ROLLING HILLS - At Cameco Inc.'s Smith Ranch-Highland in-situ leach uranium mine, a typical barrel holds about 883 pounds of "yellowcake," which is 83 percent U308, the foundation of nuclear fuel that has sparked a mining rush in Wyoming.

Price-wise, it's worth about $64 per pound on the spot market, and about $45 on contract - the equivalent of about 450 barrels of oil.

On Wednesday, Scott Melbye walked up to a drum of yellowcake, thumped it with a knuckle and said, "I love this stuff. This is what feeds my kids."

Melbye, president of Cameco's marketing division, helped host an entourage of visitors at the United State's largest operating uranium mine on Wednesday, which included U.S. Nuclear Regulatory Commission Chairman Dale Klein and U.S. Sen. John Barrasso, R-Wyo.

"The worldwide demand for nuclear power is strong, so the demand for uranium is strong," Klein said before the field tour. "By 2009, we expect there will be applications for 30 new (nuclear power) plants in the U.S."

The decommissioning of Cold War-era nuclear warheads in the 1990s flooded the nuclear power industry with new fuel and drove market prices below $10 per pound, erasing a uranium mining industry in Wyoming before it ever reached its full potential.

But incessantly growing world demand for energy has buoyed prices well to $64 per pound well above the cost to mine it, especially through a method known as in-situ leach mining. It's a relatively low impact, low capital operation that involves flushing chemicals through a uranium ore-bearing formation, then separating the material at the surface.

Dozens of potential uranium players have notified the Nuclear Regulatory Commission of their intent to launch new in-situ leach operations throughout the West. Already, the agency has received four applications for new projects in Wyoming. Klein said the agency expects to receive 13 more applications for new in-situ leach uranium mines in Wyoming over the next three years, further boosting Wyoming's current role as the nation's No. 1 supplier of domestic uranium fuel.

"The agency is the busiest we've ever been in our history," Klein said. "I think Wyoming, obviously, is a key player in the production of uranium."

Cameco recently paid $1 million in penalties to the Wyoming Department of Environmental Quality because of violations related to years-long delays in the restoration of groundwater and a seriously inadequate bond to cover restoration. As the nation's largest uranium producer, and largest in-situ leach uranium mine, it was a major public relations set-back for an industry that hopes to launch dozens of new in-situ mines across the West.

It also raised questions about whether state and federal regulatory agencies are prepared for the new rush on domestic uranium resources.

Cameco officials, and regulators alike, insist the violations at the Smith-Highland Ranch uranium mine did not involve any "excursions" or threats to the environment and human health. It was mostly a matter of documentation and delayed restoration of groundwater.

Now uranium miners and regulators alike are eager to show they are committed to mining the nation's uranium resources safely and in an environmentally sound manner.

"Twenty percent of electrical power in the U.S. is nuclear," Barrasso said. "And we're going to need more nuclear power going forward."

Barrasso said he toured the Smith Ranch-Highland mine with Klein in January, and said he has sought assurances that regulators and the industry can show in-situ leach uranium mining is safe and environmentally sound.

"As the No. 1 producer in the country, I want to make sure we're doing it right and we're using Wyoming resources," Barrasso said.

Klein said that in order to gain the public's trust, his agency - and the uranium industry - must communicate better the safety checks and balances that are in place.

"I think the record speaks soundly that it can be done safely and that it has been done safely," Klein said.

Contact Dustin Bleizeffer at (307) 577-6069 or dustin.bleizeffer@trib.com.

Last we knew: Smith Ranch-Highland, the largest in-situ leach uranium mine in the nation, paid $1 million in penalties to the Wyoming Department of Environmental Quality in July.

The latest: The Nuclear Regulatory Commission chairman and other dignitaries visited the mine on Wednesday to ensure that regulators and the industry are prepared to handle dozens of new in-situ uranium mines being proposed in Wyoming and other western states.

What's next: The NRC is preparing a Generic Environmental Impact Statement for in-situ leach uranium mining.

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