Twenty-six Wyoming employees of Uranium One Inc. will be out of work at the end of June, after the Toronto-based company decided to stop drilling additional wells because of low uranium prices.
Sixteen of the laid-off employees worked at the Willow Creek Mine, which straddles the Campbell and Johnson county border, primarily in construction of wells, said Donna Wichers, a senior vice president of Americas for Uranium One. They worked in drilling and well casing.
Ten of the laid-off employees worked in Casper in support roles to the well field construction, such as geologists, finance and office staff, she said.
Seventy-six employees will remain working for the company in Wyoming, Wichers said. Employees who remain are at the mine site and in Casper, helping with uranium production, which is ongoing for previously drilled well fields.
The layoff is the company’s first for the Willow Creek site, which began uranium production in December 2010. No future layoffs are expected, Wichers said.
With the layoffs, the company will stop developing new well fields and focus on production in current well fields, Wichers said.
A well field is an area into which several hundred wells are drilled into the ground to target a specific volume of uranium. Uranium is drawn from the ground through the wells. It takes about three years to mine out uranium in a well field, Wichers said.
“The more well fields we have operating, of course, the more pounds we produce,” Wichers said.
The company has two well fields that are producing uranium and a third field that is about half-finished, Wichers said.
“The price is so low that we have to sell our uranium at these low prices, and that’s not good,” Wichers said. “We need higher prices in order to make a profit that we need to develop new well fields.”
According to Ux Consulting Co., which provides data and publications on the global nuclear fuel market, the price of uranium compound U308, commonly known as yellowcake, has slumped in recent months.
For the week of June 10, the compound traded at $39.75 a pound on the spot market. That's down from April 23, when it traded at $52 a pound.
Despite the layoffs, the company said in a prepared statement that it plans to continue pursuing permits for other Wyoming properties, including its Ludeman mine in Converse County. Construction on Moore Ranch, another company property in Campbell County, is on hold until prices rebound.
The low prices have dampened the market, but several Wyoming companies this year have started or will start production at new projects. Cameco Resources began operations at its North Butte mine in Campbell County in May, and Ur-Energy expects to start production at its Lost Creek uranium facility soon.
Uranium One will wait for the uranium price to increase before resuming drilling new well fields, Wichers said.
Crews at the mine site will finish the well field they have been working on. About half of the well field has been “turned on,” Wichers said, and is producing. In that well field all wells have been drilled, she said.
Crews are building a header house for that field, which is a place where pipes from different wells feed in. The company can monitor pipeline pressure and flow at a header house. It is the last stop in the well field before pipelines transport uranium to a central processing plant, Wichers said.
Wichers said she traveled to the Pumpkin Buttes-area mine to tell the employees of the layoffs Thursday.
The laid-off employees will get health insurance for two months, Wichers said. “They’ll work for the remaining two weeks, and they’ll get a severance package that is based on their years of tenure,” she said.
Star-Tribune energy reporter Adam Voge contributed to this report.