Mining revival: a uranium boom for a wary West

Seven mines are open so far in five Western states, including one in Utah.

Perched on a towering cliff above the town of Moab, the former mansion of a uranium prospector looks down on 130 acres of hazardous uranium waste piled on the banks of the Colorado River. Long after the industry went bust in the early 1990s, uranium still casts similar silhouettes of fortune and fallout across the mountains and mesas of the West.

Now, after two decades of dormancy, the uranium industry is roaring back to life thanks to a 14-fold spike in prices since 2002.

Canadian firms are snatching up old US mines with names like Pandora, Cyclone, and Whirlwind. Seven mines are open so far in five Western states, including one in Utah. Locals are scouring tattered topographical maps and driving across the wilderness; they staked 32,000 claims last year alone. And former geologists and miners are now sought-after consultants.

This boom, however, returns to a more wary West, one more reliant on tourism and less innocent about the potential pitfalls of uranium. Regulations are more stringent now, but activists say history argues against complacency.

"There are concerns because in the past the regulators let the industry get away with murder," says Sarah Fields, chair of the nuclear waste committee of the Sierra Club's Glen Canyon group in southeastern Utah. "The efforts should be put in cleaning up the old sites."

Origins of uranium boom

The nuclear arms race spurred the first uranium boom in the 1950s. Nuclear energy kept it going through the '70s. But by the early '90s, new nuclear plant construction fizzled in the US and uranium recycled from decommissioned Soviet warheads flooded the market. Prices fell so low that the industry only hung on in places like Canada, where the ore was high grade.

As late as 2002, the spot price for uranium was just below $10 per pound; now it's $138.

Supply is down due to problems at a Canadian mine and the drying up of the Russian legacy material. Meanwhile, demand is rising – 31 nuclear plants are under construction, mostly in Russia, India, and China. Interest in nuclear energy has rekindled in developed nations, too, as fossil fuels fall further from grace.

The uranium prices are helping to open up mines. The Pandora mine in Utah, less than 40 miles south of Moab, reopened in 2006. Two mines in Colorado and Nebraska also reopened in 2006 after being closed for years. Texas saw two new mines open in 2004.

The increased demand is also luring back prospectors, the dreamers and schemers who first put Moab on the map long before the first mountain biker circuited the Slickrock Trail.

"They are draping all over the countertops looking at different maps," says Susan Shoemaker, who works part time at the visitor's center. "You can tell they are looking for something different than mountain biking trails."

Anyone can stake a mineral rights claim on public lands and pay $125 a year to hold it. Congress may soon revise this system, dating back to 1872, to require payment of royalties to the government.

Stakeholders are hoping to collect royalties or get bought out by big companies. This month, Trigon Uranium Corp of British Columbia struck a royalty agreement with the owners of 73 mining claims in Utah. Other Canadian firms like Denison Mines of Toronto and SXR Uranium One of Vancouver are buying out US mining companies and reopening their long-shuttered facilities.

But it's a slow process to bring the industry back from zero.

"If it's a three-volume saga, we're now beginning Volume Two," says Sidney Himmel, CEO of Trigon. Companies are starting to move beyond the paperwork into looking at reactivating the old plants. "You go there and guess what, they are all stuck together with rust," he adds. Environmental and worker mishaps are rare now, says Mr. Himmel, and companies design for contingencies.

"The vast majority of the time ... things work out fine," he says. "How serious is the mining industry about these issues? I'd say more serious than ever."

At Denison's Pandora mine, pastel-colored electronics from the 1960s sit on dusty shelves. Such equipment, while old, remains valuable. Because of a shortage, Denison is building its own, less sophisticated, gamma probes.

Experienced people are also in short supply. "When an industry goes stale and stagnant for a period of time, people disappear," says Peter Farmer, CEO of Denison. "We've got two or three of these old pros, and we're training a bunch of the young people. But that takes time."

One of the old pros is Pandora's superintendent, Jim Fisher, who has been mining since 1966. "It's an exciting time for the entire area," he says. "A lot of people are being put back to work, and it's taking them out of lower paying jobs."

Some of the older locals who once worked the mines have mixed memories, however. J.R. Richardson of Moab mined uranium from 1956 to 1966, when his health began to decline. He recalls being regularly exposed to 80 parts per million of radon gas while underground, far above the legal limit of 1 ppm.

"The boss always knew a week in advance when the inspectors would come and would clean everything out," says Mr. Richardson, who adds that the industry has cleaned up a lot since then.

Mr. Fisher at Pandora notes the many safety features of modern mining operations, including ventilation fans, long drills that intermittently spray water to control dust, and careful record keeping of each miner's radiation exposure over time in accordance with federal rules. Inspectors from the Mining Safety and Health Administration come by once a quarter, unannounced, to check the records and conduct interviews.

Environmental concerns

The laws have also improved to safeguard the environment. Mine operators must post a bond to pay for cleanups – though bonds used in the past haven't always covered costs.

That's what happened with the former uranium mill in Moab. The company went belly up, but the bond was not nearly enough to deal with the mountain of riverside tailings. The pile, which sits in a floodplain and wasn't properly contained before the Department of Energy intervened, leaked and contaminated the river with uranium and ammonia. Meanwhile, plans to move the pile to a more stable location may drag out to as late as 2028 depending on funding.

While much cleanup work has been completed, dozens of old mines and mills have yet to been fully reclaimed, or adequately cleaned up, and several have been designated federal Superfund cleanup sites, according the World Information Service on Energy website.

The Navajo nation outlawed uranium production on its lands in 2005. The tribe says it suffered a higher rate of disease than in the general population after living in homes built with waste rock and tailings salvaged from unreclaimed mines and mills.

Environmentalists also worry about the impact of prospectors crisscrossing fragile lands. "There's some fantastic, beautiful landscapes down here and they have better uses than new roads for speculative mining," says Liz Thomas, field attorney with the Southern Utah Wilderness Alliance in Moab.