Dayton
December 7, 2012 --
There are a series of signs that mark the Gas Hills outside Riverton, explaining the history of uranium mining in the area. The first discovery, it reads, was made in 1953. The signs lay out the history of the uranium boom and bust. It ends with a sentence hinting the next boom is right around the corner.
That is what Strathmore Minerals Corp. is hoping.
The company is working through the permitting process to mine uranium in four major areas of the Gas Hills, said Jim Crouch, vice president and manager of Wyoming operations.
While there are several companies doing reclamation work in the Gas Hills, as of now, no company is mining uranium in the area, said Kristin Yannone, environmental and planning coordinator with the Bureau of Land Management. The BLM is working on a draft environmental impact statement for an in-situ recovery (ISR) uranium project proposed by Cameco Resources in the area, she said. The BLM is taking public comments on the draft, she said.
Strathmore is working with the BLM, as well as other agencies like the Department of Environmental Quality. It has submitted preliminary information for the permitting process to the BLM. Once underway the process could take up to three years to finish with the BLM, Yannone said.
"That assumes all the stars align," she said.
The BLM will create an environmental impact statement, required whenever there is going to be surface disturbance greater than 640 acres.
Strathmore's project for open-pit uranium mining spreads across 35,000 acres, the company's entire land holdings. Surface disturbance for the four different mine sites will be just a couple of thousand acres, Crouch said.
The company believes the Gas Hills is one of the best undeveloped uranium districts in the United States.
"The way Strathmore approached this is, if you are hunting for an elephant, you go to elephant country," Crouch said.
If everything goes perfectly — which is rare in large projects like the Strathmore's proposal — the company could have product by the end of 2015, Crouch said. The company already has final designs for one area and three other preliminary designs. The goal is to eventually produce about 1 million pounds a year, Crouch said.
When up and running the operation will provide up to 200 new jobs, Crouch said
The Gas Hills area has long been known as uranium rich. More than 100 million pounds of uranium were produced through the years by different companies in the area. Mining began extensively in the early 1950s, Crouch said. The last big production was in the 1980s. Uranium mining dwindled, not because the resource wasn't there, but because the price fell, Crouch said.
The price fell because demand dropped after the Three Mile Island partial meltdown in 1979 followed by the Chernobyl disaster of 1986. Demand dropped and the price followed.
The price of uranium had begun to climb back up along with demand, but on March 11, 2011 an earthquake and tsumani struck Japan. That disaster triggered a meltdown at the Fukushima Daiichi nuclear power plant , which, after a series of equipment failures, released radioactive materials into the environment. Although only about one-tenth as severe as Chernobyl, the Fukushima meltdown triggered another backlash against nuclear power, but this backlash was tempered by the world's need for power. According to the World Nuclear Association, about 160 power reactors with a total net capacity of some 177,000 MWe are planned and over 320 more are proposed
Strathmore is optimistic about the future price of yellowcake (partially processed uranium) which is already increasing. On the open market, yellowcake is selling for about $41.50 per pound, Crouch said. The long-term contract price of yellowcake is about $60 to $61 per pound. Long-term contract, which makes up about 90 percent of the uranium market, is when companies contract with buyers for years to supply a certain amount of yellowcake.
"Our plan will definitely be to provide long-term contract," Crouch said.
It's not unheard of for companies to start selling contracts for uranium before it's out of the ground, but Strathmore has not made any sales yet.
Plans for the project include working near old mining pits because it's known uranium is in the area. Strathmore will extend old mine sites for new production.
Strathmore started acquiring the properties it hopes to mine starting in 2004 and work on the project, including preparing for permitting, began in 2007.
The potential of the project could lead Riverton and Strathmore to become a reliable supplier of domestic uranium once it's up and running, Crouch said.
A U.S. agreement with Russia, in which Russia supplied recycled uranium suitable for nuclear weapons to the U.S., will end in 2013, Crouch said. That agreement supplies more than 30 percent of uranium used in the nation, Crouch said. The loss of Russian uranium will open up new demand and opportunities for uranium production in the United States, he said. The U.S. government has a supply of Yellowcake of unknown size for aircraft carriers and submarines, Crouch said. So what the demand will be in the future is still uncertain, including where the prices might go.
"We, of course," he said, "are very optimistic."
Wyoming Business Report freelance writer Kelsey Dayton lives and works in Lander.