ML20199D565
| ML20199D565 | |
| Person / Time | |
|---|---|
| Issue date: | 12/31/1985 |
| From: | NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | |
| Shared Package | |
| ML20198R528 | List: |
| References | |
| FRN-49FR46425, RULE-PR-40 AB56-1-1, AB56-1-51, AB56-1001, NUDOCS 8603240233 | |
| Download: ML20199D565 (21) | |
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Low-Level Waste and-Uranium
__J- __. Recovery Projects Branch, US NRC
.(Ryum to WM,623 SS) Revision 1 December 1985 OVERVIEW 0F THE STATE OF THE URANIUM INDUSTRY FOR RULEMAKING PURPOSES
Purpose:
This overview is intended to provide input on deciding the scope of rulemaking that should be undertaken as followup to the advance notice of proposed rulemaking, " Uranium Mill Tailings Regulations: Ground-water Protection and Other Issues" published November 26, 1984 (49 FR 46425).
Summary: The current depressed state of the industry and projections on the
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future state of the industry suggest that NRC should limit expenditure of resources for rulemaking applicable to licensing new conventional mills. Thus state of the industry input favors rulemaking by incorporation by reference or inserting into 10 CFR 40 the clearly nondiscretionary provisions (Alternatives 1 or 2). The major points leading to this conclusion are:
- 1. Industry is certainly depressed now.
- 2. Slow recovery is expected but the timing and degree are uncertain.
- 3. Forecasts indicate little activity for at least five years.
- 4. Solution (i_n situ) mining may be the most active technology in the near-term.
- 5. Mechanisms exist for NRC to reassess the need for more comprehensive rulemaking.
Discussion:
- 1. Current state of the industry - The uranium production levels and facility shutdowns both reflect the current depressed state of the industry.
Figure 10 (Enclosure 1) from DOE /S-0028 (Reference 1) shows the decline in production through 1983 and the Department of Energy's (DOE) projections on future domestic production. Current estimates of 1985 conventional 8603240233 g51031 PDR P8R49hh46425 4
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- mill production by NRC's Region IV Uranium Recovery Field Office (URF0) are indicated on Figure 10. Even if 1983 non-mill production levels are added, the DOE projections were optimistic and production has continued to decline. In Table 12 of 00E/S-0028,-00E indicates that 22 mills were operating in 1980, 20 in 1981, 14 in 1982, and 12 in 1983. Table 7 of 00E/EIA-0477 (Reference 3) indicates 6 mills operating at the end of the first quarter of 1985. According to DOE, the 1983 production was only 33%
of the rated U.S. capacity and the 1984 production was 25% and first quarter 1985, 16%. The following table shows that this downward trend has continued. The table is based on data provided by URF0 and_shows that continued operation of only 4 mills is certain at the present time.
NATIONAL
- URANIUM RECOVERY FACILITY STATUS October 1985 Conventional Spring 1985 Status Mills In-Situ Operating 4**~ 15 Shutdown, definite restart 3 0 Shutdown, restart uncertain 15 14 Decommissioning 5 14 New facilities under review 0 2 TOTALS 27 45 Based on URF0 curvey of industry, including Agreement State facilities
- Three have shutdown planned 00F/S-0028 is a report to Congress required by Public Law 97-415. It is a comprehensive review of the industry. DOE has summarized the report as follows: ,
Briefly, the major findings of the report with respect to the current status of the. industry are threefold.
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First, 1983 production of 10,600 short tons (21 million lbs.) of uranium oxide, or U 0 , is the lowest value since 1965, and less than half of the 38 1980 peak production value of 21,900 short tons (44 million Ibs.). In addition, inventories of uranium held by U.S. utilities were at an all
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time high in 1983.
Second, only 12 of this country's 23 conventional mills operated during 1983, and these 12 operated at only 58 percent of capacity. Estimated 1983 exploration expenditures, employment and capital investment were the lowest values recorded over the period in which the Government has collected such statistics.
Third, uranium prices for new contracts signed in 1983 were at the lowest value.since 1973 -- in constant 1983 dollars -- continuing the declining .
trend since 1976. Current new-contract prices are less than one-third of the 1976 peak value.
In Public Law 97-415, Congress also directed DOE to monitor the viability of the. domestic uranium industry and make annual determinations of its viability for the years 1983 through 1992. The 1983 determination of viability was sent to Congress in December 1984 (Reference 2, 00E/S-0033).
The 1984 analysis was' issued in September, 1985 (Reference 3, 00E/EIA-0477). On September 16, 1985 the Secretary of Energy informed the President that the uranium industry was not viable. DOE also issued a press release on the finding (see Enclosure 2). The finding was based in part on Reference 3.
- 2. Uncertainty in predicting recovery - Although NRC 1.acks authority and expertise in assessing the economic viability of the industry, staff can review DOE's work surveying the industry in documents such as 00E/S-0028 and in determining viability and other analyses such as those done by Nuclear Assurance Corporation (References 4 and 5). The complexity and number of market factors involved cover domestic and worldwide
considerations and suggest that predictions have a high degree of uncertainty. For example, Figure 9 (Enclosure 3) from Reference 2 issued by DOE only seven months after Figure 10, shows a dramatic decline in projected recovery. Cyclic responses and slow recovery are predicted by some. The timing of trends seems particularly uncertain. For example, the production decline and costs have not bottomed out as predicted.
The following list of market factors helps illustrate the complexity:
Long-term utility contract commitments with domestic producers in the 1970s with favorable cost guarantees. These contracts are now expiring and being replaced with foreign producer contracts, reliance on spot market purchases, or secondary market trading.
Growth of a secondary market due to utility sale and loan of inventories.
Size of inventories and production capacity.
Power plant cancellations and delays.
Spot market price declines.
Foreign discovery and development of rich new uranium deposits (e.g. , Australi~ a, Canada, Namibia, and South Africa).
Higher average U.S. production costs.
Uncertainty in corporate restart plans for existing mines and mills and deterioration of mines and mills during shutdown.
Import / export balance and potential for import restrie.tions by Congress.
Some of these factors are interrelated but e'ach contributes uncertainty to the overal1 picture. The relative importance of the factors varies according to who is evaluating the market and why. Industry is painting a bleak picture. The enclosed articles from the American Mining Congress Journal and Business Week illustrate (Enclosures 4 and 5).
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- 3. Forecasts - Both theoretical and survey forecasts indicate little new capacity activity. In DOE /S-0028, the general recovery and theoretical trend predicted is characterized by the enclosed Figure 10 which shows production recovery after 1990. Based on current status and DOE revised estimates of utility needs, these projections are optimistic. For example, the production forecasts in the 1984 viability study (Reference 3) show a flat rate through 1995 and only a little recovery by the year 2000 under both the middle and low demand cases. These more recent DOE projections look very similar to Figure 9 (Enclosure 3) except that the levels are a factor of two lower. The actual production level in 1984 was below the projection in Figure 9 as indicated on Enclosure 3.
Industry projections are even more pessimistic as DOE's comparision in Table 19 (Enclosure 6) from DOE /EIA-0477 illustrates.
In theoretical projections prepared for NRC in Reference 5, two cases were evaluated: free market and import restriction. Only worldwide economics were used to forecast the development of domestic facilities to provide new capacity. The following table summarizes the results:
NEW FACILITIES Free Market Import Restrictions Mills In Situ Mills In Situ 1985 - 1990 0 2 0 6 1991 - 1995 3 2 6 2.
1996 - 2000 3 4 2 1 TOTALS 6 8 8 9 The nominal capacity of the eight potential mills ranged from 190-4,000 short tons U 03 8 per year and totaled 10,600 short tons. The nominal capacity of the in situ mining facilities ranged from 200-700 short tons per year and totaled 3,200.
NRC's caseload forecast prepared for budget purposes is based on industry survey. The enclosed Tables 9 and 11 (Enclosures 7.and 8) reflect industry response and entries for expected new facilities are identified companies only. Two conventional mill applications to NRC are expected in 1985-1990 and one in 1991 (Table 9). (Such tentative industry plans are not necessarily inconsistent with projections based on economics only.
The Nuclear Assurance projections specifically did not include licensing lead times or corporate risk taking and capital management.) Six commercial in situ applications to NRC are expected (Table 11) in 1985-1990. These tables show that most expe-ted licensing activity involves existing facilities.
- 4. In Situ - Production of U 3g0 from sources other than conventional mills may dominate near term new capacity. The following table using values .
from Table 11 of DOE /S-0028 and Table 5 of 00E/EIA-0477 shows the split in 1982 - 1984:
DOMESTIC U 0 PRODUCTION 38 1982 1983 1984 (Short Tons) (Short Tons) (Millions of Pounds)
Conventional Mills 10,119 7,474 9.6 Other* 3,315 3,105 5.3 Totals 13,434 10,579 1C9
- 0ther means " saleable 2Ug0 in concentrate obtained from solution mining (h situ), mine water, heap leaching, or as a byproduct of other a:: tivi ty. "
In 1983 and 1984 other methods accounted for 29 and 36% of the total production, respectively.
The facility forecasts by Nuclear Assurance just discussed show a dominance of in situ applications during 1985-1990. The NRC caseload forecast was 6-2 in favor of in situ. The Nuclear Assurance forecast was-2-0 or 6-0 depending on the case. The Nuclear Assurance maximum nominal in situ capacity through the year 2000 is only 23% of the total for all 17 i
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facilities,' but if the nominal production per year and the expected years of operation are considered, the expected production is about half and half.
- The importance of this trend to rulemaking centers around the fact that existing NRC rules contain few specific requirements for in situ licensing and the EPA standards in 40 CFR 192 do not apply except to the small associated evaporation ponds. Thus, in situ rulemaking would not be a part of the conforming process. In situ underground solution mining is
- regulated by EPA and authorized States but not under SWDA or RCRA authority. The Congressional mandate to be comparable-is therefore not applicable. Consequently, any rulemaking dealing with the underground aspects of in situ mining would be totally discretionary. Further, NRC explicitly limited its development of Appendix A of 10 CFR 40 to -
conventional mills so no analyses in the supporting documents are
. available to build on.
- 5. Reassessment Mechanisms - The most obvious means to monitor the state of the industry is the annual determination by DOE of the viability. As ;
mentioned earlier, these determinations are required through 1992. The DOE Energy-Information Administration also prepares documents on energy' outlook and uranium production. Other opportunities to reassess the need L
for and type of rulemaking include:
Caseload forecast surveys and budget activities.
Industry studies. -
- Informal contacts with industry and States.
Actual licensing experience (NRC and Agreement States).
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Enclosures:
- 1. Fig. 10 from DOE /S-0028
- 2. News release and memo dtd 9/26/85
- 3. Fig. 9 from DOE /5-0033
- 4. AMC Journal article dtd 5/23/85
- 5. Business Week article dtd 10/28/85
- 6. Table 19 from DOE /EIA-0477
- 7. Caseload Forecast Table 9
- 8. Caselod Forecast Table 11 O
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References:
- 1. U.S. Department of Energy, May 1984, " United States Uranium Mining and Milling Industry" DOE /S-0028.
- 2. - U.S. Department of Energy, December 1984, " Domestic Uranium Mining and Milling Industry,1983 Viability Assessment" DOE /S-0033.
- 3. U.S. Department of Energy, September 1985, " Domestic Uranium Mining and Milling Industry: 1984 Viability Assessment" DOE /EIA-0477.
- 4. Nuclear Assurance Corporation, July 1984, " Uranium Market and Price Outlook: 1984."
- 5. Nuclear Assurance Corporation, March-1985, " Analysis of Projected Operational Status of U.S. U 0 Facilities."
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Figure 10. Historical and Projected U.S. Uranium Production Under Current Policy ,
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Energy Informatson Admsanstretson, U.S. Department of Energy (.Isnuary itsel.
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u.s. oDARTMENT W L.m,- .
OFFICE OF THE PRESS SECRETARY WASHINGTON DC 20688 DOE NEWS EDIA CONTACT:
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David Devane, 202/252-8325
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FOR IMEDIATE RELEASE SEPTEMBER 26, 1985 l l
HERRINGTON DETERMINES U.S. URANIUM INDUSTRY NOT VIABLE; ORDERS STEPS TO ASSIST INDUSTRY
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Secretary of Energy John S. Herrington Thursde issued a determination that the U.S. uranium mining and milling industry was not viable' in calendar year 1984 and took three steps aimed at alleviating some of the problems faced by the industry. .
Herrington:
-- authorized DOE to offer its customers for enriched uranium an option that, if exercised, could have the effect of increasing domestic
. pranium sales;
-- postponed for one year a DOE plan to feed some of its own uranium stockpile into enrichment plants; and
-- asked the United States Trade Representative to examine the l
facts and implications of uranium foports and corresponding foreign trade and policy issues with a view to determining the appropriate courses of action under U.S. Trade laws. The Trade Representative will report, back in 3 months.
The Secretary of Energy is required by the Atomic Energy Act to make an annual determination of the viability of the U.S. uranium mining and milling industry.
(MORE)
R-85-120 Enc Osare z
,- n
e THE SECRETARY OF ENERGY
@. WASHINGTON, D C. 2365 September 26, 1985 MEMORANDUM FOR The President Pursuant to the requirements set forth in section 170B of the Atomic Energy Act of 1954, 42 U.S.C. 2210b, I am transmitting the annual determination of the
. viability of the domestic uranium mining and milling industry.
Section 170B directs me to make an annual deter-mination for the years 1983 to 1992. The attached determination covers calendar year 1984. The deter-mination has been made in accordance with the criteria established by regulation (10 C.F.R. SS 761.1 .8 (1984)). The annual assessment of the industry's condition, prepared by the Energy Information Administration, is also attached. This study,
" Domestic Uranium. Mining and Milling Industry: 1984 Viability Assessment," September 1985, provides the underlying information and analysis for this determination.
I have determined, in accordance with the provi-sions of the Act and the regulations, that for calendar year 1984 the domestic uranium mining and milling industry was not viable. In view of this deter-mination, I have authorized the Department of Energy to offer its customers for enriched uranium an option that, if exercised, could have the effect of increasing domestic uranium sale's. I have also directed the Department to postpone for one year a plan to feed some of its own uranium stockpile into enrichment plants.
In addition, I have requested the United States Trade Representative to examine this situation with a view to determining the appropriate available courses of action under U.S. trade laws. The Trade Repre-sentative has been requested to provide preliminary recommer.dations within three months. I l 2Pn6. ( 3%
IHN S. HERRINGTON Attachments w 0 Nf d Ccd f'
Determination of Viability of the Domestic Uranium Mining and Milling Industry Determination The' Secretary of Energy has determined, pursuant to section 170B of the Atomic Energy Act of.1954, 42 U.S.C. 2210b, that for calendar year 1984 the domestic uranium mining and milling industry.was not viable. His reasons for this determination are set forth below.
Background
Section 23(b) of Pub. L. No.97-415 amended the Atomic Energy Act of 1954 by adding a new section 170B, 42 U.S.C. 2210b, which requires the Secretary to monitor, and for the years 1983 through 1991 to make an annual determination of, the viability of the domestic uranium mining and milling industry. The Secretary directed that the Energy Information Administration (EIA) carry cut his responsibilities under section 170B to develop criteria and prepare reports t'o enable him to assess the viability of the industry. In October of 1983, the Secretary issued the final regulation establishine the criteria. 10 C.F.R. 55.761.1 .8 (1984). The EIA has provided information in the report entitled
" Domestic Uranium Mining and Milling Industry: 1984 Viability Assessment" which acccmpanies this determination. The infer-mation in this repcrt addresses each of the primary criteria set fcrth in the regulation and is based upon 1984 data and pro]ec-tiens frem that data.
Section 170B alsc provides that the Secretary may determine (1) that source material or special nuclear material is being imported in such increased quantities as to be a substantial cause of serious injury, or threat thereof, to the domestic uranium mining and milling industry, or (ii) that the level of contracts or options involving imported scurce material and special nuclear material may threaten to impair the naticnal security. The Secretary has concluded that it is not apprcpriate to make either determination at this time. Ecwever, the
! Secretary has asked the United States Trade Representative to i
carefully examine the facts and implications with a view to determining,the appropriate available courses of action under U.S. trade laws ~.
Rationale The Secretary has evaluated the capability'of the industry with respect to the four primary criteria established by the
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2 resource capability, supply regulation. These criteria are:
financial capability, and import commitment resource capability, dependency.
Resource capability is defined as the extent to which domestic economic uranium reserves can supply The EIA domestic analysis,nuclear basedpower on needs for a future 10-year period.
estimates supplied by U.S. producers 10 years, of the amount of that indicates uranium the available for sale over the nextto supply domestic nuclear power needs reserves under are sufficient plausible assumptions of a wide range of potential futures.
Supply response capability involves a measure of the level ofto meet projected dcmestic uranium production capacity sufficient The EIA nuclear power needs for a future 10-year period.
analysis shows that if a supply disruption were to occur in early 1986 the industry has the technical capability to fulfill cumu-10 years; lative uranium security requirements over the nextthe projected however, if a disruption were to occur in 1991, capacity of the industry wouldfor notseveral be sufficient years. toIn supply addition, uranium security requirements he -
the technical capability of the industry is dependentThus, upon tthe supply ability of the industry to generate funds.be reviewed in conjunction with the response capability must financial capability of the industry.
Financial capability is the ability of the. domesticfunds uranium to finance mining and milling industry to obtain sufficientThe domestic industry an adequate raintained an supply adequateresponse capability. supply response capability during 19 capital expenditures Tc' maintain this capability in the future,an import disruption would be higher than those projected without funds necessary. The potential to raise the required investmentupon hi would be dependent profitabilty.
Neither higher uranium prices nor improved profit- '
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' ability are projected by EIA for the uranium industry in the next several years.
i Import commitment dependency measures whether executed contacts or options for imported source material or special nuclearin more material will result domestic years.
uranium requirements for any two consecutive f 1985, do not amount to 37.5t-of domestic utility requirements in t
I any two' consecutive years.
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Figure 9. Historical and Projected U.S. Uranium Production Under Free Market Conditions: 1 Low Demand Case l
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Reregulatioe1 of coal ble for all tssues concerning the mdustry and professionai ma.
uranium industry. tions urging creation of the Couned CXports Cf1f1ouf1Cg Other members of the ASIC Cra- In a related deselopment. ASIC Coal exports again are subject to nium Pohey Council present at the reminded the National Secunty rate regulation by the Interstate meeting were: Roger Dewey. director- Couned(NSC)of theimportanceof a Commerce Commission (ICC),it was external affairs, Rocky Stountain strategic stockpde and reiterated its announced last week. Commission Energy Co.; James G. Randolph, suggestion that responsitithty for the Chairman ReeseTaylor said his dect- senior vice president, Kerr SicGee stockpile ba placed in an independ-sion results from an Appeals Court Corp.; St. Ian Ritchie. president, ent government corporation. The ruling th at oserturned ICC decisions Pathfinder Stines Corp :and Frank V. NSC met last week to discuss a staff exempting export coal from rate 5tchtillen, president, Umeteo Stiner- paper that urges a drastic cut in the regulation: the Supreme Court de- als Corp. stockpile, but took no action on the clined to resiew the decision last proposal. ( ASIC contact: Keith Knob.
month. Taylor said the ICC once I tarM Passes I ck,202;8612851.)
again will require railroads to tile tariffs for all coal stated for export House committee that is not otherwise covered by [Eg2 station that would place an $8- - . . . .
exemptions or contracts- per ton tanff ot. coal imports that i
Because contracts now are per- currentlyaredutyfreewas approwd mitted to take effect on the dates by the House Interior Committee Study claims staggers they are filed, special permission recently. Concerns over taking a f2lls CaptlVe Shlppers won't be needed for export coal con-protectionist" position in foreign tracts, Taylor said. To amid disruP- trade pobey were aired during the '"*"***E' U"'
tions, special perTnission was granted committee hearings, but Rep. Nick "*# **'**" * "# ""
for tartffs filed on one day's notice. In Rahall (D-%V), sponsor of the bdl. effectiwly"the protections contained addition Taylor said all tariffs filed said it would put U.S. coal producers in the Staggers Act for captne ship--
by radroads relating to export coal on *a fairer planng field.. pers has created the classic public tnat are equivalent to,less than, or The measure also stipulates that #I ** I"" """E
- not above increases on base rates in the Interior secretary will investigate m n pows @ Met pown,.
erTect on Oct.1,1980, will be pre- the relationship between coal im- * * ** * "*"*" * "
sumed to be reasonable. (ASIC con- ports and domestic programs, and ^*'"#* ^ "E "
tact: Stary Jane Due. 202. 861-2860.) his findings mil be reported within " g" 180 days after the bilfs enactment to Ot) er k y din port, ssued recently, are *an absence of the House Interior Committee and t the Senate Energy and Natural Re- competition and high concentration Pcould disappear sources Committee. If the imports De domestic uranium industry are basing an adverse impact, the ratios
- in the rail industry: *high and ngid* prices, which are esidenced in wdl soon disappear tf affirmatne gov- secretary will be able to offer legista- the failure of pnces to reflect " fun-damental changes
- in cost cenditions, ernmental action is not forthcoming, tne recommendations.
accordin g to Edward R. Farley. chair. The bill was approsed by a voice and ' predatory" and other behasior man and president of Atlas Corp.. vote, but stdi must be considered by aimed at presersing and expanding and Robert Luke, uce president of the House Ways and Steans Commit- the market power of the dominant Kerr.McGee Corp. Bey and other ' tee, which has tentattvely scheduled firms in the industry. CFA esttrnates members of the ASIC l.ranium Policy hearings for early June. ( AltC con- rad industry costs are running 30 Council. discussed their concerns tact: Stary Jane Due. 202 8612860 ) percent or more below pnces, but mth Energy Sec. John Herrmgton at
.large monopoly rents
- have been a recent meettng on the economic created by the industry. which are l plight of the domestic uranium in-equal to $3.50 per ton of coal on a '
dustry. Luke em- ,3.,; national average basis. ( AMC con-
? tact: StaryJane Due,202 861-2860.)
phasized that the domestic indus- Support for materfa!5 1 ,4 ,-
n e resul f s
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an inability to ~ The National Strategic Statenals compete witfi for- ( and Alinerals Program AdsisoryCom- Tra d r eign producers. ' mittee recommended last week that fOr but a result of the Administration promptlyestab- m market conditions Hemacos lish* the Critical Staterials Couned The space technology through caused by a worldwide glut of ura- mandated bya 1984 taw."Ihe commit- which countries and corporations nium.Herrington promised to issue a tee told Interior Sec. Donajd Hodel have found oil, mineral and water determination of the uranium indus- that the three membercouned would deposits they might not have found try's stability this summer. fill a long standing need to coordi- through land-based technology, has '
Also at the meeting. Herrington nate federal programs and policies received a new lease on life. Follow-announced that Joseph Salgada.the that relate to matenals and minerals.* ing months of hesitation and over Energy Department's under secre- The Amencan Stining Congress objections by the Office of Manage-tarp designate, would be responsi- joined more than 30 other national ment and Budget (OMB),the Admin-16 Ammcan Minsng Congress Journal
& c.los we 4- VoI 7i We m
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would have been unthinkable a decade ago. The tnple whammy of slumpmg en-ergy demand, the Three Mile Island acci-dent, and spiraling mterest rates was +
U.S. URA ;. IUM: AN INDUSTRY still a few years orf, and orders for new
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AM WR u u NC ar y h MMR Harmsy asmMCIAL STissuu. Washington also helped support the domestic market Un-ul 1977 it banned uramum imports alto.
ANNUAL OUTPUT HAS SLUMPED 66% IN mE 1AST FOUR YEARS, gether. and limits on foreign purchases j THROWING 90% OF EE LABOR FORCE OUT OF WORK en t c mpletely lifted unul last year.
nergy Secretary John S. Herrmg- Moreover. begmnmg m the early 1970s.
(page 114K) or Wyoming, and their ex- the Energy Dept. locked unlities into ton isn't exaggerating when he ports are nsing rapidly. Imports now are calls the U.S. uramum mming m- costly, long term contrsets for ennchmg double their 1983 level and compnse 37% uranium, the upgrading process neces-l dustry " nonviable." Cranium mining of U. S. demand. With foreign producers companies. battered by declining de- sary before uramum can be turned into expanding capacity even in the face of a mand and cheap imports. are on their reactor fuel. The utilities. feanng short- :
glut, imports are expected to double ages had to st..mble to buy as much
. deathbed. The Energy Dept. is trymg to agam as early as 1987. Phenomenally ursnium as they could to meet their come up with a cure. but, concedes Dep- neh and large foreign deposits, such as uty Assistant Secretary John R. Iengen- commitments to the government.
t those under development in the Canadi- But even when the boom began fad-ecker. "there is no near. term soluuon." an provmee of Saskatchewan, are profit-Mining companies are just as gloomy ing, the unlities' contracts-and similar able even at current depressed prices. ones with mine operators-kept them as longenecker. even though dozens of Says Donald G. Somers, a vice-president nuclear power plants are commg into buying far more uranium and ennch-of Saskatchewan Mming Development ment services than they could use. With semce after long delays (chartt "The Corp.: "The competition is bere."
mdustry is gomg through a pened these arnficial stimuli keeping the mar-l
- A evy e6 w. Minmg companies are ket humming, domestic and foreign pro-where most of the capacity is bemg lost, facmg a $4.4 billion bill to clean up radio-l and we'll have to start over agam " says ducers rushed to open new mines-just acuve residue at mills around the coun- as true demand was collapsing.
i Robert P. Luke execuuve vice-president try. Some uranium tailings piles date j
of Kerr-McGee Corp /s Quivira Mining Unfortunately for domestic prodtreers, back to the 1950s. Mine operators are the drop comcided with the end of U.S.
Co. and head of the Uranium Producers trymg to force unlines and the federal of Amenca. import restnecons. Meanwhile. France. '
goveniment-which bought a lot of the Bntain, and the Soviet Union were build-1 Stark statistics back up Luke's gnm uranium-to pick up part of the tab. But l
assessment. Annual U.S. uranium out- ing nuclear plants of their own. As part no settlement ts near. of the effort. these nauons set up urani-put has slumped 66% m the last four A uranium industry on its uppers years, to 14.9 million Ib.. in umennehment industnes bent on cut-the process throwmg 20.00 tmg rates to win business.
With the pr Ps kicked out
' mme employees-or 909 of the labor force-out of work.
5 M M M'" from under the U. S. industry.
98 i The spot-market pnee of ura- M IW G u t REACT 0t$ uranium producers recently n have been pushing for a re-i nium has skidded to $16 per GFE Muss W THE E 5. 82 J lt. from a high of $68 eight newal of import curbs. They l years ago. One result: With aren't likely to succeed. but . r
{ uranium preduction at a 30- 7f M 3 Hernngton has asked U.S. l '
year iow. domesuc p.odu:ers i " Trade Representative Clayton l ost $205 million last year. ' Yeutter to study how imports !
Among the industry's other can be discouraged short of 1 L woes- imposmg controls.
- assinwnees Nuclear utili- Among other things. the
, " Energy Secretary plans to de-ties' inability to come any. N m ,
" e where near the staggenng "" lay ennehing some of the gov-g ernment's uranium to avoid growth predicted in.past de-cades-smce the late 1970s. 4e
"*g gg gg further depressmg the mar-ket. Hernngton hopes that his plans for 100 atomic power r plants have been canceled- 15 RAT M 175 BAG plans wiii boost domestic ura-has left them holdmg an nium demand 109 by 1987 U.S. USAMUE P900WT10N eight year uranium supply. But production alrea'dy has i miuasus oms The federal government. 21 sunk so low that the improve- l meanwhile, owns 140 million U ment will hardly be nouce-
, ib.--enough to satisfy mili- M able. Fumes Peter J. Nickles.
- tary needs for 35 years. Washington counsel for the
- t : cm.ee imeere Canada. Aus- Uranium Producers of Amen-j traha, and other low cost pro- , ,
ca "The measures suggested by Herrington are hardly an ducers can mme urar%n for a fifth the cost of many mine N
m ,8 E adequate response."
- _ operators in New Mexico ,,,,, U.S. producers also want
, Energy to restructure its en i M
tt4 M Bv5 AESS *EECOCTOBEa 29 1985 l-
{ [ WOUSmES
l
{ .
l n e USineS i nehment agreements with utihues. The changing its contract, last month per- Uramum Recovery Co., are among the i
i department 6nally came up with a new suaded a federal court m Denver to handful of lowfost domesuc producers standard contract last year, dropping throw the agreements out. But that that have been able to defy the glut. But .
terms that comnutted utilities to pay for might not help much either Uranium is a few producers do not make a vibrant !
, services even if they didn't need.them. so cheap overseas that U.S. unlities can mdustry. For most U.S. mine operators.
The change should make U.S. ennch- easily buy and ennch cheap foreign ura- costs simply are so high that even a l
> ment more attracuve, but domeste mme ! nium abroad. pay Energy's contract-ter- surge m nuclear power plant orders-as l
owners fear that unlities will dll the en ! mination fees and sull come out ahead. unhkely as that seems-probably would l richment facihties with foreign uramum. It seems there is httle hope left for bene 6t foreign compectors first. !
Indeed, the federal government is al- the domestic uramum busmess. Some By Baroara Sca w := washington, uitA i l
ready ennching 10 milhon Ib. of foreign producers-such as Pathhnder Mmes Sandra D. AccAuon := Denive. Dassd As-uranium annually for U.S. utilices. Corp-sull are selling under old high- l ron in Toronto. Stephanie Cooke in I.an.
U.S. producers, allegmg that Energy , pnced contracts, and thus are managmg l den. Wilham Claspall in New York, and hadn't followed federal guidehnes before l to hang on. Others. includmg Freeport l bureau reports HOW THE URANIUM SLUMP COOLED OFF A NOT NEW MEXICAN MINING TOWN nly 6ve years ago. Florenuno s O Ortiz $32.000 Jr., 36, a year as a was uraniummakmg ,
,s i
mmer in bustling Grants. N.M. He i '
bought a house trailer and a new car, , --
took h;s wife and son on a two week i a, vacation, and had enough left over to i "
buy some property-just in ume to see ' ~
the uranium boom start to collapse for !
the second ume since the 1950s. -
Oruz was luckier than most. Al- .
s l
though his income began droppmg in 6
1981 as compames started curtailing
- uramum produccon. Oruz was able to hold on until a late wave of finngs -
swept across the industry in March-This year the Ortiz family is likely to earn around 512.000, mostly from his
$150 a week in unemployment benedts and the 5400 a month Yclanda. Floren-tmo's 36-yearmid pregnant wife bnngs in from a job as a jewelry-store clerk.
m somm m a wa smas une a m www ems camm me hes wate es ap o sonay sTafs. Hundreds of others m dropped back to their jomt preboom rearly 450 jobs by opemng a women's Grants are domg the same thmg. At populauon of 14.500. pnson and a highway mamtecance de-the.uramum industry's peax in 1M9. But Granta hasn't lost hope. Unlike pot. Grants also is trying to sell itseL' some 8.000 people were employed in 45 many depressed Western mmmg towr.s as a pnme tounst and retirement spot.
nearby mm(s. which accounted for half .that are locked away m remote moun- Sull, it will be years before the town the uramum production in the U.S. To- tams. Grants is just 70 mi. from Albu- recovers from the bust. Granta once day two mines are open. With those querque on Interstate 40. Tne town's was known as the carrot capital of the using only skeleton crews, total mine locauon. abundant labor, and cheap in- world. But water nghts were sold long employment around Grants has skid dustnal space have prompted Grants ago to erergy companies, eliminatmg ded to 250 workers. to promote itself as an ideal site for the chance agriculture will reappear.
Boarded-up windows are graphic evi- small companies to set up shop. Although many mme workers hope dence of Grants's sorry state. Dust lies A group of civic leaders formed the Washmgton will help revive thetr in-thick on the counters of the Uranium Greater Grants Industnal Develop- dustry, chances of a uraruum corr.e-Cafe. which was shut down in 1981. ment Foundauon two years ago to back are mmtmal. A year ago. Grants Ten percent of the houses in Grants "6gure out another reason for the stopped usmg a stylized atom as its are up for sale, and nearly two-thirds community to exist." accordmg to Ex- official symbol. And one day in Janu-of the town's mobile homes sit vacant. ecuuve Director Mark A. Lautman. So ary, just after Kerr McGee Corp /s Qui-And it's not hard to see why. The bet- far the orgamzation has lured a flash- vira Mining Co. announced it was clos- "
tmg once was that the area's popula- light plant, a warehouse for 2 potted- ing its mmes, the Grants Beacon
- tion would swell to 35.000 by 1990. In- plant dstnbutor, and a company that abrubtly erased "The Uranium Capi-
! stead. Grants and neighbonng Milan manufactures Indian-style sand pamt- tal" from its masthead.
j' reached a peak of 19.000 but then ings. Meanwhile, the state created By Sandra D. Atchuon in Grants i
Nowa'E 3 Bus. NESS WEECOCTOBER 26.1985 ff 4 K
r ~
Table 19. Comparison of Middle Demand Case Projections of U.S. Uranium Production and Import Dependency for the Years 1985, 1990, 1995, and 2000 Projection Year Source 1985 1990 1995 2000 Domestic Utility Requirements (million pounds U 10n) '
U.S. Department of Energy 1984 Viability Assessmenta .......... 38.2 38.5 39.8 46.6 1983 Viability Assessmentb .......... 37.0 41.8 45.4 53.4 Colorado Nuclear Corporationc ......... 29.0 34.0 34.0 30.0 Nuclear Assurance Corporationd ........ 35.0 40.0 43.0 44.0 U038 Prodr.ction (million pounds)
U.S. Department of Energy 1984 viability Assessmenta .......... 10.3 10.3 11.5 17.2 1983 Viability Assessmentb .......... 16.4 20.0 24.0 24.6 Colorado Nuclear Corporationc ......... 2.0 10.0 5.0 4.D Nuclear Assurance Corporationd ........ 15.6 14.0 15.0 20.0 Imports (million pounds Ugo n)
U.S. Department of Energy 1_984 Viability Assessmenta .......... 12.4 24.2 26.8 31.3 1983 Viability Assessmentb .......... 12.8 19.2 20.0 24.8 Colorado Nuclear CorporationC ......... 10.0 20.0 25.0 20.0 Nuclear Assurance Corporation d,e ...... 16.5 18.8 26.2 21.6 Imports as Percent of Projected Domestic Utility Requirements U.S. Department of Energy 1984 Viability Assessmenta .......... 32 63 67 67 1983 Viability Assessmentb .......... 35 46 44 46 ,
Colorado Nuclear Corporationc ......... 35 58 73 68 Nuclear Assurance Corporationd ........ 47 47 61 49 aThis report, Table 30 and Table E7.
b U .S. Department of Energy, Domastic Uranium Mining and Milling Industry: 1983 Viability Assessment, DOE /S-0033 (Washington, D.C.,
December 1984).
cColorado Nuclear Corporation, Review and Critique of United States Uranium Mining and Milling Industry: A Comprehensive Review, in support of the American Mining Congress testimony before the Energy Research and Development Subcommittee, Energy and Natural Resources Committee, U.S.
Senate (Washington, D.C., September 1984).
d F .J. Hahne, Nuclear Assurance Corporation, " Impact of DOE's Utility Services Contract on U 038 Demand and Production," speech presented at the Atomic Industrial Forum Uranium Seminar (Keystone, Colorado, October 1984).
- Imports were calculated as the difference between domestic demand and the sum cf domestic production and drawdowns of inventories.
54 Domestic Urenium Mining and utiling industry:
1944 Viebility Assosoment /
Energy Information Adminletration M 05Wd O
23 05/13/85 TABLE 9 URANIUM MILLING 1/
E.1A1 E.112 Elt1 EY.85 E.X.Ak EY.AZ E.1.EA EW FACIfJI111 2/
RECEIVED (CASES) 0 0 0 1 1 0 1 COMPLETED (CASES) 0 0 0 0 1 1 0
. 4JOR AMENDMENTS 1/
RECEIVED (CASES) 20 1/ 8 8 8 8 8 8 ENEWALS 1/ -
RECEIVED (CASES) 2 2 1 0 3 4 2 JTAL LICENSED 5/
END FY 15 15 15 15 16 17 17 M8 1/ ALL RECEIPTS.ARE IN RECION IV EXCEPT ONE MILL LOCATED IN VIRGINIA IN FY91 WHICH WILL BE A HEADQUARTERS RESPONSIBILITY ~
2/ IDENTIFIED COMPANIES ONLY
! 1/ RENEWALS AND MAJOR AMENDMENTS BASED ON IDENTIFIED COMPANIES, l RENEWAL CYCLE, AND RECEIPT OF NEW CASES 1/ INCLUDES TEN AMENDMENTS BASED ON 10CFR40, APPENDIX A.
5/ TVA AND EXXON MILLS ARE BEING DECOMMISSIONED. TERMINATION FOR EXXON ANTICIPATED IN FY94. TVA TERMINATION ANTICIPATED IN FY91.
l-1 Ene/0. sac 7 l
l _ __
25 05/13/85 TABLE 11 SDLUTION MINING (COMMERCIAL SCALE) 1/
E111 Elli EXII ElRA E111 Ella E12_t IW FACILITIES 2/
RECEIVED (CASES) 0 2 1 1 1 1 0 COMPLETED (CASES) 1 1 1 1 1 1 1 AJOR. AMENDMENTS 1/
RECEIVED (CASES) 2 2 1 2 2 2 -2 INEWALS 1/ -
RECEIVED (CASES) 0 1 1 2 0 1 2 ITAL LICENSED END FY 4 5 6 7 8 9 to 1_T_lUi:
1/ ALL RECEIPTS ARE IN REGION IV 2/ IDENTIFIED COMPANIES.
l 1/ ESTIMATES BASED ON EXPERIENCE, NUMBER CF LICENSED FACILITIES
! AND IDENTIFIED COMPANIES.
i l
t Nf(
_ _ . - - - . . . _ .