Situated 620 km north of Saskatoon, McArthur River is the richest uranium mine in the world. It is held 70% by operator Cameco and 30% by France’s Cogema Resources.
The flooding began on April 6: when miners were excavating a development drift at the 510 level, in the uppermost portion of the mine, a 10-metre-long portion of the roof suddenly caved in. None of the mine’s 275 workers was injured, since personnel were evacuated as soon as the first cracks appeared.
Canada’s nuclear regulator, the Ottawa-based Canadian Nuclear Safety Commission, has sent monitors to the mine, and provincial regulators have also been on site.
By mid-April, water was flowing into the development drift at the rate of about 900 cubic metres per hour, while the total pumping capacity was 1,000 cubic metres per hour. (On a daily basis, that’s the equivalent of 8.6 Olympic-size swimming pools.)
The flooding has affected the mine’s two key levels, 530 and 640 metres below surface. The 530 level is where the raise boring originates, and the 640 is the collection level, which receives the falling material produced during raise boring.
When Cameco mines ore at McArthur River, workers usually limit water inflow by freezing the area around the mining blocks. This is accomplished by circulating brine through the surrounding rock in pipes that originate on the 530 level. However, freezing had not been employed where the flooding occurred.
Levels 530 and 640 are accessible by three shafts from surface. The main Pollock shaft is used to move personnel, equipment and waste rock and to pump air into the mine, while shafts 2 and 3 are used to ventilate air out of the mine. Pollock and shaft 2 extend to level 640, while shaft 3 extends only to level 530.
While most of the pumping capacity is on the 530 level, the critical area of the mine is on the 640 level, which contains ore-storage bins, and three chambers that contain a semi-autogenous grinding (SAG) mill, thickeners, and a pump which sends ore slurry to surface. (The highly automated milling and thickening are carried out underground in order to limit workers’ exposure to radon gas and radioactive dust.)
Cameco reports that water is not getting into the raise bores. However, level 640 is partly under water, and the mill, which occupies one of the deepest levels, is completely submerged.
The water-storage capacity in the mine is minimal, and much depends on Cameco’s ability to preserve the 120 cubic metres per hour of pumping capacity on the 640 level.
“I emphasize that the situation remains serious,” says Cameco President Gerald Grandey. “There’s water in many, many parts of the mine, and it’s being directed to lots of different pumps. We’re going to be in this delicate balance for quite a while, watching the water inflow and outflow balance and trying to make sure we’re ahead of it.”
Cameco is searching for ways to increase pumping capacity by sourcing new pumps and is investigating areas of the mine where these could be installed. The company has already mobilized a crew to shaft 3 to see if pumps can be placed there.
The source of the water is the thick and porous Athabasca sandstone that overlies the granitic basement rocks within which most of the mine is developed.
Cameco is monitoring the water levels in the sandstone, which Grandey says have been “predictable and steady and on a slow decline.” He adds: “We don’t see any change in activity in the aquifer to suggest we would have a surge.”
The water inflow problem will be largely solved by building a concrete barrier in the development tunnel at the 510 level. However, the company says it has made only “slow progress” building the barrier and that, while it is now in place, it likely won’t be cured until late April. Once the concrete cures, workers can begin to control the water inflow, though another 2-3 months will be required to reinforce and seal the area.
Pumping out the bottom of the mine and refurbishing the SAG mill could take until October, assuming Cameco does not lose all of the 640 level to flooding. “It’ll take some time to go through the motors and the electronics and make sure it’s all running properly,” says Grandey.
When asked how long it would take to restart mining if level 640 or 530 were entirely flooded, Grandey said the company does not have good estimates, though he did point out that the cost of lost equipment would likely be small. He said any writing-down of assets would likely be related to equipment that could become flooded if water levels rise in the 640 level.
Cameco believes it will be able to regain access to the flooded area, where there are still some 35-40 million lbs. of uranium oxide ore.
Meanwhile at surface, water-treatment capacity has been substantially increased: in mid-April, Cameco was treating 1,100 cubic metres of water per hour. As a precaution, an additional water-settling pond is being built at surface and should be available by early May.
Cameco says it will lose $4-5 million off its bottom line for every month of lost production.
Cogema’s Paris-listed parent company
When asked if Cameco would declare force majeure on its deliveries, Grandey said only that the company is consulting with its lawyers. He did say Cameco has not collected on any insurance claims and that a “combination of inventory, other sources, and purchases that we’ve got under contract . . . gives us confidence we will be able to make deliveries.”
Overall, he said, Cameco’s operating cash flow is expected to “remain relatively unaffected,” unless the company decides to increase its product purchases.
Cameco’s stock was hit hard by news of the flooding, dropping from $38 to $33.70 at presstime, touching a 6-month low of $29 on April 14.
On the other hand, uranium spot prices were unmoved by the news, holding steady at US$10.10 per lb. U3O8.
At full capacity, McArthur River can produce 18.7 million lbs. U3O8 per year from a reserve base of 473 million lbs. U3O8 contained in 930,000 tonnes grading 23% U3O8 — a grade more than 100 times that of most uranium mines.
McArthur River ore is trucked 80 km southwest to Cameco’s Key Lake operation for processing. There, the rich uranium ore is diluted with lower-grade material.
McArthur River has been in production since December 1999, and last year accounted for 80% of Cameco’s uranium output.
Production of uranium generated $96 million of Cameco’s $150 million in gross profits from mining and conversion in 2002.
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