Companies hope to jump-start uranium mining

A sign attached to a barbed-wire fence warns people to stay out of the area as a grader and other heavy equipment move dirt around and churn up dust Wednesday afternoon at the Rio Algom mine site alnog Hwy 509, north of Milan, NM. [Photo by Jeff Jones/Independent]

By Kathy Helms
Diné Bureau

GRANTS — The Grants Mineral Belt is being carved up for uranium mining and milling operations, and conventional underground mining is expected to play an even bigger role than in-situ recovery operations, according to representatives of Neutron Energy Inc. and Uranium Resources Inc.

The area around Mount Taylor — a sacred site to the Navajo Nation as well as the 19 pueblos of New Mexico, including Acoma and Laguna — is a prime target for mining and milling.

George Byers, vice president for Neutron Energy, and Rick Van Horn, executive vice president and chief operating officer for URI, presented the New Mexico Radioactive and Hazardous Materials Committee with an update on the uranium mining industry at a meeting Monday in Grants.

“We’re going to have probably at least one in-situ operation, at least two mills — one on the east and one on the west side of Mount Taylor, at least initially, five or six underground mines, and total employment of probably 1,400 to 1,500 people,” Byers said of Neutron Energy.

Rail transport
He also told the committee that his company, Santa Fe Pacific, originally permitted and built the Lee Ranch Coal Mine, located about 25 miles north of Grants, and still operates the common carrier railroad that hauls Lee Ranch coal to market.

Van Horn said the future of mining in New Mexico is the conventional mill, “and that’s what’s going to get us jump-started.” With URI’s recent acquisition of BHP Billiton’s Rio Algom mill, formerly Kerr-McGee’s Ambrosia Lake, URI can cut in half the time it takes to construct the mill, he said.

“It positions us as a leader here, and we will be the leader, both from a safety and economic standpoint,” he said. It also gives URI two Nuclear Regulatory Commission licenses.

URI plans to duplicate the footprint of the Ambrosia Lake Mill, where infrastructure is already on site, and to finish ongoing reclamation.

“We already hold an NRC license at Churchrock/Crownpoint. This will give us our second operating license, and we will be the only one in the state, so far, that has NRC licenses to operate uranium recovery facilities.”

URI has 92 million pounds of uranium in reserve in New Mexico. “We have an extensive database that we’re using to look for more reserves, and through Santa Fe Pacific Gold we acquired 183,000 acres of land that is amenable to uranium mining,” Van Horn said.

Though URI has in-situ recovery operations in Texas, “Most of our resources are in the state of New Mexico. This is our future. That’s why we’re here,” he said.

URI also acquired 9,700 acre-feet per year of water rights to support milling activities. Its subsidiary, Hydro Resources Inc., has applications on file with the New Mexico Office of the State Engineer requesting appropriations of groundwater for in-situ recovery projects in McKinley County at its West Largo and Roca Honda project sites.

Each application seeks 650 acre-feet of water per year for the next 50 years in the Bluewater and Rio Grande basins. Conventional mining also requires considerable amounts of water. The Roxby Downs uranium mine in southern Australia, operated by BHP, is reported to use 35 million liters of water per day.

Van Horn said that with the in-situ recovery operation, “when we locate an ore body, we cannot inject distilled water in that ore body if it is a drinking water source.”

“It has to be specifically exempted by U.S. EPA, and we get an aquifer exemption for that, which is an exemption that says you cannot use this water in this ore body for drinking water because it’s already toxic, it has uranium in it already, that’s the way Mother Nature put it there and it should not and cannot be used as a public water supply.

“When we restore this, we restore it back to its previous use. If it was toxic before, it will, in all probability, be toxic after. And that EPA aquifer exemption will remain in place. We don’t restore toxic water to drinking water standards. It can’t be done.”

Lots of ore
Van Horn said URI has a large asset base in New Mexico that it wants to take advantage of. “Through the acquisition of the Rio Algom mill, we have the opportunity to be the first, and right now the only ... regional miller in the Grants Mineral Belt, constructing an 8,000-ton-a-day mill, providing 200 jobs just at the mill, and potentially 3,000 to 4,000 direct uranium jobs in the district.

“This isn’t flipping McDonald’s hamburgers. This is working in the uranium industry, whether you’re mining, milling, hauling it, drilling for it, whatever. And finally, we believe we have the experience and management team to carry this off,” he said.

Though in-situ recovery of uranium is more cost-effective than conventional mining operations, according to Van Horn, “The truth is, about two-thirds, if not more of the uranium here in the Grants Mineral District is not amenable to in-situ recovery.” It has to be mined with conventional methods, he said.

An in-situ recovery plant costs about $20 million to construct and will produce 1 million to 2 million pounds of uranium per year. “We can construct them in about 18 months after we receive our license,” he said.

“A conventional mine, on the other hand, the mine alone is $130 million to $150 million. It takes three to 3 1/2 years to get it permitted, maybe four years — that’s with no limiting conditions. That’s permitted and built. These would supply, under our scenario, something like 5 million to 8 million pounds per year, depending on which mines are operating.

“Production costs for these two methods, if we had our druthers, ISR would be the way to go with everything. It’s $30 to $50 a pound,” Van Horn said.

Mill costs
The cost to construct a conventional mill to mill the uranium ore is $250 million to $350 million. “We believe with the actions that we have taken recently ... that the time to operation will be in the range of four to five years.

“This compares with building a Greenfield mill, or mill site on ground that hasn’t been permitted already, of eight to 10 years,” Van Horn said.

Neutron’s Byers told the committee that probably the most environmentally conscious president America ever had was Teddy Roosevelt. “And President Roosevelt said, ‘Do what you can, with what you have, where you are.’”

“We have chosen to do what we can right here, centered around the Grants community, because centered around here is about 600 million pounds of uranium that all of us know of.

“New Mexico is where we place our emphasis and it’s not just because of the uranium in the ground, it’s because of the real corps of highly skilled workers who are here, who worked in uranium in the past, and whose sons and daughters are now ready to go to work for us,” Byers said.

He told the committee of the economic growth he had witnessed in Wyoming due to the energy industry.

“What is interesting in Wyoming — and I have learned this, it’s a hard lesson — Wyoming doesn’t have a hotel room to be had. You have to call weeks in advance when you’re going. You can’t wait till the last minute because every room is full, every road and bridge in the state is getting rebuilt; schools are going up. There is no recession. There is no unemployment in the state of Wyoming.

“And all this is being done on the backs and shoulders of blue-collar gals and guys who are working in all those industries ... They are putting into practice what President Roosevelt was preaching.”

On Oct. 3, Trans America Industries of Canada announced that its joint-venture partner, Neutron Energy, has essentially completed its uranium acquisition program in the western United States “and is now preparing a strategic plan to exploit the potential of its assets in the coming months.”

Of particular interest to Trans America are Neutron’s holdings at Ambrosia Lake. One of the Ambrosia Lake joint-venture projects, East Roca Honda, is situated immediately adjacent to Strathmore Minerals’ Roca Honda Project, which is currently the subject of a development agreement with Sumitomo Corp of Japan.

According to Trans America president, John C. Campbell, East Roca Honda and the Cliffside/Frosty Ox areas will be priority targets,” according to a news release from Trans America.

In written testimony to the state committee, Byers said that in the area from central McKinley County to the villages of Seboyeta in Cibola County and Marquez in far eastern McKinley County, there is the initial likelihood of four to six new underground uranium mines.

These would be developed from the areas of the Cebolleta Land Grant and the Juan Tafoya Land Corp., east of Mount Taylor to the region north of Grants from San Mateo to west of Ambrosia Lake.