Uranium pact ensures access to US

Uranium producers in the U.S. have reached agreement-in-principle with Washington on establishment of an acquisition fund for domestic uranium and the removal of any embargo on the use of non-U.S. uranium within that country, NUKEM reports.

The $1.75 billion fund would be used to purchase only uranium mined in the U.S. and provide for mill tailings reclamation. About $750 million would be used for the uranium purchases and $1 billion for the tailings cleanup.

The agreement, which will involve the establishment of a new U.S. government agency to be known as Enrichment Corp., would be incorporated into the free trade treaty being negotiated between Canada and the U.S.

The U.S. market is currently open to foreign uranium producers. The new agreement would see the withdrawal of a lawsuit by U.S. producers against the federal government’s department of energy, and presumably would see the end of legislation first proposed several years ago which seeks to impose penalties on U.S. utilities that use more than 35% of imported uranium. Accor ding to Gordon Leaist, manager marketing and sales with uranium-producer Saskatchewan Mining Development in Saskatoon, Sask., the agreement would mean continued unrestricted access to the U.S. The provincially-controlled company ships about 40% of its uranium exports to the U.S. Fund contributors

Utilities in the U.S. with nuclear power plants would be required to contribute $1 billion to the fund, with the remainder coming from Enrichment Corp. ($450 million) and U.S. producers ($300 million). The utility contributions would occur annually over a 5-6-year period and would be $72 per kg of uranium contained in fuel assemblies loaded into reactors from 1988 to 1993. Payment would begin in 1989 and continue until the $1 billion total was reached.

Enrichment Corp. would contribute $90 million per year for five years starting Dec 15, 1989. U.S. producers would contribute $2 million per site plus $1 per dry ton of tailings from which uranium was processed prior to the effective date of the legislation.

Payments for the purchase of U.S.-mined-and-milled uranium would total a minimum of $750 million. Should the full $1 billion allotted for tailings reclamation not be needed, any remaining funds would be used for additional U.S. uranium purchases. Purchase schedule

The proposed purchase schedule requires that, in 1989, monthly purchases from producers with a net worth of less than $200 million total $100 million and that an additional $60 million be purchased from all producers during the last quarter of the year.

From 1990 on, purchases would be made without allocating a portion for the “small” producers. The sum of monthly purchases would total $150 million in 1990 and decline to $120 million in 1993. Payments beyond this point would be dependent upon the remaining available funds and would not be greater than $100 million in any year.

Canada produces more than one- third of the world’s annual uranium output; the mineral is mined in two provinces, Saskatchewan and Ontario. About 85% of Canada’s uranium production is exported.