Nuclear

Uranium Exploration in the Post-Fukushima Era

Issue 1 and Volume 5.

The nuclear incident in Japan might slow, but will not stop, attempts to find and develop uranium deposits in the U.S.

By Sebastian Thaler, Freelance Writer

The tsunami and earthquake that hit Japan on March 11, 2011 permanently disabled the Fukushima Daiichi nuclear power plant. According to some media pundits in the days and weeks following the disaster, the worldwide nuclear industry was fated to be another victim of the incident. Although the final effects of Fukushima on the development of new nuclear facilities are yet to be seen, it is now thought that a diminishing of global investment in exploration has started—a development that could produce a worldwide shortage in supplies of uranium for currently operating nuclear facilities. In spite of this, several uranium exploration campaigns are ongoing within the US.

U.S. uranium exploration is now being conducted by many companies and joint venture projects, frequently involving geographical regions that were first mined from the 1950s to 1980s. Historically, the majority of U.S. production has been in Wyoming and New Mexico with Arizona, Utah, Colorado and Texas also contributing to the totals. The U.S. ranks ninth in the world for identified uranium resources with 207,000 tons of uranium; in 2010, U.S. uranium production rose by 14 percent.

In Texas, various companies are in a range of stages of uranium exploration, production and restoration. For example, Uranium Energy Corp. (UEC), which is based in Corpus Christi, Texas, has operations ongoing in five South Texas counties, and has been quite active in the period leading up to and following the incident in Japan. In November 2010, UEC began drilling at its Salvo Project in Bee County. The goal of this program was to verify and expand on the historic resource by drilling new areas of mineralization. Excellent early phase exploration drilling results were reported the following month. Also in November, UEC initiated uranium production using in-situ recovery (ISR) methods at its Palangana Project—the first new ISR uranium mine in the U.S. in half a decade.

The following month, the company commenced operations at its Hobson Processing Facility, processing the initial shipment of uranium-loaded resins from Palangana. In April 2011, following an independent technical evaluation, the Salvo Project was reported to contain approximately 2.8 million pounds of U3O8. Nor have the events of last March slowed UEC down; in May 2011, the company announced that it has acquired the Anderson Property in Yavapai County, Ariz., which is comprised of 289 contiguous, unpatented lode mining and placer claims covering 5,785 acres. The company’s announcement in June 2011 that it had secured a three-year contract to deliver 300,000 pounds of uranium—a contract that went into effect in August 2011—is more evidence for the continuing viability of the uranium market and the need for production.

Uranium Energy Corp. has operations ongoing in five South Texas counties. Photo courtesy of Uranium Energy Corp.

Additionally, UEC recently announced plans to acquire approximately 740,000 acres in the Coronel Oviedo area of Paraguay for a uranium exploration campaign.

Regarding the company’s ongoing initiatives, Amir Adnani, UEC’s chief executive officer, said “Even though the unfortunate incident in Japan has severely impacted the uranium market in general, our mining campaign continues at full force. As evidenced by the fact that we have recently begun extracting deposits from our properties in South Texas, our business is solid and we believe there is a promising future for this industry in general and our initiatives in particular.”

A range of other exploration and mining projects are ongoing. These include:

  • Australian-American Mining Corp. Ltd. of West Perth, Australia completed in April 2011 its acquisition of Lone Star LLC, in a joint venture agreement involving the acquisition, exploration of a set of uranium properties across the state. The major project of the venture, the North Trend project, is reported by the company to have significant potential.
  • Titan Uranium Inc., headquartered in Vancouver, BC, has completed a pre-feasibility study at its Sheep Mountain Uranium Project in Wyoming, which has been estimated to contain 13.8 million tons of U3O8. The company’s goal is to discover uranium deposits by surveying more than one million acres of land in Utah and Wyoming as well as in Canada.
  • Mesa Exploration Corp., also headquartered in Vancouver, is developing its Lisbon Valley Project in the Lisbon Valley Mining District in Utah. Mesa is investigating the possibility that half of the district has remained buried and undiscovered on the down-faulted, eastern flank of the Lisbon Valley anticline. Meanwhile, the company’s Moonshine Springs project, located in Mohave County, Ariz., consist of 1,770 acres. The project is currently permitted for drilling; previously, Mesa drilled two exploration holes and plans step-out and reconnaissance drilling programs.
  • Cameco Resources Inc., the US subsidiary of Saskatoon-based Cameco, runs the Smith Ranch-Highland mine in eastern Wyoming’s Powder River basin and the Crow Butte mine in Nebraska; the company is predicting an increase in production levels from these mines and adjacent properties to 1,770 tons by 2012. Separate uranium exploration projects are currently being conducted by Uranium Resources Inc. of Lewisville, Texas; Uranium One of Toronto and Johannesburg; and Uranerz of Casper, Wyo.

    The Hobson Processing Plant is an in-situ recovery (ISR) uranium processing plant, located about 100 miles northwest of Corpus Christi. Photo courtesy of Uranium Energy Corp.

    It should be noted that some initiatives involving uranium exploration are encountering a measure of turbulence. For example, the Obama administration has drafted a proposal that could prohibit new mining claims for 20 years on approximately 4,000 square kilometers near the Grand Canyon; in April 2011, several environmental groups sent Interior Secretary Ken Salazar a letter urging protection for the Canyon. For its part, the mining industry is opposing this Canyon proposal, claiming that the U.S. should promote domestic uranium mining as a method to achieve energy independence. Denison Mines Corp. of Toronto is already extracting uranium near the Canyon and hopes to expand its operations.

    Additionally, in May 2011, the group Eastern Navajo Dine Against Uranium Mining filed a petition that sought to overturn a Nuclear Regulatory Commission decision to grant a mining license to Hydro Resources Inc., which has drawn up plans to develop claims near two Navajo communities in New Mexico. The state’s Mining and Minerals Division is reviewing five pending uranium exploration permits and two pending mining permits; another three exploration permits have been approved in recent years. John Bemis, secretary of New Mexico’s Energy, Minerals and Natural Resources Department, has described interest in the state’s uranium deposits as “huge.”

    As these details show, uranium exploration in the U.S. is a still viable enterprise even as it faces a partial slowdown due to the events in Japan. This insight is motivated not only by the recent successes witnessed by Uranium Energy Corp. and others, but by the fact that the Obama administration, a mere three days after the disaster, reiterated its support of a new generation of nuclear power plants as part of the President’s “clean energy” agenda. As nuclear power remains a compelling energy option, it is fair to speculate that such exploration will continue.

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