Gateway, COComment: Uranium mining will be a total economic and health bust! Demand Virginia leaders to ban uranium mining! (Thanks k)
Insight - A New Economy Emerges in Western Colorado
A new Sonoran Institute report uncovers economic risks associated with renewed uranium mining in Mesa County, Colorado. The research report provides perspective and recommendations for local officials. Read the report (PDF).
URANIUM MINING (Gateway, CO)
Uranium mining activity in the Gateway area is currently centered at the
Whirlwind Mine. In September 2008, Energy Fuels Resource Corporation
(Energy Fuels) completed the permitting process to mine up to 200 tons per
day of uranium ore at the property, which is approximately four miles southwest
of Gateway on the Colorado-Utah border (see Map 2).
The plan of operations indicates an initial mining rate of 100 tons per day and 10 to 12 employees, expanding to 200 tons per day with 24 employees. The average salary of the miners would be $40,000 to $50,000.
The uranium ore would be hauled via John Brown Canyon Road, Colorado
Highways 141 and 90, Utah Highway 46, and U.S. Highway 191 to the White
Mesa Mill in Blanding, Utah. Estimated project life is 10 years (Bureau of Land
Management 2008).
In response to the drop in uranium prices in 2008, the company placed the
mine operation on standby effective November 21, 2008 as part of a “capital
preservation strategy” (Energy Fuels Inc. 2008).
The run-up in uranium prices over the period from 2004 through 2007 increased
the value of low-grade ore stockpiles left by earlier mining efforts.
In 2008, permits were issued for the removal of approximately 7,500 tons of lowgrade
ore from the October Mine, located about four miles due south of Gateway.
The mining plan calls for loading of the ore and hauling it to the White
Mesa Mill in Blanding, Utah (Bureau of Land Management 2008). The operation
would likely employ two or three employees for one month.
Several additional historical uranium mines with potentially minable resources
exist in the area surrounding the Whirlwind Mine. This area is known as the
Beaver Mesa Mining District. Historical mine production in the area included at
least 7 million pounds of uranium ore and 24 million pounds of vanadium ore.
Energy Fuels controls additional mining properties in the area through lease
agreements (Bureau of Land Management 2008). Another company, Blue Rock
Energy Corporation (Blue Rock), also had options on properties in the area, having
conducted sampling operations at the Cone Mountain property. The property
was recently released by Blue Rock, which had not met an option payment
due to market conditions (Blue Rock Resources Ltd. 2009).
Map 2: Gateway Area
Based on the presence in the Gateway area of uranium mines with additional
potentially minable uranium resources, recent uranium claim staking and mineral
exploration activity, the potential exists for increased local uranium mining
activity. The timing and levels of future employment and economic activity that
could be associated with such mining is difficult to estimate, as it is highly dependent
on uranium commodity prices, which have been volatile over the last
few years. Should the uranium price rebound to levels near $100/lb, there
would likely be increased employment and economic activity associated with
mining in the Gateway area.
In summary, the current economy of the Gateway area is primarily based on
tourism and outdoor recreation. Due to low uranium prices, local employment
and other economic activity associated with uranium exploration and mining is
very low at the present time. As such, at this time (early 2009), uranium mining
makes a much smaller contribution to the local economy.
Future activity in this economic sector will likely cycle up and down with uranium prices (see
the following section on boom-and-bust cycles in the Uravan Mineral Belt).
The outdoor recreation and tourism economy in the area is likely to continue to
grow as Gateway Canyons Resort expands and the number of visitors to the
area increases. Another factor to consider when comparing local impacts of
these two economic sectors is that most of the employees in the tourism and
outdoor recreation sector are likely to be local residents. These employees
will spend a greater portion of their incomes in the local economy than mining
employees who are more likely to be out-of-area residents. _
22
Gateway is located at the northern end of the Uravan Mineral Belt
(UMB), an arcuate zone of uranium-vanadium ore deposits within
the Morrison Formation. The UMB extends across the western
portions of Mesa, Montrose and San Miguel counties in Colorado, and
extends slightly into Grand and San Juan counties in Utah (see Map 3)
(Motica 1968).
Uranium and vanadium ores have been mined from the UMB since their first
discovery in 1898. The Belt has seen several boom-and-bust cycles.
From 1910 to 1923 the first boom occurred with ores in the UMB exploited primarily for
radium with a small amount of byproduct uranium and vanadium. In 1923,
high-grade uranium deposits were discovered in the Congo and this source supplanted
ores from the UMB.
The first bust occurred from 1923 to 1937, during which there was hardly any mineral production in the area (Motica 1968).
The second boom in the area began in 1937, based on increasing demand for
vanadium for use in steel production. Vanadium mining continued until 1944,
with some byproduct uranium extracted for use in the Manhattan project.
This was followed by a three-year bust period of very little mining activity in the area
after the end of World War II (Motica 1968).
A third boom started in 1948 with the onset of the Atomic Energy Commission
(AEC) domestic uranium procurement program. This boom ended essentially in
1962 when the AEC ended the program, but waning production continued
under the AEC “stretch-out” program until 1970.
With the partial release of market controls in the 1970s and a growing international
demand created by nuclear power expansion, prices increased dramatically,
reaching $50/lb in 1977.
This fourth boom came to an end after the incident at the Three Mile Island Nuclear Generating Station in Pennsylvania in March 1979. The price dropped very rapidly until 1983 and continued to decline throughout the remainder of the 1980s. Low prices then continued until
2003. During this period, uranium mining almost completely ceased in the
UMB and elsewhere in the region.
The fifth boom-and-bust cycle began in 2004 when the price of uranium started
moving up yet again, peaking at about $136 in June 2007. This most recent uranium
price run-up resulted in a huge increase in uranium exploration activity in
the UMB and adjacent prospective areas in Colorado and Utah. Many thousands
of new mining claims were staked in Colorado from 2004 through 2007,
many of them in the UMB (see Map 3). Several mines were permitted and min ing re-started at some properties. Also during this period, a new uranium mill was proposed for the Paradox Valley (see Map 3) and the permitting process initiated. The price of uranium has since plunged again to about $50/lb in early February 2009.
This has initiated a new bust with properties closing down, workers furloughed, exploration programs slowing down and mines going on standby (Energy Fuels Inc. 2008; Jaffe 2008; Blue Rock Resources Ltd. 2009).
In light of the multiple boom-and-bust cycles that have occurred in the UMB
over the last hundred or so years and given the historical and continuing volatility
of uranium prices, it seems highly likely that the area will see similar cycles
in the future.
Price increases will most likely be accompanied by claim-staking
rushes, increased exploration activities and increased mining activities. A period
of sustained high uranium prices could also result in the permitting and opening of new uranium
milling operations in or near the UMB.
With price decreases, exploration programs will wane
and mines will shut down. _
Please review the whole study: http://www.sonoraninstitute.org/
