Energy News: A New Uranium Boom?
By Ken Krahulec
Utah is the third-largest uranium-producing state in the U.S., having a cumulative production of about 130 million pounds of uranium oxide (U3O8). Production came to a halt in the early 1990s due to low uranium prices, but a resurgence in the market may be bringing a new period of uranium exploration and production to Utah.
The vast majority of Utah’s uranium production has come from small, low- to moderate-grade, sandstonehosted uranium deposits in the Colorado Plateau of southeastern Utah. These ore bodies typically occur in curvilinear trends along favorable ancient stream channels developed in continental basins. The principal sedimentary ore hosts in Utah are fluvial sandstones of the Upper Jurassic Morrison Formation and Upper Triassic Chinle Formation. Sandstone-hosted deposits typically average 0.1 to 0.6 percent U3O8.
Utah’s first uranium boom began in 1948 when the U.S. Atomic Energy Commission (AEC) set a guaranteed price and bonus schedule for domestic uranium ore, driven by the requirements of nuclear weapons production. Subsequently, the AEC set up six uranium ore-buying stations scattered across Utah. Utah’s uranium production grew rapidly during the late 1940s and on into the mid-1950s, peaking in 1958 at 8.9 million pounds of U3O8 from 392 small underground mines. Production then declined into the 1960s.
A second uranium boom began in the early 1970s with the development of the nuclear power industry. This phase of uranium development peaked in 1981—about 4.5 million pounds of U3O8 produced from an estimated 100 mines. Since the mid-1980s, Utah’s mines have had difficulty competing with lowercost foreign operations, resulting in rapidly declining production. By 1991, uranium prices were so low that Utah’s operations were no longer economic (about $40 to $50 per pound U3O8 in 2007 dollars) and all production ceased, followed a few years later by the idling of other underground uranium mines in the U.S.
The U3O8 price continued to decline through the 1990s and finally bottomed out in 2001 at about $8 per pound. During this period of low prices (1992 to 2003), few companies were actively exploring for uranium in Utah, and most of the old mines and associated facilities were closed and reclamation had begun. The most notable pending reclamation effort is the U.S. Department of Energy’s planned relocation of 10.5 million tons of old uranium mill tailings from along the Colorado River just north of Moab to a permanent disposal site 30 miles north near Crescent Junction.
Since 2001, the uranium spot price has rapidly escalated to over $70 per pound (April 2008). This price increase resulted from a lack of uranium mine development over the past couple decades, compounded by the recent increases in demand. The new higher uranium price has encouraged renewed exploration and development in Utah and may lead to the beginning of a third uranium boom.
Currently, all of Utah’s old uranium mines remain closed except for the Pandora mine near La Sal in eastern San Juan County and the Tony M mine near Ticaboo in southeastern Garfield County. The Pandora mine renewed operations in December 2006 and is currently producing at a rate of about 100 tons of ore per day. The Tony M mine is being redeveloped for production at a rate of about 350 tons per day in 2008. Both mines are owned by Denison Mines Corporation, the owner of Utah’s lone, active uranium processing plant—the White Mesa uranium-vanadium mill near Blanding, which is fully licensed by the U.S. Nuclear Regulatory Commission for ore processing and permanent tailings disposal.
The exploration and rehabilitation of several other old uranium mines is ongoing. The Whirlwind mine (Energy Fuels Inc.), on Beaver Mesa along the Utah-Colorado border about 28 miles northeast of Moab, is scheduled to begin production in 2008. This is an interesting operation because, while much of the underground mining occurs in Utah, the portal and surface facilities are a mile to the east in Colorado. A second plant, the Shootaring uranium mill at Ticaboo (Uranium One Inc.), is on standby but is pursuing operating permits and licenses.
Unmined uranium mineral resources remain at many known properties; the largest resource is the roughly 20 million pounds of U3O8 remaining in the Tony M–Bullfrog deposits in the southern Henry Mountains northwest of Ticaboo. Most of the current exploration and development work in Utah is focused on the Henry Mountains, La Sal, and Lisbon Valley (south of La Sal) areas. The Lisbon Valley mining district is Utah’s largest uranium district, having produced nearly 54 million pounds of U3O8.
The major issue affecting the future of uranium mining in Utah is whether nuclear power will ultimately be accepted as a clean, safe, and economical fuel producing substantial power with very low “greenhouse gas” emissions, or will it continue to be perceived as a potential environmental and safety hazard. Whereas the international community, led by France, Canada, India, and China, is rapidly adopting the more favorable view, the U.S. generally has not. If the new, international vision of uranium as a clean, “low-greenhouse gas” power source is adopted, Utah’s third uranium boom could last longer than its predecessors.
Survey Notes, v. 40 no. 2, May 2008