an additional period of almost 5 years beyond March 31, 1962. This assurance will assist uranium mining and milling firms in planning future operations." It further stated "The Commission, at its option, may limit the purchase of concentrates derived from any one mining property or mine operation to 500 tons of U-308 per year. Depending on requirements, additional quantities may be purchased. Such purchase of additional quantities may be at a price of $8." In testimony before the Joint Committee on Atomic Energy, in February of 1956, Dr. Johnson stated "In the past we have attempted to obtain maximum production as rapidly as possible. By 1962 our objective may be to maintain production at some general level, rather than to expand it, and at the same time encourage prospecting and exploration so as to develop ore reserves to assure a continuing domestic uranium supply.' The uranium industry has operated at a decided disadvantage in that because of the necessary, and sometimes not so necessary, veil of secrecy which has cloaked the requirements for uranium, those in the industry have not been able to gage, as have other industries, what the demand for their product was and what they could expect it to be in the future. As a result, those in the industry have had to depend upon the assurances given them in remarks made by Atomic Energy Commission officials. Up to this time they have been led to believe that there would be an unqualified demand for all uranium they could produce up through 1962. And, based upon the marketing requirements after 1962, that they could expect to produce 500 tons of U-308 per year. Although they have recognized that the Commission's ore-buying schedule provided that no producer may deliver in excess of 1,000 tons in any year without a contract, the Commission's policy, as was expressly stated by Dr. Johnson in his articles in Engineering and Mining Journals, above referred to, has been this provision was not for the purpose of restricting ore production. And further, as Dr. Johnson stated: "This would be evasion under a technicality of the Commission's assurances to the miners." Now, the Commission has used this very technicality, which is an evasion, as Dr. Johnson called it, by providing that the Commission will let only a limited number of contracts and only to those who have already initiated negotiations with the Commission. Again and again the spokesmen of the Commission have stated that it is necessary to encourage further exploration and development. Even as late as Dr. Johnson's speech before the Atomic Industrial Forum on October 28, 1957, Dr. Johnson stated: "I believe that the uranium-production rates and schedules can be maintained for many years without resorting to the low-grade, high-cost sources. However, this will require a continuing major exploration effort. If the more optimistic estimates of uranium needed for power required by 1970 or 1975— from 50,000 to 100,000 tons of uranium per year-are to be met, an intensive worldwide search must be started well in advance." The industry, in reliance upon the supposed Government market for uranium, has invested millions of dollars in exploration and development. If this exploration is to continue, the money which those in the industry have tied up in exploration and developing ore bodies, some of which under present milling facilities in their areas will not be recovered from between 10 and 20 years, must first be recovered with a slight profit margin before that money can be reinvested and further exploration carried forward. CONCLUSIONS AND RECOMMENDATIONS 1. If it is necessary to restrict further expansion of uranium production, first restrictions should be imposed on other than domestic production in order that exploration for and development of domestic reserves can continue. 2. Definite official public statement of policy, rather than ambiguous remarks to private groups, should be made by AEC and in the event such policy is to curtail future expansion of production, sufficient time element should be given to allow producers who have relied on previous policy to prepare for survival as best they can when possible. 3. Even if future expansion is to be restricted, sufficient new mill contracts should be let to correct present inequities in area milling capacities based upon present reserves, and capital investments in those reserves, which have been made in reliance upon existing policy. 4. Make some provision aside from production to encourage exploration for new reserves. One example could be advancing partial payment against ore 23671-58-11 in ground, in return for agreement to retain ore in ground for certain period of time. This program might be compared with the Government's present soilconservation program now in effect. 5. Definite consideration of the inventory and timelag problem faced by the mining industry in that it is often 4 to 5 years from discovery until ore is mined; therefore, any change in policy should take into consideration the necessity of allowing the producer to liquidate a portion of an inventory which he built based on past AEC policy. Chairman DURHAM. Can you give me some idea as to your membership in the association? Mr. ORR. Yes, sir. My background is something of a legacy rather than formal training, my grandfather being one of the original vanadium producers and I growing up with it from the time I was a small boy. Following my entry into the radio-journalist field, I covered the uranium developments from the outset. In 1954 I became the editor of the Uranium Information Digest. At the time the digest ceased to exist due to lack of advertising revenues, I again went into the radio and journalism field where I am now, and still keeping a very close touch with the industry through my activity at UOPA, and also at the news level. Chairman DURHAM. Thank you very much, Mr. Orr. Mr. ORR. Thank you. Chairman DURHAM. The next witness is Senator Allott. Senator, we are very glad to have you with us this morning. We shall be happy to have you proceed at this time. JOINT STATEMENT OF HON. GORDON ALLOTT, AND HON. JOHN A. CARROLL, UNITED STATES SENATORS FROM THE STATE OF COLORADO Senator ALLOTT. Thank you, Mr. Chairman. Before commencing this statement, I would like to say that my colleague from Colorado, Senator Carroll, has authorized me to say that he joins in my statement and this is to be considered as a joint statement of not only myself, but him. Chairman DURHAM. Thank you very much. Senator ALLOTT. Thank you for the opportunity to appear here today. As the senior Senator from Colorado, I am vitally interested in the uranium industry in all its aspects, including exploration, development, production, and milling. It has become and is a vital economic factor in Colorado. I have received definite written representations that there now exists a serious condition of hardship in the uranium industry along the Front Range of the Rocky Mountains. This condition is due in part to the fact that uranium producers are no longer getting adequate service from existing mills. There have been new discoveries of ore deposits on the eastern slope. At the same time the mills to which ore has been shipped from the Front Range have had greater demands made on them from their own localities. The result is that they are taking less ore from the Front Range. For this reason my constituents and I have a very strong feeling that a mill along the eastern slope would alleviate this hardship. Several mills have been proposed in different locations, and with different capacities. The Cotter Co. would like a 200-ton mill at Canon City. A mill near Walsenburg is proposed, and there are other suggestions. I know that the Commission will weigh the testimony and evidence on these proposed mill sites, and it is up to the Commission, of course, to decide which application will be selected. There are others here today to express their views on this situation. A number of people from Colorado who are directly concerned with the industry and with this problem have come here to discuss it with you. I know that you will give them all a careful hearing. I am referring particularly to this Front Range problem. I would particularly like to comment on the excellent statement of Mr. Gordon Weller, of the Uranium Institute of America, yesterday, and on Mr. Weller's proposal for an effective advisory council. It seems to me imperative that the present inactive group be replaced with a council that will operate closely and effectively with the people in the industry. The Government has a particular obligation to the uranium producers because of their unique position among our domestic industries. Advisory groups have been set up for other fields where a great deal more self-determination is possible. The uranium industry is not able to investigate and develop its own markets, but is at present totally dependent on the Federal Government. The Government in its dependence on the industry has found the uranium producers willing to cooperate to the utmost. There is certainly a corresponding moral obligation on the Government to cooperate in turn with the industry. In the past this desired cooperation has been lacking, and I am very anxious that this situation be corrected. I believe some of the Colorado witnesses will comment on the duty of the Commission to give the industry early enough notice on purchasing policy so that adjustments can be made without loss. Considering the risk ordinarily involved in mining ventures, a sudden seemingly arbitrary action on the part of the Government can wreak havoc with the industry and with the economy of those areas dependent on uranium production. My good friend, Bob Palmer, speaking for the Colorado Mining Association, will point up some of the specific problems involved. In closing, I want to compliment the Raw Materials Divisions for their foresight in ordering a survey to appraise the hardship problem. This will be of assistance to all of us who are seeking means to overcome the current and potentially hazardous economic conditions facing the uranium miners. I am sure that an answer can be found, and I shall be happy to work with all of you to find it. Thank you, Mr. Chairman. Chairman DURHAM. Thank you very much, Senator. STATEMENT OF ROBERT S. PALMER, EXECUTIVE VICE PRESIDENT, COLORADO MINING ASSOCIATION Mr. PALMER. First, Mr. Chairman, and members of the committee, on behalf of the uranium mining industry in the Rocky Mountain region, we want to thank the Joint Committee for the excellent job it has been doing and the many hours of attention you have been giving to our problems. We would also like to express our sincere appreciation for the grand job being done by the Commission, and particularly by its able personnel and I would like to refer to Jesse Johnson in particular, whom we have known for a long time in the mining industry as one of the ablest servants in Government. The complexity of uranium prospecting, exploration, development, and mining requires the talents and capabilities of a wide variety of people, both technically trained and otherwise, who have devoted the greater part of their lives during the past few years in searching out, exploring, developing and bringing into production comparatively isolated areas, experiencing almost unbelievable hardship in some instances, and in many great sacrifice. The welfare of the Nation was at stake and the United States needed reserves of uranium in order to plot its course toward continued world leadership, safety and security. Some skeptics, principally in technical branches of the State Department, were convinced that America was a "have-not" nation, uraniumwise, and some great financiers were pointing with scorn at the small pods and lenticular ore bodies being uncovered by the untiring and relentless prospectors. Many were inspired to make their country a "have" nation, uraniumwise, working under a well conceived and carefully worked out program of the Atomic Energy Commission. This program assured stability to an industry which was new and untried. It gave to the miner an assured market for all uranium ores produced under the AEC domestic buying program until March 31, 1962. Thousands of additional Americans supported this program by investing their savings in exploration and development activity in proportions never before seen in the history of the country. On May 24, 1956, the Commission announced that the guaranteed price on uranium would be extended by 5 years beyond March 31, 1962, to December 31, 1966. The new domestic procurement program provided a guaranteed market price for all domestic production of concentrates from domestic mills for domestic ores, subject to a limitation at the Commission's option of 500 tons of uranium oxide per year from any one mining property or mining operation provided it complied with the Commission's specifications. It was apparent to the Nation and certainly to the mining industry that the later action was taken in recognition of the need for a continuing Government market in order to maintain a high rate of exploration and development, and assure the uranium miner of a continued outlet for his ore. It was also apparent that at the time the announcement was made known, ore reserves would be greatly depleted by 1962 unless the program were extended and the industry encouraged to continue aggressive development and exploration. While heavy contributions were made by major operators in this all-out effort to make America safe and secure, by and large the major contributions were made by the small prospectors and operatorsthose fellows whose survival must be maintained as a sound Government policy lest Uncle Sam lose his world leadership for want of a sound uranium mineral policy. Many of the larger milling operations, in which thousands of stockholders have invested their moneys, are largely dependent on a constant supply of ore from small mining operations. Small shippers are, in many instances, falling by the wayside even under present existing governmental programs. In urging the Congress to authorize the Commission to reaffirm and clarify its current policies and practices with relation to the uranium mining and milling industry, it is the hope of our association that not only up to but also subsequent to March 31, 1962, the present incentives to the smaller operators will be continued, if not augmented. It is further our recommendation that the proper committees of Congress continue the defense minerals exploration program in the national interest. It is quite apparent to those of us who represent the uranium industry that a reaffirmation of Commission policies is desirable at this time, for some confusion exists in the minds of many of those engaged in uranium mining and milling in the United States today as to just what is in store for us. Apparently the Atomic Energy Commission's monopolistic procurement practices will eventually come to an end and, as recently announced, private commercial markets if not foreign markets will be opened to American uranium producers. Estimates as to the time this transition period may take place vary. But, in any event, recognized authorities in science, engineering, finance, and Government recently at our national western conference in Denver reassured the uranium industry that its product, namely uranium, was vital and essential to the future welfare, safety, and security of the United States; that in fact worldwide requirements would increase with time, and that any nation which desired to keep step with progress must of necessity rely on atomic energy from the source material known and recognized as uranium. If industry is to spend millions, yes billions of dollars in the development of the end use of this product, if the taxpayers of the United States are to expend millions, yes billions of dollars in research and experimentation to the end that civilization will grow and prosper through the use of this product, then certainly it is within the realm of sound national policy to take into consideration the needs and requirements of those who search out, explore, develop, and produce this source material under the American flag. We have only the highest commendation for the Atomic Energy Commission for making its foreign commitments. We recognize that these are, for the most part, binding contracts which are in some instances being modified by the release of some of the material to foreign friends. The mining industry recognizes full well the numerous advantages to be achieved from long-term contracts. In fact, the mining industry |