Coles Hill site has an estimated 119 million pounds of uranium worth over $5 billion at current prices
This blog post is an edited version of an article published in Fuel Cycle Week, V9:N366, March 3, 2010, by International Nuclear Associates, Washington, DC.
The long-awaited study on the environmental and economic impacts of the giant Coles Hills deposit, a proposed uranium mine site in Pittsylvania County, Virginia, will start this month. The National Research Council will undertake an 18-month, $1.4 million review of the question of whether uranium can be mined and milled safely at the site. [study website]
What's riding on the outcome is the development of a mine with a NI 43-101 report detailing a measured and indicated resource of 119 million pounds of uranium. Also, according to company managers, Virginia Energy (CVE:VAE) plans construction of a mill capable of producing 3.5 million pounds a year.
Large mill needed for the mine
The output yield of the mine is expected to be 1-2 lbs of uranium per ton of ore. Assuming the mine operates 350 days/year, the mill would have to process 5,000 tons/day of ore to produce 10,000/lb/day of U308.
This is a large mill by industry standards. Even so, at this rate, it would take 34 years to mine and mill the resources at the site. The size of the mill operation and its production capacity would expand over time. Actual production would be less as underground mining would not recover all of the resource.
Target audience is the Virginia General Assembly
The State of Virginia currently bans uranium mining, but the General Assembly could overturn it if the study results are favorable to uranium mining. The study is being managed by The Center for Coal & Energy Research at Virginia Tech. The entire cost is being paid for by Virginia Energy as part of its 28% earn-in equity position in the Coles Hill uranium deposit.
Norman Reynolds, CEO of Virginia Energy, told FCW the reason the firm agreed to have the National Research Council do the study "is that their reputation is beyond reproach." Michael Karmis, Director of the Virginia Tech research center agreed. He said, "the source of the money is irrelevant."
Jennifer Walsh, a spokesperson for the National Research Council, told FCW the official sponsor of the study is Virginia Tech. She confirmed that the study is just getting underway with the recruitment of experts to serve on the panel.
"This will take some time," she said. However, she also confirmed that the panel is tasked to complete its work by December 2011.
CEO Reynolds said the study is "an opportunity to have preeminent scientists provide independent and credible information about the development of a uranium mining and milling industry in Virginia."
He said Virginia Energy believes the outcome of the study "will provide Virginia with enough information to confidently bring uranium mining legislation and a permitting framework into being."
Best case scenario for opening a mine
Wales noted that although Virginia is an "agreement state" with the NRC, under the current arrangement, that agency would still have the authority to issue a source materials license for the uranium mill.
"Our best case scenario is that we could be in production with a mine in four-to-five years. However, that's an aggressive time line," Wales said.
He declined to estimate the cost of developing the mine or building the mill. "They're just too far in the future," he said.
Opponents worry about bias
Opponents of the mine are not convinced that the organizational firewall at Virginia Tech between Virginia Uranium and the National Academy will work. Jack Dunavant, a registered professional engineer who heads up a citizens group opposed to the mine, told FCW that he feels the money from the company "will taint the results."
He claims that tailings from the mine and the mill will be disturbed by Virginia's wet weather leading to increased exposure to alpha radiation and increased cancer cases from ingestion and inhalation of uranium dust. The area receives 40-50 inches of rain a year.
"I'm very wary of the conclusions that will come out of this study. Virginia Energy will leave no stone unturned to get their way."
Wales says that area opponents of the mine are ignoring the jobs that will come from the mine and the mill. He said the two facilities will eventually require 300-500 people and pay wages that are "far above the prevailing rates" for other jobs in the region. Wales noted that the current unemployment rate in the area is 15%.
Those economic arguments cut no mustard with Kate Maute, who is leader of a mine opposition group in Pittsylvania County. She told the Danville Register Feb 27 she is doubtful about the economic benefits that would come with development of the mine and she wants absolute certainty about health and safety issues before the mine is allowed to be built.
It is quite possible that no matter what the outcome of the NAS study, opponents of the mine will continue to have doubts about resolution of environmental issues for the project.
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