Several of Wyoming’s known uranium reserves have landed in optimistic new hands.
Uranium Energy Corp, a mining and exploration company based in Corpus Christi, Texas, announced on Dec. 20 that it had acquired Uranium One Americas, a subsidiary of Russian-owned Uranium One.
Included in the $112 million deal are seven not-yet-developed projects in the Powder River Basin, five in the Great Divide Basin and numerous potential sites for future development. The company already owns the Reno Creek mining project in northeastern Wyoming.
“It’s a really exciting development, not just for our company, but I think for Wyoming as well,” said Scott Melbye, executive vice president of Uranium Energy Corp. “I couldn’t be a bigger believer that the U.S. uranium industry — of which Wyoming can certainly be the leader in that regard — certainly can be producing a lot more than we have.”
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In the 1960s and ‘70s, Wyoming housed a bustling uranium industry that employed 5,000 workers. Then high-profile accidents at Three Mile Island in 1979 and Fukushima in 2011 stalled growth and flooded the global market, causing prices to tumble and most U.S. mines to shutter.
Today, most of the uranium used to power the country’s nuclear reactors is imported from Canada, Australia, Russia and Kazakhstan; in Wyoming, there are only about 115 uranium workers left. The domestic uranium industry now sits largely dormant as producers wait for those low market prices to climb back up.
Melbye believes the industry’s fortunes may be about to shift.
“In the coming five years, I think we’re going to see uranium prices at that level that supports production, and you’re going to see a lot of employment and development in the sector,” he said.
For most U.S. producers, competitive pricing begins around $50 per pound. The cost of uranium has remained below that benchmark since 2014, and sank to $33.27 last year. But according to Melbye, global demand is finally recovering to pre-Fukushima levels, and prices are likely to climb as demand continues to grow.
He expects uranium from close to a dozen more mines to be needed in the coming years, particularly if nuclear power continues to supply a significant share of many countries’ low-carbon electricity. And he hopes some of that additional uranium will come from the U.S.
“There is a limit to how long these American mining companies can kind of tread water and ramp back up, but I think we’re in a phase now where I’m confident that uranium prices will recover to that level that we need to get restarted,” Melbye said.
The process of permitting and constructing a uranium mine could take a decade, he said. But the Reno Creek project and three of Uranium Energy Corp’s newly acquired Powder River Basin projects are already fully permitted. Whenever market conditions become favorable again, Melbye expects it to take between six months and two years for those permitted mines to start operating.
“That sounds like a long time,” he said. “But in the scheme of things, those are some of the earliest responders to any sort of price movements.”
Most of the projects are located on private land, meaning that royalties from any future mining would go to the landowner, while severance taxes would go to the state. There is currently no federal production tax for uranium. Industry hopes it’ll stay that way.