Saturday, April 26, 2008
(A monthly column of money and mining news items)
The rise of nuclear energy, a second act if ever there was one, has given the price of uranium a shot in the arm. In western states in the U.S. interest in uranium mining is growing and with it comes another growth industry - the production of press releases about the uranium mining industry.
In an effort to separate the really interesting from the merely informational, I'm posting my running notes on uranium mining in western states. The choices of the subjects are a combination of what I find in the press release pile and what looks interesting to me and for readers.
I'm focusing mostly on western states that are "west" of the 100th meridian, but this isn't hard and fast. The states of interest are WY, CO, UT, TX, NM, AZ, & NV. For this reason I'm calling this series, which will appear monthly, the "western lands uranium gopher." These are news notes and the content is not to be considered investment advice.
Uranium Bill Moves to Colorado Senate
HB 1161, the survivor of a two pronged legislative attack on uranium mining in the Colorado House, moved to the Colorado Senate where it passed April 16 in a unanimous bipartisan vote of 7-0 in the Senate Local Affairs Committee. The legislation would require uranium miners to prove they can return groundwater to pre-mine conditions. In instances involving an ISR mine, where the groundwater is already “contaminated” with uranium, that’s not much of a stretch. Water testing under the new law would have to be completed by a third-party contractor rather than the mining company, which is a major shift in state law.
The legislation was originally introduced to cover all mining in Colorado, but after protests from the mining industry, was watered down to solely target ISR uranium mines. The legislation was introduced in the House earlier this year by two Democratic state representatives from the Ft. Collins area who responded to vitriolic public criticism of a proposed ISR mine to be located near Nunn, CO, about 15 miles northeast of Ft. Collins. Powertech, a Canadian firm, is the developer of the mine. It is the only proposed ISR mine in the state so far.
Powertech said in testimony about the legislation that the firm does not oppose the initiative. However, Dick Brown, a spokesman for the firm, told the Ft. Collins newspaper he wants the definition of “uncertainty” in the bill tightened up so that it can be calculated by scientific measurement and not by public opinion.
“What we have worked for is amendments to make it more workable and more pragmatic for mining interests in Colorado,” he said.
Civic concerns aired in Weld County
While the most vocal opposition and the legislative proposals have come from Larimer County, the mine site is actually located next door in Weld County. Two days before the vote in the Colorado State Senate, the Greeley city council passed a resolution against the ISR mine saying there were too many unanswered questions about it. The vote was not unanimous. The Greeley Tribune reported that Mayor Ed Clark and Councilman voted against the measure.
On April 10 the Greeley Tribune published an editorial cautioning the city council not to pass a resolution against the mine before all the facts are in. The editors wrote, “We’re skeptical of Citizens Against Resource Destruction.” And the editors wrote, “We’re not ready to dismiss uranium mining just yet. Powertech’s proposal is tempting with claims of up to $3 million in tax revenue and $25-30 million brought into our local economy, including hundreds of well paying jobs.”
The editorial also pointed out Powertech has not yet applied for a permit for the mine which is located in Weld County north of Greeley. The editors wrote, “By the time Powertech brings the proposal before Weld County Commissioners, the company should have a detailed analysis.”
Uranium mining along Utah Arizona border draws fire
Opposition to uranium mine exploration along the rim of the Grand Canyon has created a rift between communities on either side of the Utah Arizona state line. The ‘Arizona Strip’ which is just south of Kanab, UT, includes Kane County which this week pulled out of a cross-border economic development association because of opposition in Arizona to uranium mining. On the Arizona side the Coconino County Commissioners voted to oppose Vane Uranium’s exploratory drilling near the rim of the Grand Canyon. The resolution urged Congress to enact legislation that would ban all uranium mining on federal lands around the rim of the canyon in order to promote tourism. The Vane drilling site is inside the boundaries of the Kaibab National Forest seven miles from the rim of the Grand Canyon.
Kane County Commissioner Daniel Hulet told the Salt Lake City Tribune on April 6 the county is at odds with its counterpart in Arizona because uranium mining, and timber, generate more jobs and economic benefits than tourism. Utah State Rep. Mike Noel, who represents the area, told the newspaper the resumption of uranium mining is in the best interests of the county and the nuclear industry as well as promoting generation of electricity without greenhouse gases.
Noel also introduced a resolution in the Utah Public Utilities & Technology Interim Committee, which he co-chairs, aimed at preventing the U.S. Forest Service and Bureau of Land Management from stopping uranium mining and oil & gas development. While the resolution has no legal standing relative to federal environmental laws, Scott Florence, a BLM spokesman, said environmental impact assessments done 20 years ago still are valid for mining projects. He added that two other uranium mining operations are getting ready to do exploratory drilling despite the troubles with the Vane project.
Noel’s interest in uranium mining isn’t entirely provincial. He is teaming with Utah Rep. Aaron Tilton to try to develop a merchant nuclear reactor in Utah to fill in the power gap created by the cancellation of a 900 MWe coal fired plant last year. The plant was to be built with funding from the city of Los Angeles, but it pulled out citing the effects of greenhouse gases on global warming. However, California still has a 30-year ban in place against new nuclear power plants. How future baseload demand will be met in Utah and California is anybody’s guess regardless of whether uranium is mined in Arizona or not.
British Columbia bans uranium mining
The Canadian province of British Columbia has placed an official moratorium on uranium mining and exploration. Anti-nuclear groups had previously placed a ban in uranium mining in 1980, but it lapsed in 1987. The low price of uranium at the time made the ban moot. The rising price of uranium has re-awakened interest in the metal.
The government’s decision came as a surprise to mining companies. Boss Power Inc. told the Globe & Mail newspaper that it had a deposit potentially worth $1 billion which they now cannot mine. There is no other uranium mining in the province. Saskatchewan produces one-third of the world’s uranium.
Bluerock updates Utah project progress
Bluerock Resources reported that it has signed off on a toll milling and ore purchase agreement with Denison Mines. The agreement secures for Bluerock the capacity to process 60,000 tons of ore in 2008 and 100,000 tons of ore in 2009 and 2010. Assuming an average yield of four pounds per ton of ore, the total output of U3O8 for the three year period will be 1.04 million pounds. At $75/b the output has a potential value of $78 million. The agreement comes to an end in 2010 because Bluerock expects to have its own mill in operation in 2011.
Bluerock Resources announced that it has purchased a 100% interest in the Mancos Uranium Mill Project near Green River, Utah via the acquisition of Mancos Resources Inc. The mill site is expected to use streamlined permitting processes in Utah with a forecast three to four year development timeline for a new standalone 1,200 ton per day milling complex.
The proposed 1,200 ton per day uranium mill will be located on a property six miles northwest of the town of Green River covering an area of approximately 640 acres of land. Key MRI employees have joined Bluerock to ensure the mill permitting and construction processes are successful.
The Mancos Uranium Mill Project is in the permitting/design phase with an estimated start-up date of mid-2011. Public consultation, baseline environmental, and geotechnical assessments have begun, and MRI has also commenced the selection process for design/build engineering firms. The mill is located near Bluerock's uranium projects in the San Rafael Swell, Orange Cliffs and Uravan uranium districts.
Under the terms of the agreement Bluerock will acquire 100% of MRI by fulfilling the following terms; payment of $286,514 (200% of expenses incurred by MRI to date), and 1,500,000 shares of Bluerock. Bluerock stock at market close on April 18 was $0.72/share compared to a 52-week high of $0.90 last month. At the market close price the 1.5 million share of stock would be worth $1.08 million.
Strathmore acquires new Gas Hills uranium deposits
Strathmore Minerals Corporation announces that it has acquired an additional 2.1 million pounds of historical near-surface uranium resources (not NI 43-101 compliant), by staking lode mining claims in the Gas Hills Uranium District, Wyoming.
The Company now holds over 33,000 acres with several historically-defined uranium deposits in the Gas Hills, many of which were planned and fully permitted for open-pit mining in the early 1980's. Strathmore controls 100% of the Gas Hills projects, which now make up the Company's core uranium land holdings in Wyoming.
The newly staked uranium properties, known as the Amazon and Sunset deposits, were previously defined by Federal American Partners (FAP) in 1984. The newly acquired properties complement Strathmore's existing Gas Hills deposits. Production, subject to obtaining the necessary permits and regulatory approvals is planned for 2010.
New Horizon completes acquisition of two mines
New Horizon Uranium Corp. announced that it has acquired the Buck and the Wild Horse uranium properties by staking Federal mining claims. The Buck property in Montrose County, Colorado and San Juan County, Utah is an area of earlier underground uranium mining in the 1950’s at the northwest end of the Paradox Valley. The Wild Horse Property in Humboldt County, Nevada is in an area of previous uranium exploration by Exxon Corporation and adjacent to historic gold and mercury mining. Both properties have no drilling on them and mapping and additional prospecting work is planned for the summer of 2008.
Bill Wilson, President and COO of New Horizon said, “The Buck property is less than twenty miles from the Pinon Ridge Uranium Mill now being developed by Energy Fuels Corporation near Naturita, Colorado."
Tecton gains Swiss investors for Utah mine
Tecton Corp. announced it has entered into a twelve-month financing agreement with Swissalis Group AG of Zurich, Switzerland. Tecton is a US-based exploration company focused on the acquisition and development of a portfolio of uranium properties in the USA and Canada, while Swissalis is a company that specializes in financing junior resource companies by way of private placement.
The agreement between Tecton and Swissalis calls for Swissalis to contribute $1,500,000 in financing to support Tecton’s business plan. Tecton’s business plan is currently centered on advancing two important uranium projects: the Firefly project in south central Utah.
Tecton Corporation also announced it has expanded its land holdings at the Firefly Project in Utah. Tecton holds an option to acquire 100% interest in approximately 4,000 acres as 207 unpatented federal mining claims within the La Sal uranium trend. The claims cover both the Firefly Project and the Grey Daun Mine holdings. Tecton plans an aggressive exploration program with the goal of discovering new uranium deposits.
Firefly is located in San Juan County, Utah, which is approximately 25 air miles southeast of Moab, Utah. The Firefly mine was discovered in 1952 as an extension of the Grey Daun Mine. Production records are incomplete; however, it's likely the two mines together yielded up to 100,000 lbs of U3O8 and 500,000 lbs of V2O5 up through the 1970's. The average grade of the known production was .41% U3O8 and 1.8% V2O5.
Friday, April 25, 2008
Enel SpA. plans to build a nuclear power plant in Italy to take advantage of an expected legislative shift that will put the nation back on a path to using nuclear power. Italy has banned the construction and operation of nuclear power plants within its borders in 1987. However, it isn't shy about buying electricity from France generated from nuclear plants there. Overall, it is a positive development and one that has been expected for some time.
The Financial Times Deutschland reports chief executive Fulvio Conti said, 'We are capable of presenting such a project. 'It would take seven to 10 years until a new nuclear power plant could come online.'
Silvio Berlusconi, the head of a coalition that won the general elections, advocates the reintroduction of nuclear power and believes it could take five years to build a power plant. Politicians are always more optimistic than engineers, but he's set a direction for the government which is what counts.
Conti said it is not yet clear where a new nuclear power plant could be built, as Italy is a "small, densely populated country. We do not have a preferred location," he said.
It's also possible Conti has been reading the news coverage of what's going on in the U.S. at Vermont Yankee. He told the TImes, "it would be dangerous to name possible sites now anyway, that would lead to a revolution." This comment suggests that while the country's political leadership and the utility are ready to go, getting the voters to sign up will be an uphill struggle.
Italy's waste is Utah's headache
One of the problems Italy has, as a "densely populated country," is where to dispose of its low-level nuclear waste. A proposal to ship it to a facility in Utah has run into a political storm. The Salt Lake City Tribune reports Utah Gov. Jim Huntsman has mounted on a white charger, drawn his sword, and plans to defend Utah against Italy's waste plan.
The Tribune reported that Huntsman said he would use Utah's vote in a regional nuclear waste council to stop the disposal of foreign radioactive waste in the United States. Without Utah's "yes" vote, EnergySolutions cannot get a federal license from the NRC to bring the Italy waste into the United States.
"As I have always emphatically declared," Huntsman said, "Utah should not be the world's dumping ground."
EnergySolutions reportedly asked for the license last September. The company's plans is to ship 20,000 tons of low-level waste from the cleanup of Italy's commercial reactor program. Apparently, someone in Rome forgot to tell the voters that when you shut down and decommission a nuclear power plant the pieces of it you want to get rid of have to go somewhere else. If you don't have room for it, you've just encountered a counter intuitive result caused by the law of unintended consequences.
EnergySolutions said it wants to process that material at a specialized plant in Tennessee, then dispose of the remaining 1,600 tons at the low-level radioactive waste landfill in Tooele County. Basically, this plan reduces the volume by a factor of 10. EnergySolutions pointed out that similar imports have been going on for years and that this shipment would have a tiny impact on overall U.S. capacity for radioactive waste disposal.
The company said it was "disappointed" by the governor's stance.
The Nation, an international journal of progressive thought, has published a major attack on the nuclear renaissance. In an essay published April 24 Christian Parenti, a noted author of several books on political science and sociology, writes a hostile review about the turn around of the nuclear industry.
There is one part of the article I liked, and that is Parenti's poetic remark, "where industry and science seek to reproduce the process that occurs inside the sun." That's the whole point of harnessing the atom. Why would any environmental group want more coal plants? That's the de facto choice once you take nuclear energy off the table.
It seems absurd as though the Nation would seek to stop the collision of galaxies in outer space. Not going to happen. The point of posting the picture of colliding galaxies is to emphasize that nuclear chain reactions are basic to the physical underpinnings of the universe and are are not inherently evil even if Mr. Parenti would have us think so.
The only line of criticism Mr. Parenti didn't take, despite a crack about HEU and plutonium which was incorrect, is that he didn't lump commercial nuclear power in with an assortment of nonproliferation issues. The editors get a nod for not including in a picture of an atomic bomb blast with the article.
There are several places where his essay hits a few potholes in the road to a predictable conclusion we're better off turning out the lights than using nuclear reactors to address the problem of global warming.
Perhaps one of the most significant things Parenti fails to get right is his characterization of federal loan guarantees as "subsidies." In fact, the legislation that set up the program, and the Department of Energy, which runs its, are clear that any nuclear operator that gets a loan guarantee is simply buying insurance for 80% of the cost of the plant. That's not a subsidy. A subsidy is when the government buys down the cost of ethanol from corn to be used in a blend with gasoline, which is a failed energy promise if ever there was one. it is also worth noting that even the Nuclear Regulatory Commission has observed that the loan guarantees fall short of their intended objectives.
Parenti works hard to get mileage out of the cancellation of MidAmerican's proposed plant for Payette, ID. Having covered that proposal in depth on this blog, it is worth pointing out that a bad business decision by one firm isn't a justification for tarring an entire industry with a broad brush. The MidAmerican project had a number of problems from the start including a decision to choose a greenfield site with no infrastructure, a reactor design not yet certified by the NRC, and unrealistic expectations about the costs of large forgings for a first-of-a-kind plant.
The other plant Parenti says is a failure isn't one. The Summer Nuclear Station filed its application with the NRC earlier this month. After hesitating last January the project came back just 90-days later to finish the job. Even more to the point, the Southern Company has signed an Engineering & Procurement Contract (EPC) for two new Westinghouse AP1000 reactors that will supply 2,200 MW of electricity.
The NRG twin reactors planned for the South Texas Project are moving ahead although Parenti would like his readers to believe they will not. In fact, NRG asked the NRC for more time to complete price negotiations with suppliers before proceeding with review of its license application. When you are buying components priced in the range of hundreds of millions of dollars, these things take time. These items aren't impulse purchases. Better to get it right. Also, it shows NRG is realistic about the challenges it faces in the current era as compared to the first generation of nuclear plants.
The relicensing of Vermont Yankee and similar opposition to the Indian Point plant in New York are becoming rallying cries for the anti-nuclear movement. Turning to Vermont Yankee, what we are dealing with is a fanatical anti-nuclear movement which this week went over the top when a leader in the State Senate lost it on the steps of the state capitol and called an executive from one of the largest employers in the state a "liar" to his face. When you have cheap electricity from nuclear energy which keeps thousands of people on the job, and your alternative is $100 plus-per-barrel oil, why would you make waves by throwing rhetorical rocks in that political pond?
There are serious questions that are being ignored by the Nation and its readers. If you agree that energy is wealth, and that wealth from energy leaders to a better quality of life, why do you oppose nuclear energy? The alternative isn't solar or wind, which cannot keep the lights on in our cities by themselves. There is only one other choice to fossil fuels, and the greenhouse gases that come from coal, oil, and gas. The Nation's essayist doesn't get it.Update 04/26/08
After posting this article yesterday, I was pleased to see, independently, two fellow bloggers weigh in on the Nation article as well. Click on the links below to read there responses to the Nation article.
Anti-nuclear rubbish article of the week
Divergent views about nuclear power economics
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Note on the graphic
NGC 6050/IC 1179 (Arp 272) is a remarkable collision between two spiral galaxies, NGC 6050 and IC 1179, and is part of the Hercules Galaxy Cluster, located in the constellation of Hercules. The galaxy cluster is part of the Great Wall of clusters and superclusters, the largest known structure in the Universe. The two spiral galaxies are linked by their swirling arms. Arp 272 is located some 450 million light-years away from Earth and is number 272 in Arp's Atlas of Peculiar Galaxies. This image is part of a large collection of 59 images of merging galaxies taken by the Hubble Space Telescope and released on the occasion of its 18th anniversary on April 24, 2008. (NASA, ESA, the Hubble Heritage Team - STScI/AURA-ESA/Hubble Collaboration, and K. Noll - STScI/Handout/Reuters)
Wednesday, April 23, 2008
A news conference called by a group of business leaders to defend the low electricity rates they get from Vermont Yankee descended into serious name calling on the steps of the state capitol. The lug nuts have come off in the political version of a major demolition derby with the Vermont legislature colliding with the economic future of the state's citizens.
Senate President Pro-Tem Peter Shumlin (D-Windham) confronted IBM executive John O'Kane and called him a "liar" about the group's opposition to S.373. The bill would require Vermont Yankee to come up with $400 million by 2012 for a decommissioning fund that might not be needed for at least two decades or longer.
The business group, which includes the state's largest employers, called the legislation misleading, arguing that a letter of credit, or guarantee, was the functional equivalent of a massive new balance sheet liability. IBM representative John O'Kane told reporters the bill effectively threatens cheap electricity rates that favor doing business in Vermont.
The business group strongly condemned two bills that later passed in house committees that could change the rates because of higher operational costs. The bills have passed in the state senate.
According to news media reports Shumlin went face-to-face with O'Kane and began shouting at the business leaders. The situation got so bad that Vermont Gov. Jim Douglas called O'Kane later that day to apologize on behalf of the state. He called Shumlin's behavior "disgraceful."
Meanwhile, two bills passed on Vermont House committees that could affect the long term viability of the nuclear plant. The House Commerce Committee approved the requirement for the decommissioning fund. The House Natural Resources Committee passed a bill that will require a special independent inspection of the 36-year old plant.
Entergy, which owns and operates Vermont Yankee, is in the process of reorganizing a limited liability firm called Newco. Critics of the move claim it will allow Entergy to avoid financial accountability for the future operations of the plant. Entergy executives denied the charge.
The independent inspection would set up a special five-member oversight panel, which would be reported to by a technical team that would do hands-on inspections of eight different plant systems at Vermont Yankee. It would take place separately from the NRC's current evaluation of Entergy's request to relicense Vermont Yankee for another 20 years.
Vermont Yankee provides one-third of the state's electricity at rates that are much lower than fossil fuel costs. The contracts are up for renegotiation now as Yankee applies for a 20-year license extension. Shumlin and other anti-nuclear politicians want to see the reactor shut down.
Monday, April 21, 2008
Readers of this blog will recall that Bob Hargraves is teaching an eight-part class at Dartmouth called "Rethinking Nuclear Energy," and he is publishing his slides and lecture notes online. Part 4 is now online along with Parts 1-3. There are reading lists, links to online resources, and exercises tied to the class. It is a great resource.
Bob has been updating me on the class and here is his latest note.
I had a great time in class today. We finished "3. Environmental Choices" and presented most of "4. Current Technology", which started off with a review of the Rickover influence by ex-submariner Howard Schaeffer, who also worked at local nukes Seabrook and Vernon. Both sessions are now posted on the website below.
The students are having a great chuckle with the homework problem about Vermont's energy crisis.
PS: Partway down the main page I posted "Nuclear Power Physics in 4 Pages", by Ben Brabson of Indiana University. It's a concise introduction to his physics course.
Bob is also the publisher of the blog Pebble Bed Reactor. You can check out the class and the blog anytime.