U.S.Report Nebraska’s first uranium operation gains approval

It has taken longer than expected, but Ferret Exploration Co. of Nebraska was recently issued a permit by the Nebraska Department of Environmental Control allowing it to bring on stream the state’s first operating uranium mine. Imperial Metals (TSE), which holds a 18.71% beneficial interest in the Crow Butte project through U.S. affiliates, said the permit is the final document of a lengthy permitting process that began in 1987.

The companies involved in the project successfully overcame legal roadblocks thrown up by groups opposed to their plans to produce uranium using the in-situ mining process.

Dennis Grams of Nebraska’s Department of Environmental Control issued a statement to confirm that the project had passed the state’s environmental scrutiny.

“After careful consideration of the proposed project, the letters the department has received, and testimony taken at public hearings, I have determined that the project can be done in an environmentally responsible manner and within the regulatory controls of the department.”

The permits allow operating company Ferret Exploration to mine from an area of about 2,500 acres using the in situ process, a mining method developed several decades ago by borrowing technology used by the oil and gas industry.

The process involves injecting a solution of water, oxygen, and sodium bicarbonate into wells 400- to 800-ft. deep. The solution dissolves the uranium which is pumped to surface through recovery wells. The uranium is then extracted from the recovered solution by ion exchange.

Pierre Lebel, president of Imperial Metals, told The Northern Miner that a pilot plant has operated on the property successfully for about three years without any technical or environmental problems.

In addition to the obvious benefits of lower operating and capital costs (not to mention increased safety over traditional methods), Lebel said in situ mining does not result in any surface disturbance or tailings impoundments.

He also noted there is no demand on groundwater because of constant fluid re-circulation which is completely confined to the uranium- bearing formation.

With the deposit already well- defined, Lebel said a 2,500-gallon- per-minute commercial plant was purchased some time ago and delivered to the site.

Construction of the commercial plant has already started with the pouring of foundations, and construction of the initial wellfield is to start immediately so that commercial production can begin as planned in 1991.

The plant is capable of producing one million pounds of uranium oxide per year and a mine life of at least 10 years is expected. Capital costs, including wellfield development, are expected to total a modest US$8.7 million.

With the pilot plant operating smoothly for more than three years, Imperial expects that the operating company will have no trouble producing uranium at a cash cost equal to or below current spot prices.

Although the spot price is still considered to be depressed, most uranium is sold under long-term contracts at prices that are substantially higher than the spot price.

In recent years, the variance has been such that a number of producers are opting to suspend production and supply contract sales through spot market purchases. At the same time, the low prices have forced some higher cost producers to suspend operations pending improved prices.

Analysts are already expressing concern that these production cuts may be going too deep for the industry’s long-term health, particularly as demand is expected to remain at healthy levels for the next decade.

Over the short term, Lebel said he expects Crow Butte will be able to compete on a favorable basis with other domestic producers because its production costs should rank among the lowest in the U.S.

Crew Schmitt, marketing director, said he is involved in discussions with a number of U.S. utilities for possible long-term domestic contracts involving the sale of production from Crow Butte. And he said the companies involved in the project were optimistic of a future upswing in the market based on fundamentals of supply and demand.