Uranium price slips, curtailing local plans

Energy Fuels Inc., watching the price of uranium slip over recent months, is looking more to its assets in Arizona to meet a production plan of 1 million or more pounds of uranium oxide from its mill in Blanding, Utah.

That means plans to restart the Whirlwind Mine in Mesa County and other properties will be on standby, Energy Fuels spokesman Curtis Moore said.

Energy Fuels, however, still is working to regain its radioactive materials-handling permit for its proposed Pinyon Ridge uranium mill near Naturita, Moore said. Testimony in an administrative hearing on the permit is scheduled to begin in two weeks in Nucla.

At the heart of the decision is a slump in uranium prices, Moore said.

Uranium was selling on the spot market for more than $70 a pound in January 2011, but on Tuesday was fetching $43.50 a pound as demand has slipped and supply grown, Moore said.

“There’s a plentiful supply and a big reason is that Japan is not restarting its reactors as quickly as was thought,” Moore said.

Japanese officials still are studying how to recover from the Fukushima disaster in March 2011, when an earthquake-generated tsunami damaged three nuclear reactors.

“They’re going through a whole regulatory process to make sure their regulating agencies are truly independent,” Moore said.

The deliberate pace of the Japanese in restarting their nuclear plants is half of the equation that is resulting in lower prices for uranium, Moore said,

In the meantime, Energy Fuels is seeing “some government selling of uranium right now,” but noted he couldn’t say which governments were selling off parts of their stockpiles.

“All that being said, most people are really confident that the price of uranium will go up in the mid-term” or in about a year.

Energy Fuels has fashioned is business plan around the 2013 end of the Megatons to Megawatts treaty with Russia. Under that agreement, highly enriched uranium once owned by the Soviet Union for use in intercontinental ballistic missiles is being used to power nuclear-generating stations.

Once that treaty expires, Energy Fuels hopes to see demand for domestic uranium move back up.

As it pursues regulatory approvals and financing for a $50 million uranium mill near Naturita, Energy Fuels said in a statement that it expects to produce between 1 million and 1.1 million pounds of uranium oxide, or yellowcake, from the White Mesa Mill in Blanding.

The mill also is expected to produce between 2 million and 2.2 million pounds of vanadium.

Energy Fuels will continue mining at its Arizona 1 property during the first three quarters of fiscal 2013 and commence production at another property, Pinenut, in the second quarter of the year.

Energy Fuels, the nation’s largest producer of conventional uranium and vanadium, has term contracts with several utilities that will allow the company to sell yellowcake at “a substantial premium to the current spot price,” Stephen Antony, Energy Fuels president and CEO, said in a statement. “Although our Colorado Plateau properties will be placed on standby for the time being, we will maintain these assets with the ability to resume production in a timely fashion upon commodity prices improving.”

Energy Fuels in the meantime will continue development of the Canyon mine in Arizona and is working on permitting for the Sheep Mountain project in Wyoming, Antony said.


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