APPENDIXES APPENDIX 1 UNITED STATES ATOMIC ENERGY COMMISSION, URANIUM PRODUCTION IN THE UNITED STATES Remarks prepared by Jesse C. Johnson, Director, Division of Raw Materials, United States Atomic Energy Commission, for delivery before the fourth annual conference of the Atomic Industrial Forum, New York, N. Y., October 28, 1957 I am glad that uranium resources and production have become a part of the discussions at these conferences sponsored by the Atomic Industrial Forum. A study of the availability of nuclear fuels, and the economics of their production, is basic to the consideration of atomic power as a major source of industrial energy. These discussions should be particularly valuable to the uranium producers who are looking ahead to the industrial market and attempting to estimate the growth and size of that market. Even the reactor and the power experts differ on forecasts of atomic-power growth and uranium requirements so you can appreciate the position of the uranium producers who have a capital investment in mines and mills totaling nearly $1 billion. The United States Government market has been almost entirely responsible for the development of the uranium industry outside Russia and its satellites. This market was for military requirements for the common defense. Had it not been for these military requirements, which in turn were responsible for the raw-materials program carried out by the United States Atomic Energy Commission, there would be little basis for the broad atomic-power development now under way in this country, or the extensive atomic-power program of the United Kingdom, or the survey by Euratom for an even larger program. The limited known uranium resources of 10 years ago would not have justified these projects. The present position of atomic-power development is due to the efforts of the uranium prospector and miner, as well as to those of the scientist and nuclear engineer. The Atomic Energy Commission's uranium program, which was initiated less than 10 years ago, moved slowly at first and then rapidly gained momentum. Production greatly increased during the past 4 years but a major increase will come in the next 12 to 18 months with the completion and operation of a number of large Canadian and American uranium mining and milling projects. Freeworld production in 1957 is expected to be about 21,000 tons of UsOs and the estimate for 1959 is in excess of 40,000 tons with more than 30,000 tons coming from the United States and Canada. Ten years ago we were dependent upon the Belgian Congo for more than 90 percent of our uranium. Production in Canada and the United States was insignificant by today's standards and known ore reserves were equally meager. At that time the only possibility of large additional production from any known source was the recovery of uranium from South African gold tailings. Here the problem was to develop a process to recover economically less than 1 pound of uranium oxide per ton of material treated. Except for the South African gold ores, any major increase in uranium production had to come from new discoveries, unless we were prepared to pay $30 to $50 a pound for uranium from low-grade phosphate and shale deposits. Answers were found to the metallurgical problems involved in processing South African gold-ore tailings. Mill construction began early in 1951, making this our 287 first major new uranium production project. The South African gold-mining industry deserves great credit for the speed with which the large engineering and construction program was carried out and for the efficiency of the milling operations. South Africa now is producing approximately 6,000 tons of UзO per year. South African production was not enough. New sources of uranium had to be found and brought into production. Our instructions were to get as much uranium as possible from every available source, but production from the North Amercian Continent was particularly important for obvious strategic reasons. Consequently, the program of 1948 to stimulate exploration concentrated on the United States and Canada. There were no specific reasons for great optimism except that there was a vast mineral-bearing territory in which to search. Any chance for even a measure of success in a short time depended upon enthusiastic participation by hundreds, if not thousands, of prospectors, geologists, and mining organizations. These considerations led to the establishment of uranium-purchase programs in both the United States and Canada. The programs had to provide time for exploration and development and at least a 5-year production period. Also, there had to be an adequate reward in terms of potential profits for the discovery of important deposits. The initial programs fell somewhat short in meeting these objectives and were revised accordingly. We worked closely with the Canadian Government and received its full cooperation. Production figures speak for the success of these two nearly parallel programs. In my opinion, this cooperative program for discovery and development offers one of the finest examples of the effectiveness of private initiative at work in a free society. I think that this background is important to an understanding of our domestic uranium program and its problems, of our long-term overseas uranium commitments, and of our commitments to Canada. Now let me review our domestic program and some of the problems with which we are faced. In 1948 our known uranium ore reserves were estimated at about 1 million tons, averaging approximately 0.20 percent UзOs. The possibility of major additions to these limited reserves was matter of hope and could not be measured on the basis of specific evidence. The search for uranium-bearing carnotite ores in our Western States had extended over a period of nearly 40 years, first for uranium as a source of radium and then for vanadium which also is a constituent of carnotite. Except for a brief period in World War II, when vanadium was in great demand, the search had never been intensive or sustained. This record of prospecting and exploration, together with reports on the ore deposits that represented known reserves, was the basis for the design of our domestic uranium program. The objective was to get as much immediate production as possible and to provide practical incentives for widespread private exploration and development. Experience indicated that the sedimentary-type carnotite deposits generally would be small and scattered and that small milling operations would have to draw on large areas for ore supply. The best chance for really large production seemed to lie in finding vein-type pitchblende deposits which, in the past, had been the source of most of the world's uranium. One of the surprises of the past few years has been the size of our sedimentarytype deposits and the extent of the ore reserves developed in areas with no significant surface exposures. The Big Indian Wash district in Utah, and the Ambrosia Lake field of New Mexico are examples of major discoveries by drilling. The outcrops in the Gas Hills district, Wyoming, provided little indication of an important uranium area. Because of the widespread exposure by erosion of the sedimentary beds in which the uranium is found, it was expected that surface outcrops would give better indication of the size and extent of our uranium re sources. With the development of million- and multimillion-ton ore bodies, and the accumulation of geologic data, private drilling campaigns have expanded greatly and ore reserves have increased rapidly. We now estimate domestic ore reserves at about 70 million tons, averaging about 5 pounds of uranium oxide per ton. A year ago our reserves were 60 million tons, 2 years ago 25 million tons, 3 years ago, 10 million tons, and 4 years ago 5 million tons, Most of our ore reserves now are in deposits ranging from several hundred thousand to several million tons. Earlier most of our deposits were less than 100,000 tons. Small mining operations still provide a substantial part of our uranium production, but with the discovery of larger deposits the trend has been toward larger mining operations, both underground and open pit. With such a wide range in the size and type of operations, any average figure for mining cost would be of little value even if such a figure were available. In general, uranium mining has proved a profitable business for both small and large operators. Of course, some operations are marginal and many have failed. Uranium exploration, as is the case in the search for any mineral, involves a high degree of risk. Millions have been spent in drilling barren holes and in prospecting without results. However, persistence usually has paid off. As yet we have no large underground mines. The largest are in the Big Indian Wash district, Utah, where total production is about 2,000 tons of ore a day. The largest producers in this district have a daily output of from 300 to 600 tons. These mines are fairly well mechanized. A representative figure for mining cost would be about $11 per ton. This cost includes development, direct mining, depreciation on plant and equipment, local taxes, insurance, and other indirect costs, but does not include royalty or property acquisition costs. Direct mining constitutes about one-half of the total cost. In the Uravan district of Colorado, originally our main domestic ore source, production is about 1,700 tons of ore a day, but the largest producers will average no more than 70 tons. The output per man is low because of the limited opportunity to use mechanical equipment effectively. The ore deposits are irregular, with low angle dips, and are usually thin except for "rolls" which often carry the ore below the haulage levels. Development and mining costs are high, and in many cases up to 5 tons of waste must be handled for each ton of ore produced. Mining costs may average $20 a ton, but costs are different for each mine, and for different periods in the life of an individual property. Direct mining again is about one-half of total costs. The White Canyon-Monument Valley district of Utah is another of our more important areas of underground mining. This district has not yet reached full production, but experience to date indicates mining costs may average about $16 a ton. The largest domestic underground mines will be in the Ambrosia Lake district, New Mexico, where ore reserves are now estimated at about 30 million tons. This ore will be mined from shafts ranging from 350 to 1,000 feet or more in depth. For most of the district the ore ranges from 5 to 24 feet in thickness, although drill holes have shown thicknesses of as much as 80 feet. Present plans call for mine production of about 8,000 tons a day, but the individual operating units will have production rates of only 500 to 1,000 tons. Some of the larger companies may have several such operating units. These mines still are in the development stage and, as certain mining problems have not yet been fully evaluated, good cost estimates are not available. Open-pit uranium operations, as in the case of underground mining, show widely different costs, depending upon the stripping ratio, the topography, and the size of the deposits. Again some operations are marginal and some are highly profit. able. The lowest costs probably are obtained at some of the small, shallow mines. In some cases the operator has practically no capital investment; stripping, loading, and trucking are all contracted to earth-moving concerns. Most ore now produced from open-pit operations may invove a cost of about $8 a ton. However, in the Gas Hills district, Wyoming, where mining will be mainly open pit, large operations are just getting underway. As in the case of mining operations, it will not be possible to present more than a broad generalization of the treatment costs for the uranium mills of the western United States. There is a wide diversity of uranium recovery circuits, mill capacities, and ores treated. The initial milling operations engaged in uranium recovery were constructed and operated for vanadium recovery and the circuits revamped and adjusted to produce uranium concentrate as a byproduct. As additional uranium ore reserves were developed, these initial milling operations went through several expansion stages, to assist in meeting the United States requirements for uranium concentrate. These mills are still operating today. In addition, mills that later were built specifically for uranium recovery have undergone several stages of expansion. Also, due to the development of improved and cheaper uranium recovery techniques 7 of the 9 uranium ore processing mills which were in operattion before 1956 have installed new processes and revised their original circuits. This includes the new Rifle complex of Union Carbide Nuclear Co., which still start operation this winter to replace the old Rifle mill, one of the oldest uranium-vanadium mills now operating. 28671-58- -20 There are now 14 uranium mills in production with an aggregate capacity of about 10,000 tons per day. All of the mills have sulfuric acid leaching facilities for uranium recovery, although this is only a scavenger operation at two of the mills which primarily use a sodium carbonate leach for uranium and vanadium recovery. In addition, two mills have both acid and carbonate circuits as separate operations in order to process a variety of ores, especially those of high-lime content. To produce an acceptable uranium concentrate, 2 of the mills employ a fusion step for purification, 3 mills precipitate directly from purified leach liquors, 2 of the mills use column ion exchange, 6 of the mills have basket type resin-in-pulp ion exchange circuits, and 3 use liquid-liquid solvent extraction. The respective mills range in capacity from slightly less than 300 tons per day to about 3,300 tons per day. Six uranium mills, having a third of the total uranium ore milling capacity, also recover vanadium. Dual and expanding circuits, custom ore milling, conjunct vanadium recovery and the multitude of circuits being used for uranium recovery do not resolve into a discernable cost pattern. However, based on information which the Commission has available, the current direct and indirect milling costs, exclusive of major replacements and amortization, range from $8 to $15 per ton for the smaller mills and $7 to $10 for the larger mills. If a mill is recovering vanadium, $5 to $8 should be added for an overall processing cost per ton. The two most influential cost factors are capacity, since the labor costs and fixed charges will vary inversely according to the tonnage treated, and chemical costs, which are influenced by the character of the ore being treated. For a regenerative sodium-carbonate circuit, chemical costs will normally range from $1.50 to $2.50 per ton but can increase considerably if pulp aeration is replaced by chemical oxidizers. For acid circuits, the chemical costs will range from $2 to as high as $7 per ton. The extreme range for acid circuits is the result of the acid consumption in leaching, which ranges from 40 to 400 pounds per ton, and averages about 180 pounds. A mill may recover some of the acid costs by charging a "lime penalty" in purchasing custom ores. The cost of building a uranium ore processing facility in the United States ranges from $5,000 to $10,000 for each ton of daily capacity, depending upon the size of the operation. Assuming 5 years for amortization, the amortization charge would be from $2.80 to $5.50 per ton. The average cost of processing uranium ore has been reduced by approximately one-half since 1953. This has been accompanied by a gradual increase in overall uranium recovery from the low eighties to the current average of more than 90 percent. With lower milling costs, due to improved metallurgy and larger mills, lower prices are being negotiated for domestic uranium concentrate despite higher labor and material costs. The average price will be reduced further as contracts with older high-cost mills expire and the newer mills are amortized. The average price paid for domestic concentrate in fiscal year 1956 was $11.60 per pound of U3O. and in 1957, $10.50. The estimate for the current fiscal year is $9.60 and for 1959, $9.30. These prices include a factor for amortization on a 5-year basis and are based upon an estimated normal grade of millfeed. Prices may be somewhat lower or higher depending upon whether the millfeed grade is higher or lower than the estimate used for the base price. It is interesting to compare these prices with the average prices in United States dollars for foreign concentrate. The average price paid by the Commission for foreign concentrate was $10.90 per pound of UsOs in fiscal year 1956 and $11.15 in 1957. The estimate for 1958 is $11.15 and for 1959, $10.70. All contract prices, domestic and foreign, have been negotiated on the estimated costs of production or are related to audited costs of production. In the domestic program, ore cost is based upon the prices contained in the Commission's published ore-buying schedule and not upon mining cost. These price differences do not indicate the wide differences in the uranium content of the material processed. Recovery from South African gold tailings averages about one-half a pound of UsOs per ton. In Blind River, Canada's major uranium field, recovery will be about 2 pounds per ton of ore. In the United States, it is about 5 pounds. South Africa is able to achieve relatively low production costs because most of the tailings processed are a byproduct of gold mining which bears the mining, crushing and grinding charges. Also, the plants all have large capacities, ranging from 1,500 to nearly 7,000 tons per day. Acid consumption is low because the gold ores are about 95 percent silica. Even with these operating |