(December 15, 2006) During the course of the year 2006, the uranium spot market price continually climbed by 81% from 36.25 to 65.50 US$/lb U3O8 (according to UxC as of Dec. 11), or by 78% from 36.50 to 65.00 US$/lb U3O8 (according to TradeTech as of Dec. 8). The price is now 9 times its record low of 7 US$/lb U3O8 of 2000. In June, it nominally topped the 1978 all-time high of 43.40 US$/lb U3O8. (exchange rate as of Dec. 12: US$1=Euro 0.75)
The world uranium production reached 41,595 t U in 2005, a 3% increase over 2004. Production from mines thus supplied 62% of the 66,840 t U reactor-related demand in 2005.
(650.5771) Peter Diehl - The price rally was driven by an anticipated expiration of secondary supplies (in particular downblended nuclear weapons uranium), which are currently filling the supply gap, and by the plans for a major expansion of nuclear power generation in several countries, such as China, India, and Russia. An additional kick for the uranium price came from an incident at the Cigar Lake large-scale high-grade deposit in Saskatchewan, Canada, which is currently being developed for exploitation: the complete underground mine was flooded after a sudden water inflow in October, delaying the start-up of production for at least a year.
By an odd coincidence, uranium production suffered drawbacks at several existing mines, for various unrelated technical issues.
In response to the anticipated supply gap, the search for new uranium deposits was intensified world-wide and also reached various parts of Europe, now. The arrival of the uranium exploration companies was in some cases welcomed for the anticipated economic boost, but in many cases, opposition grew nearly instantly as soon as the news reached the concerned areas. The development of new mines was forced at several known deposits. In the U.S., companies even announced plans to construct two new uranium mills, although several mothballed mills still exist. In Australia, the federal government is currently undertaking strong efforts to remove all impediments to the country's uranium industry, while uranium mining bans are in force in several states, still.
In addition, countries hosting insufficient uranium deposits to meet their demand, including existing large consumers, such as Russia and Japan, or potential large consumers, such as China and India, intensified efforts to assure uranium procurement from abroad. These efforts included the resolution of political hurdles impeding uranium deliveries, conclusion of supply contracts, and investment into uranium deposits and mining and exploration companies.
The number of uranium mining and exploration companies listed on the WISE Uranium Project website increased by 60% from 361 to 570 during the course of the year, but there could also be observed first signs of some consolidation taking place, since several mergers of companies were announced.
While the frenzy around new uranium mines was on the increase, business continued as usual at the sites undergoing decommissioning: cleanup of abandoned legacy mine sites continued at an unbearably low speed (and this way will take centuries to complete); and, at most U.S. sites being reclaimed by their prior operators, authorities had to approve relaxed site standards, since the reclamation goals had not been met.
Most disturbing was the case of Western Nuclear Inc.'s Split Rock uranium mill tailings site in Wyoming, where the U.S. Nuclear Regulatory Commission (NRC) permitted the halt of groundwater treatment, with the foreseeable result of existing drinking water wells becoming unusable in the future. If this sets a precedent, uranium mining companies will have to worry about absolutely nothing any more.
New uranium mining projects
In Nunavut, Canada, the Inuit organisation Nunavut Tunngavik Inc. reversed its ban on uranium mining on Inuit-owned land, paving the way for Areva (formerly Cogéma) to start uranium mining at Baker Lake.
The Lutselk'e Dene First Nation in the Northwest Territories, however, remains opposed to uranium mining.
In British Columbia, 300 people protested in July against the proposed uranium exploration at International Ranger Corporation's Foghorn property.
In Saskatchewan, the development of Cameco's Cigar Lake large-scale high-grade uranium deposit suffered two serious setbacks: In April, a water inflow 392 metres below the surface stopped the construction of a ventilation shaft; and, on October 23, the complete underground mine was flooded from water inflow following a rock fall. Mine construction is expected to be delayed by at least a year.
Areva committed to proceed with the development of the Midwest uranium mine project and started the preparation of an Environmental Assessment.
The Fond Du Lac Denesuline First Nation optioned reserve lands to CanAlaska Uranium Ltd for uranium exploration.
In Québec, 70 people gathered at Mont-Laurier in June to protest against uranium exploration in the area.
In Wyoming, USA, Cogéma/Areva plans to restart its Christensen Ranch in-situ leach uranium mine; a final decision is expected by end 2006. The mine was shut down in 2000. High Plains Uranium, Inc., is planning a uranium in-situ leach mine at its Allemand-Ross property, and Uranerz Energy Corporation is planning a uranium in-situ leach mine at its Nichols Ranch project.
Cameco's subsidiary Power Resources, Inc., applied to include the planned Reynolds Ranch uranium in-situ leach project as a satellite facility to the existing Smith Ranch/Highland in-situ leach mine; in a draft Environmental Assessment, the U.S. Nuclear Regulatory Commission (NRC) concluded that the Reynolds Ranch project would not significantly affect the quality of the human environment. Power Resources, Inc., also filed an application for commercial operation of its North Butte uranium in-situ leach project.
In Utah, International Uranium Corp. reopened its Pandora uranium/vanadium mine.
In Colorado, Energy Fuels Resources Corp. reopened the Torbyn and Sapphire uranium mines and plans to build a new uranium mill in Paradox Valley.
In Arizona, Concentric Energy Corp. plans the development of the Anderson uranium mine.
In New Mexico, Strathmore Minerals Corp. initiated the mining permit application process for its Roca Honda deposit and purchased land for a potential uranium mill site in Ambrosia Lake.
In Texas, Uranium Energy Corp initiated the permitting of an in-situ leach uranium mine at its Goliad Project, where Goliad County officials had passed a resolution against uranium mining.
The restart of Uranium Resources Inc.'s Kingsville Dome and Rosita in-situ leach mines has been delayed due to "weather problems and a shortage of available drill rigs and logging trucks". Energy Metals Corporation initiated permitting for a new uranium in-situ leach mine at La Palangana.
In Mendoza, Argentina, protests and demonstrations were held at several occasions against the reopening of the Sierra Pintada uranium mine prior to cleanup of the environmental liabilities left from former operation.
Moreover, property owners took legal action against uranium exploration in the touristic zone of Cañón del Diamante.
Uranium exploration by Canadian Mawson Resources Ltd. in Jämtland, Sweden, drew strong opposition from residents, and several communities appealed the exploration permit.
In Finland, some 200 people gathered in Helsinki in May to protest the uranium exploration planned by Areva in southern Finland; Areva already received permits for uranium exploration in Northern Karelia in eastern Finland.
In Bergamo, Italy, opposition formed against the development of the Novazza uranium deposit proposed by Australian Metex Resources Ltd.
In Slovakia, Canadian Tournigan Gold Corporation received a positive economic study for the development of its Jahodná uranium deposit, while the City council of nearby Košice adopted a resolution against uranium mining and 16,000 signatures were collected for a petition against uranium mining.
In Hungary, Australian Whildhorse Energy Ltd. plans uranium exploration at Pécs and several other locations.
Bulgaria considers re-opening of its uranium mines; Russia, as well as Canadian Cameco, showed interest in mining uranium there.
Ukraine announced plans to double uranium production by 2010; a five-fold increase is envisaged by 2020.
In Malawi, the Draft Environmental Impact Assessment for Australian Paladin Resources Ltd's Kayelekera Uranium Project was submitted for public comment. Several local NGOs oppose the uranium mining project.
In Namibia, production at Paladin Resources Ltd's Langer Heinrich uranium mine is to commence in December.
Uramin Inc. started a Bankable Feasibility Study on its Trekkopje uranium mine project. Canadian Forsys Metals Corp. initiated a Pre-Feasibility Study for its Valencia uranium mine project.
The Namibian government announced plans to introduce legislation that would demand mining companies to pay into - so far not required - decommissioning funds.
In Zambia, Australian Omegacorp Ltd. has applied for a mining license for its Kariba uranium mine project. The Zambian government, however, has announced the development of a policy prior to issuing licenses for the mining of uranium.
Australian Equinox Minerals Ltd. is re-evaluating the potential for a significant uranium by-product from its Lumwana copper mine project.
In South Africa, SXR Uranium One Inc. was granted a mining right for its Dominion uranium project. A preliminary feasibility study confirmed the viability of the Ezulwini gold/uranium mine project, owned by a subsidiary of Simmer and Jack Mines Ltd.
First Uranium, another subsidiary of Simmer and Jack Mines Ltd, considers processing of the Buffelsfontein tailings for residual uranium.
AngloGold Ashanti plans to increase uranium output from its new Moab Khotsong mine and from processing of tailings.
In Russia, the Khiagda uranium in-situ leach project in Buryatia obtained approval for capacity build-up to 200 t/a.
The Russian existing uranium mines and uranium stockholdings are nearing depletion. Within 10 years, Russia might be facing a serious uranium supply crisis. Russia is therefore planning to increase uranium production sixfold by 2020, based on a doubled production (apparently from low-grade material) at existing uranium mines and start of exploration at a number of fields in Siberia and Buryatia. For lack of alternatives, Russia now considers mining of uneconomic but large deposits in the Aldan district of South Yakutia - so far not even classified as resources. Japanese Mitsui & Co., Ltd. is to participate in the development of this mine.
In Armenia, the Greens Union of Armenia expressed concern over the environmental impacts of US-based Global Gold Corporation's proposed uranium mining at Nor Getik.
In Kazakhstan, commercial production started at the Zarechnoye, Muyunkum, and East Mynkuduk in-situ leach uranium mines.
The Akdala in-situ leach uranium mine was expected to reach full production in 2006.
In Saudi Arabia, Tertiary Minerals PLC considers by-product recovery of uranium from its Ghurayyah tantalum-niobium deposit.
In Meghalaya, India, the debate on the proposed Domiasiat uranium mine continued; protesters formed blockades to prevent the road construction work required for the mine.
In Jharkhand, the East Singhbhum district administration served a showcause notice on the Uranium Corporation of India Limited (UCIL) for unauthorised mining in Fuljhari, Turamdih and two other new mines in Keuradungrui. UCIL is accused of illegally having started mining, while the applications for mining were still pending with the State Government.
In Andhra Pradesh, protests were held at the public hearing on the Pulivendula uranium mine project in Kadapa. A protest walk was held against the Lambapur-Peddagattu uranium mine project in Nalgonda; it was accorded environmental clearance in April.
In Australia's Northern Territory, Areva NC said it had no plans to mine the Koongarra deposit in the near future because it is concentrating on new projects in Canada and Kazakhstan; the project is opposed by the Traditional Owners. Pressure on Traditional Owners increased, however, to permit ERA's Jabiluka mine.
In Queensland, Laramide Resources Ltd commissioned a scoping study of its Westmoreland uranium deposit, although the state bans all uranium mining.
In South Australia, SXR Uranium One Inc. received a license for its Honeymoon in-situ leach uranium project.
After protests from residents, South Australian Premier Mike Rann ruled out uranium mining near the Myponga Reservoir on the Fleurieu Peninsula, where exploration company Marathon Resources wanted to conduct soil tests. The tests will rather be performed by state authorities, now.
Issues at operating uranium mines
In Utah, USA, the Division of Radiation Control authorized alternate feed processing of material from FMRI's Muskogee Facility at IUC's White Mesa uranium mill.
In Texas, the regulator approved the extension of the Kingsville Dome ISL uranium mine.
In Brazil, a parliamentary commission found serious deficiencies with control of Industrias Nucleares do Brasil's Lagoa Real/Caetité uranium mine in Bahia: the mine had no regular operating license, and it had failed to report several incidents, among others.
Russia plans the extension of the Krasnokamensk mine and the Khiagda in-situ leach project. In November, Russia consolidated its uranium production assets in a new company.
In Kazakhstan, Areva invests in a production increase at the Muyunkum in-situ leach mine.
Kyrgyzstan failed to find a bidder for a majority stake in the Kara Balta uranium mill.
In Australia's Northern Territory, ERA plans to mill more stockpiled low-grade ore, extending the operational life of the Ranger mill by six years.
A study found an almost doubled cancer rate among Aborigines near the Ranger mine, it is unclear, however, whether this is caused by the uranium mine.
In South Australia, Heathgate seeks a mining lease extension for its Beverley uranium in-situ leach mine. At BHP Billiton's Olympic Dam copper/uranium mine, audit reviews called for improvements of the tailings management at the site, in view of the proposed four-fold capacity expansion.
Setbacks at operating uranium mines
In Saskatchewan, Canada, Denison Mines Ltd. reported a serious production setback at the McClean Lake mine, in which it holds a minority interest (operator is Cogéma/Areva): "The McClean Lake Joint Venture produced 455,000 pounds of uranium [175 t U] during the three months ended September 30, 2006 compared with 1,532,000 pounds [589 t U] during the same period in 2005. [...] Production for the first nine months of the year has been well below our expectations due to lower grade ore feed, the absence of higher grade ore from the blind boring/jet boring operations, reduced throughput caused by variances in the arsenic concentration of the ore feed that resulted in elevated temperatures in the leach circuit and a shortage of reagents due to road closures caused by forest fires. [...] Average mill feed grade for the third quarter 2006 was 0.58% U3O8 compared to 1.73% U3O8 for the comparable 2005 period."
In Colorado, USA, Cotter Corp.'s Cañon City uranium mill remained closed. The owners are investigating possibilities for process improvements, and they are waiting for a further increase of the price of uranium, for the mill to become viable again.
In Texas, production from Uranium Resources Inc's Vasquez in-situ leach uranium mine was below expectations: "Production costs for the third quarter of 2006 were $56.92 per pound compared with $23.57 per pound in the prior year's third quarter. The higher production costs were primarily due to higher capital and operating costs compared with the prior year and also due to the change in the estimated recovery factor for the Vasquez project from 70% to 50%."
In Uzbekistan, a slight production shortfall is expected at the Navoi processing plant: "According to forecasts, uranium mining this year could fall by approximately 40 tonnes due to technical problems of an industrial nature and insufficient funding".
In Australia, ERA's Ranger mine experienced a serious production setback:
In the second quarter, "Drummed production for the quarter was 596 tonnes uranium oxide [505 t U] (2005: 1,250 tonnes uranium oxide [1060 t U]). This was lower than the corresponding period last year due to wet weather associated with cyclone Monica and unusually high rainfall throughout the wet season that prevented access to high grade ore. Production was further impacted by a reduction in the volume of ore treated due to difficulties experienced in bringing the acid plant back to full production after a planned maintenance shutdown."
The problems continued in the third quarter: "Mill head grade was 30 per cent lower than the corresponding quarter in 2005 although it was 5 per cent higher than that processed in Q2. [...] The lower mill head grade resulted in drummed production that was 31 per cent lower than the corresponding quarter in 2005 but 85 per cent higher than second quarter production. As a result of the operational difficulties experienced in the first half of the year and the impacts of the high water level, production for 2006 is forecast to be significantly lower than in 2005."
Abandoned mines
In South Dakota, USA, a new study showed abandoned uranium mines in the Cave Hills area are contaminating nearby waters, but the study did not determine if that has caused health problems downstream.
In Utah, the state began reclamation of some unsecured uranium mines in the Labyrinth Canyon area.
In Kazakhstan, the reclamation of the large Koshkar-Ata uranium mill tailings at Aktau has once again been delayed; it now is scheduled to begin in 2007. Just US$ 1 million have been set aside for this purpose from the 2007 state budget; the total reclamation cost is now quoted as US$ 8.4 million, while earlier estimates had assumed costs of US$ 76 million.
In Tajikistan, planning for management of abandoned uranium mill tailings began.
In Kyrgyzstan, the reclamation of the Kadzhi-Say uranium mill tailings was completed with foreign aid. OSCE (Organization for Security and Cooperation in Europe) and the Kyrgyz Government moreover committed to assess and reduce the threat posed by abandoned uranium dumps in the Minkush area.
For the former uranium mining and milling area of Mailuu Suu, a radiation exposure assessment was performed, finding radiation exposures for residents of more than 4 mSv/a; much higher radiation doses would result from a supposed dam failure.
Around the decommissioned Orlovka uranium mill tailings dump in the Chui region, residents were reported to be digging for mono-silicon.
In Pakistan, concern was raised over the hazards from the radioactive waste left at the former Baghalchur uranium mine near Dera Ghazi Khan; however, no such evidence was found there.
In Australia, the clean-up of abandoned uranium mine sites in the South Alligator River area in Kakadu National Park was included in the federal budget.
Decommissioning issues
In Washington State, USA, the U.S. Environmental Protection Agency (EPA) issued a decision on the final cleanup plan for the Midnite uranium mine.
In Wyoming, after seven years of discussion, the U.S. NRC approved relaxed groundwater standards at Western Nuclear Inc.'s Split Rock uranium mill tailings site, allowing for continued contamination of clean groundwater by the progressing contaminant plume, and for drinking water wells becoming unsuitable for domestic use in the future.
The U.S. Nuclear Regulatory Commission (NRC) moreover approved:
- the reclamation performed on the Lucky Mc uranium mill tailings,
- a third five-year postponement of initiation of decommissioning of the mothballed Sweetwater uranium mill,
- a relaxed Radium-226 standard for topsoil covers and relaxed groundwater standards for lead-210 at Umetco's Gas Hills uranium mill site,
- alternate groundwater protection standards at the ExxonMobil Highland uranium mill tailings reclamation project, and
- the groundwater restoration performed at the Irigaray in-situ leach site, although primary standards are not met.
In Utah, the U.S. Department of Energy (DOE) released a Draft Remedial Action Plan for the relocation of the Atlas Moab uranium mill tailings to the Crescent Junction disposal site. Flooding spurred new concern over the existing situation of these tailings.
At the former Monticello uranium mill site, a study found no increased cancer incidence among residents; data gaps are to be filled now to allow for the analysis of cancer incidence.
In New Mexico, the U.S. EPA settled with United Nuclear to investigate contamination at the former Church Rock uranium mine and mill site. The U.S. NRC granted United Nuclear a relaxed radium groundwater standard at the same site.
The U.S. NRC approved Rio Algom's Soil Decommissioning Plan and groundwater alternate concentration limits for the Ambrosia Lake uranium mill tailings site.
The New Mexico Environment Department requested from Sohio Western Mining Company an investigation into groundwater contamination observed at the former JJ Number 1/L-Bar Mine. The U.S. NRC approved relaxed groundwater site standards at Homestake's Grants uranium mill tailings site, although elevated contaminant concentrations were found in residential wells near the site.
In Texas, an analysis showed that permission of relaxed groundwater restoration standards is quite normal with the shutdown of uranium in situ leach facilities: An examination of 32 permits from closed South Texas in-situ leach mines showed that in each case, companies were permitted to leave behind minerals such as uranium, molybdenum and selenium at higher levels in groundwater than were listed in the original permit. In some cases, companies were able to meet the restoration target for one mineral but reported 10- and 20-fold increases in others. Older mines tended to require more drastic permit amendments than mines started later.
In Ohio, the shipment of the Congo high grade uranium tailings (aka Fernald Silo wastes) to an interim disposal site in Texas was completed. The Institute for Energy and Environmental Research (IEER) issued a critical assessment of the management of these wastes.
In Germany, reclamation of the Wismut legacy continued: the relocation of the landmark Paitzdorf waste rock piles into a former open pit was completed, as well as the flooding of the southern part of the former Ronneburg uranium underground mine and the intermediate cover on Basin B of the Culmitzsch uranium mill tailings deposit. A study by Öko-Institut confirmed that there no longer exists a radiation hazard on that part of the former Ronneburg uranium mining area where the 2007 federal garden festival will take place.
In the Democratic Republic of the Congo, a team of experts monitoring a U.N. arms embargo once again found ample signs of "artisan mining" by small groups of private individuals at the former Shinkolobwe uranium mine, although the Ministry of Mines and the National Intelligence Agency assured that the mine is secured and that no artisan mining is taking place. While the miners are interested in cobalt, uranium could also be extracted from the ore.
Miners' and Residents' Health - Science issues
In a research project to study the non-radiological toxic effects of certain radionuclides, France's Institute of Radiological Protection and Nuclear Safety has investigated the effects of chronic ingestion uptakes of low doses of uranium to various biota and rats. The study showed some unexpected biological effects. It remains unclear, however, whether these effects can cause any health effects, and whether they can be extrapolated to humans.
Another research group studied the toxicity of continuous ingestion of uranium with drinking water in humans. No indicators of kidney toxicity were found, while uranium is toxic to kidneys in experimental settings.
A retrospective study among 59,001 former Wismut miners confirmed the excess relative risk estimate from radon progeny exposure known from previous studies among various other miner cohorts. However, the excess relative risk per WLM showed a maximum only 15-24 years after exposure and showed only a modest decline with time since exposure. "The results would indicate the need to re-estimate the effects of risk modifying factors in current risk models."
The leukaemia risk of former uranium miners in East Germany was investigated in a case-control study. The results suggest that an elevated risk for leukaemia is restricted to employees with a very long occupational career in underground uranium mining or uranium processing. No association was found between exposure to short-lived radon progeny and leukaemia risk.
Uranium trade and foreign investment issues
China and India both own very small and low grade uranium deposits only, but both are planning to expand nuclear power production at a large scale.
Uranium exports to China
In April, the Australian government approved deliveries of Australian uranium to China. There exist no delivery contracts yet, however, since the Australian uranium suppliers don't have free capacities in the short term. So far, Australia had refused to permit uranium deliveries to China, since civilian and military use of nuclear facilities are not separated in China, and China rejects monitoring of its facilities by the International Atomic Energy Agency (IAEA). In December, an Australian parliamentary committee approved the export of uranium to China. In September, Sinosteel Corp. became the first Chinese company to announce an investment into an uranium exploration project in Australia. China is also seeking approval for uranium deliveries from Canada. At present, China is receiving uranium from Kazakhstan and Namibia already. In April, it also became known that Australia recently gave approval to uranium deliveries to Taiwan - a non-signatory to the Nuclear Non-Proliferation Treaty. Delivery contracts have already been signed; the deliveries are to be managed via the USA, since direct exports are illegal.
Uranium exports to India
India, being not a signatory to the Nuclear Non-Proliferation Treaty, cannot buy uranium in the world market, after conducting a nuclear weapon test. The domestic uranium production, however, is not even sufficient to supply the presently operating nuclear power plants in the country, rather than any new plants proposed for construction. In fact, the existing Indian nuclear reactors are running at reduced output levels for several years already - for uranium supply shortage.
Therefore, development of a thorium-powered nuclear power plant line is being considered; but this can solve the problem only in the long term (if at all), since uranium is first required to irradiate natural thorium to obtain the fissile isotope of uranium-233.
Mining of very low-grade uranium deposits is being planned in several parts of the country - facing stiff opposition from residents and indigenous groups living in those areas (see above). Based on the nuclear co-operation treaty to be concluded with the U.S., India now hopes to be able to buy uranium in the world market soon. In fact, U.S. based WM Mining International Ltd already has agreed on a contract with India's Nuclear Fuel Complex to sell 500 metric tonnes of uranium a year and is waiting for the Indo-US civil nuclear deal to go through to execute it. India pressed Australia to export uranium, and Australia no longer appears to be opposed to uranium deliveries to India now, although India still refuses to sign the Nuclear Non-Proliferation Treaty. Further, Nuclear Power Corp. of India announced to spend US$ 1.2 billion on stakes in Canadian and Australian uranium mines.
India also announced to continue uranium mining, even if imports for civilian purposes would become possible; the imports obviously would set the domestic uranium production free for military purposes.
Uranium exports to Russia
Given the looming uranium supply crisis from domestic sources, Russia attempts to re-establish uranium trade with Kazakhstan and Uzbekistan; Russia signed a US$ 1 billion uranium supply contract with Kazakhstan, and Russia plans to invest US$ 746 million in CIS uranium mining by 2020. In addition, Russia is seeking uranium imports from Australia.
Uranium imports from Kazakhstan and Uzbekistan
Given the tightening supply situation on the world uranium market, several consumers are now looking for uranium deliveries from Kazakhstan and Uzbekistan, where uranium in-situ leach capacities are being expanded at a very large scale. Given the extremely poor standing of Kazakhstan and Uzbekistan in dealing with the legacy of former uranium mining, and given the unresolved problems with decommissioning of in-situ leach mines elsewhere (for example in the U.S., see above), these deals might result in an environmental disaster waiting to happen. The European Union and Japan plan to procure more uranium from Kazakhstan, and Kazatomprom forms a joint venture with Japanese companies for the development of the West Mynkuduk deposit by uranium in-situ leaching. Japan signed an agreement for the development of the uranium industry in Uzbekistan, deliveries to Japan are to start in 2007. South Korea signed a deal with Uzbekistan for uranium deliveries, and Korea Resources forms a uranium joint venture in Uzbekistan.
Source and Contact: Peter Diehl, 12 December 2006. WISE Uranium Project