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March 1, 2018
From Environment & Energy Report Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...
By Amena H. Saiyid The price of uranium, rather than fears of groundwater contamination, could stall a mining project in the foothills near the Grand Canyon in Arizona. Energy Fuels Inc. is forging ahead with plans to restart the mine despite low prices for uranium and local concerns about environmental impacts in the canyon’s watershed. But that plan is based on an assumption that uranium prices will rise. The company’s Canyon Mine is located in the Kaibab National Forest, about six miles from Grand Canyon National Park’s southern entrance. It was shuttered in 1991 after spot prices for uranium tanked. The company now wants to reopen it to mine for uranium and copper. But the spot price of uranium hasn’t favored new production, as it has been hovering between $20 and $25 per pound since 2017, the U.S. Energy Information Administration reports. The price is unlikely to go up in the near term because the market for uranium is oversupplied, Chris Gadomski, head of nuclear research with Bloomberg New Energy Finance, told Bloomberg Environment. Demand is driven by fuel needs at nuclear power plants. Mining companies are encouraged by the Trump administration’s commitment to foster domestic energy production, especially as the U.S. Forest Service has indicated it may review, and possibly rescind, an Obama-era policy to withdraw new uranium mining claims from lands that fall under the agency’s purview. But the U.S. Court of Appeals for the Ninth Circuit in December upheld the Obama policy to restrict mining in the Grand Canyon The restart of the Canyon Mine is opposed by members of the Havasupai Tribe, who live in the Grand Canyon area, and local environmental and county officials. They fear uranium and other toxic metals would contaminate underground streams and springs that flow through the Grand Canyon into the Colorado River. But the Havasupai have been unsuccessful in challenging the permit the Forest Service issued for the Canyon Mine.
Northern Arizona contains some of the country’s richest uranium ores, but mining there is limited. The Interior Department in 2012 withdrew about 1 million acres in the region from mining claims to protect water and air quality, cultural resources, wilderness areas, and other resources. Only 11 claims were allowed to proceed to construction because they were already permitted. Canyon Mine was one. The mine is under construction to allow for mining of copper as well as uranium. But the Canyon Mine’s future remains a question for the publicly traded Energy Fuels. The mine would be viable if uranium’s spot price went up in the next six months to a year to $40 to $50 per pound, Mark Chalmers, president and CEO of the company, said in a briefing for reporters on an Institute for Journalism and Natural Resources reporting fellowship. In addition, “the project just might break even” if the company also mines copper from the 17-acre site, Chalmers said. The company estimates the site contains 12 million pounds of copper and about 2.4 million pounds of uranium.
Gadomski, however, said flat demand for uranium is expected to continue “owing to a slowdown in construction of nuclear reactors in China, uncertainty regarding the restarts of the Japanese nuclear reactors owing to the 2010 meltdown of the Fukushima power plant, closing of reactors in the U.S., and announced closures of reactors in France.” Energy Fuels Resources and UR-Energy Inc., which represent 80 percent of U.S. uranium production, petitioned the Department of Commerce to bolster the domestic market by requiring that at least 25 percent of uranium be bought from U.S. producers and limiting uranium imports from countries that subsidize uranium production, notably China, Russia, and Kazakhstan. The Colorado-based company is hoping to enter into long-term contracts with U.S. utilities to sell the uranium it extracts from the Canyon mine, according to Chalmers. Uranium sold under long-term contracts to utilities extend for at least 15 years and are often priced higher than the spot market. Right now, U.S. producers supply less than 5 percent of uranium to U.S. nuclear plants. The companies said they would expect an increase in prices if the mandate went into effect. The Grand Canyon Trust, an environmental group that opposes the project, is convinced the mine wouldn’t be viable based on what the company has told the Commerce Department about the current state of the uranium industry. “They have filed hundreds of pages with the Commerce Department showing that the uranium industry is in dire straits,” Roger Clark, the group’s Grand Canyon program director, told reporters.
Chalmers also discussed air and water pollution concerns, saying he understood but didn’t share them. The company has taken steps to limit groundwater contamination by sealing the 1,400 feet production shaft to prevent seepage, he said. Uranium occurs naturally in the sandstone walls of the Grand Canyon, which have been eroded by the Colorado River for millions of years, Chalmers said. “If this project was going to harm the Havasupai, if this project was going to harm the Grand Canyon, I wouldn’t be here.” National Park Service and the U.S. Geological Survey scientists, however, say more studies are needed before they can say that there will be no long-term environmental impacts from mining uranium in the Grand Canyon area. “Let’s be cautious before saying it’s not a problem,” said Janet Balsom, a senior adviser in the Office of the Superintendent at Grand Canyon National Park. Balsom contributed to the Interior Department’s environmental impact study in 2012 that led to the withdrawal of the million acres from mining. The environmental study pointed out unknowns, such as the long-term effects of abandoned uranium mines, including the Orphan Mine, which is now a Superfund site, at the rim of the Grand Canyon. “We are concerned about what happens even if it is off the park, Balsom said. “The resources are connected, our groundwater systems are connected, the air is connected, the plants are connected, the vegetation is connected, the uses are connected so the goal for all of us in the park has been to get a better understanding of what that legacy really is.” Uranium enters the Colorado River from erosion, but that process occurs over many years, while mining suddenly exposes high concentrations of normally inert uranium, Balsom said. “As many of us who have lived in this area have understood that the problems are long-lasting and don’t show up right away, so we have to be really conservative and understand what the science tells us,” she said. The U.S. Geological Survey is engaged in a 15-year study, estimated to cost $50 million, to understand the presence and movement of uranium and other trace elements in the Grand Canyon, said Don Bills, a hydrologist with the USGS Arizona Water Science Center, who also worked on the 2012 environmental study.
Bills said the Trump administration has expressed an interest in continuing the study but hasn’t fully funded it. Try Environment & Energy Report