Uranium industry set to boom

by Buckley Jensen

Major news articles in the Denver Post and Deseret Morning News report on speculation that a major uranium boom, not unlike the one that transformed the area in the 1950’s, is just around the corner. (The following summarizes the articles.)

Such speculation is fueled by the current price of uranium at $138 per pound, up from $7 per pound as recently as 2002. With worldwide uranium production 80 million pounds behind demand, the price could rise to $200 per pound or higher in years to come.

There are currently 440 operating nuclear power plants in the world, with another 100 planned. This will only increase the demand.

With the only federally-licensed uranium mill in the United States located south of Blanding, and with that mill nearing the completion of a $15 million overhaul preparatory to switching exclusively to the milling of uranium yellowcake, the impact may be felt in this area as much as anywhere in the country.

A long-awaited order to buy ore at the Blanding mill may be released this week. “We can take as much as they can deliver, and this should kick off activity and be the beginning of a long-term revival,” said Ron Hochstein, president and chief operating officer of Dennison Mines Corp., the company that owns the White Mesa Mill.

“This is the slowest boom I’ve ever seen,” joked long-time miner Johnny Dufur, whose family sits on 70 claims in southeastern Utah. His sentiments are no doubt shared by Mitch Shumway, whose family has been mining for generations and has about 100 claims around Blanding.

Shumway and many of his miner friends have been gearing up for the time the mill starts buying ore again. They have also struggled through the maze of paperwork to obtain the necessary permits.

Claim-staking requirements, environmental regulations and the entire permitting process are more time consuming and expensive than during the last boom. This fact may preclude some small miners from operating their own mines.

Even so, more than 18,000 new mining claims have been filed in the past year in Utah and Colorado. The number of uranium companies staking and buying these claims has risen from ten to more than 400 over the past two years.

The Utah-Colorado area holds a rare combination of uranium and vanadium – both processed from the same ore. The price of $8 per pound for vanadium adds additional value to the price of the ore being mined in the area.

Energy Fuels Inc., which owns 22 blocks of claims, is planning to submit permit applications by year’s end for the construction of a new mill in the west end of Montrose County, Colorado. “We believe there is plenty of room for two mills,” said George Glasier, president of Energy Fuels Resources.

Glasier went on to say that some of Energy Fuels mines, at today’s prices, can bring in $800 to $900 worth of uranium and vanadium for every ton of ore mined. He further estimates that if their Whirlwind Mine operates for 20 years at today’s prices, it could produce over a billion dollars in uranium and vanadium.

SXR Uranium One, another large Canadian firm, recently purchased the uranium mill at Ticaboo, in Garfield County. That mill has been closed for 20 years, but SXR hopes to be able to successfully reopen in the not too distant future.

This massive uranium renaissance has been a long time coming. It will be a different industry, with far more regulation than the first time around. But with the price at $138 per pound and climbing, there is an army of determined people who have waited more than a generation and who have every intention of becoming part of uranium's rebirth on the Colorado Plateau.


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