Appendix 1.-Remarks prepared by Jesse C. Johnson, Director, Division of Raw Materials, United States Atomic Energy Commis- sion, for delivery before the fourth annual conference of the Atomic Industrial Forum, New York, N. Y., October 28, 1957. Appendix 2.-Remarks prepared by Elton A. Youngberg, assistant manager for operations, Grand Junction Operations Office, United States Atomic Energy Commission, for presentation before the symposium sponsored by the United States Chamber of Commerce and the Uranium Institute of America, Denver, Colo., December 16, 1957_ Appendix 3.-AEC's October 1957 announcement on limiting uranium procurement; statement made to the Joint Committee on Atomic Energy by Jesse C. Johnson, Director, Division of Raw Materials, Appendix 4.-Additional domestic uranium production statistics for Appendix 5.-Joint Committee press release No. 114, January 21, 1958, Appendix 6.—Address by Senator Albert Gore before the National Western Mining Conference, Denver, Colo., February 8, 1958- Appendix 7.-Joint Committee press release No. 132, March 17, 1958, 293 PROBLEMS OF THE URANIUM MINING AND MILLING INDUSTRY WEDNESDAY, FEBRUARY 19, 1958 CONGRESS OF THE UNITED STATES, JOINT COMMITTEE ON ATOMIC ENERGY, Washington, D.C. Present: Representatives Durham (chairman of the committee), Holifield, Price, Dempsey, Van Zandt, and Hosmer; Senators Anderson, Pastore, Hickenlooper, Bricker, and Dworshak. Also present: James T. Ramey, executive director; David R. Toll, staff counsel; and George E. Brown, Jr., and Richard Smith, staff members, Joint Committee on Atomic Energy. Chairman DURHAM. As part of our hearings under section 202 of the Atomic Energy Act held each year on "development, growth, and state of the atomic energy industry," the Joint Committee is much concerned this year with the problems of the domestic uranium mining and milling industry. Our first witness this afternoon who will testify concerning this subject is Commissioner Vance. Chairman Strauss, the other Commissioners, and Mr. Jesse Johnson, Director of the AEC Division of Raw Materials, are also present to answer questions from committee members. You may proceed, Commissioner Vance. STATEMENTS OF LEWIS L. STRAUSS, CHAIRMAN, HAROLD S. VANCE, COMMISSIONER, AND JESSE C. JOHNSON, DIRECTOR, DIVISION OF RAW MATERIALS, ATOMIC ENERGY COMMISSION Mr. VANCE. Mr. Chairman, the first subject assigned to me for presentation today is the raw materials base for the atomic industry. Our uranium supply situation has remained strong during the past year. Domestic ore production increased to 3.6 million tons. In terms of U308 concentrate, our domestic production is now at the rate of 10,000 tons annually and is scheduled to increase to more than 15,000 tons annually by a year from now. Before the end of 1959, this rate may reach 17,000 to 18,000 tons. Our reserve position has continued to improve, with total domestic reserves now estimated at 75 million tons of ore as against 60 million tons last year. This ore reserve is equivalent to approximately 200,000 tons of U308 and, thus, represents about a 10-year supply at the estimated 1960 domestic production rate. Although domestic ore and mill production increased during the year, foreign sources continued to furnish a substantial portion of our total concentrate purchases. It is expected that these foreign supplies will diminish after the next few years, as many contracts ex 1 pire during the period 1960-66, and no new commitments have been made recently. On the contrary, the Commission has found it advisable, during the past year, to release for sale to the United Kingdom significant quantities of Canadian uranium which were under contract to AEC. In consequence of our greatly strengthened uranium supply situation, the Commission announced last October that it would limit new domestic procurement which involves construction of new milling facilities. This new policy, of course, does not mean that concentrate production will be cut back or held to present levels. As stated above U308 is scheduled to increase some 50 percent during the next few years. The real significance and meaning of this new policy is that we have reached a point in our supply picture where deliveries of uranium already contracted for appear adequate for presently projected military and power requirements. Moreover, since we are in the fortunate position of being able to expand domestic production substantially in case of a sudden rise in requirements, any expansion now beyond levels that can be sustained by the known market in the years ahead, would be wasteful and might subject the industry to future readjustments. While this decision creates some problems, we are studying them, and Mr. Jesse Johnson, our Director of raw materials, will have more to say on that subject in a separate statement on the raw materials situation. The size of the free world uranium reserves is of great importance both to defense needs, and to the development of the peaceful applications of atomic energy. The useful lifetime of a power generation plant is generally estimated at approximatey 30 to 35 years, and as nuclear plants cannot be easily switched from one fuel to another, an adequate future supply of uranium may well be an important factor in determining the growth of the nuclear-power industry. In expanding its known reserves of uranium from the small amounts that were known to exist 10 years ago, to its present level, the uranium industry has met the immediate challenge of providing a raw materials base for the atomic energy industry as it exists today. With expansion as needed in the future, we are confident that the industry will wholeheartedly perform as it has in the past 10 years. Representative DEMPSEY. Mr. Chairman, may I be recognized? Chairman DURHAM. Mr. Dempsey. Representative DEMPSEY. Mr. Commissioner, does the Commission consider a 10-year supply of ore reserves in this country adequate? Mr. VANCE. I will ask Mr. Johnson to reply to that question. Mr. JOHNSON. I did not hear the question. Representative DEMPSEY. I asked if the Commission considers a 10-year supply of ore reserves adequate for our Nation? Mr. JOHNSON. I can only give my personal view. I think a 10-year supply of ore reserves is not an adequate supply unless you can be very sure that you are going to continue to be able to maintain ore reserves of that kind, because we are building atomic powerplants for 30 and 40 years from now. Representative DEMPSEY. You have stated that Canada has a 25 to 30 year reserve. Are you expecting us to depend upon Canada for ore for the United States? Mr. JOHNSON. My view is that the United States will be able to continue to develop uranium ore reserves at a substantial rate, and I believe that we can be reasonably self-sufficient in uranium in the future by continuing development and exploration. Representative DEMPSEY. Do you know of any prospectors in America that are now prospecting for uranium ore since your speech in New York on October 28, 1957, when you said would not purchase from any new discovery? (A copy of Mr. Johnson's speech before the Atomic Industrial Forum in New York City, on October 28, 1957, may be found in the appendix, p. 287.) Mr. JOHNSON. There is very substantial prospecting, development, and exploration underway today, Mr. Dempsey, but there has been a considerable falling off of prospecting, I will admit. But I would not expect to see development and exploration to be seriously reduced since we have a $200 million to a $300 million prosperous domestic uranium industry that will be operating until about 1966. It is inconceivable to me that this industry would feed upon its ore reserves without making provision for the uranium markets of the future. Representative DEMPSEY. Mr. Johnson, the uranium business for the United States Government will run between $600 million and $700 million this year; will it not? Mr. JOHNSON. The domestic uranium business in-I have the figure here the purchase by the Atomic Energy Commission for domestic uranium concentrates was $134 million in 1956, $171 million in 1957, and we estimate that domestic purchase of uranium concentrate for 1958 will be about $247 million, and that in 1959 Representative DEMPSEY. What is the foreign purchase at that time? Mr. JOHNSON. The foreign purchases in 1959, when our own domestic purchases are about $322 million, the total uranium bill will be something over $700 million. There will be $400 million for foreign. Representative DEMPSEY. $400 million for foreign? Mr. JOHNSON. Yes, sir. Representative DEMPSEY. In 1957 you decreased the unit payment for domestic ore and increased it for foreign; why was that? Mr. JOHNSON. There was no change in the price of any of our negotiated contracts. The contracts have been firm, but over the period of years our domestic prices have been going down as a result of technological improvements, but particularly because of large-size uranium mills and the fact that domestic ores are much higher grade than foreign ores. For the first time, I think, in 1957 in the whole history of our uranium purchases domestic prices were slightly lower than the foreign prices. Representative DEMPSEY. Did you not at that time increase the foreign price by 3 percent? Mr. JOHNSON. No, sir; they were not increased. Representative DEMPSEY. I have here your financial statement— Atomic Energy Commission statement-and it says: Domestic sources were decreased 10 percent and foreign countries increased 2 percent. |