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It may soon be possible, for example, to declassify and make available in public document rooms copies of all milling contracts-both in the United States of America and in Canada. As of December 31, 1957, there were 16 mills operating in the United States (6 in Colorado, 2 in New Mexico, 4 in Utah, 1 in South Dakota, 1 in Arizona, 1 in Wyoming, and 1 in Washington) and 9 more under construction or contract (2 in Colorado, 2 in Wyoming, 1 in Oregon, and 4 in New Mexico). As I understand it, the AEC has followed a policy of keeping secret the individual prices negotiated in these contracts, perhaps in order to drive harder bargains with others and obtain a lower price in subsequent negotiations. This, however, seems to me to raise some problems, in view of the considerable amount of information and bargaining power available to the AEC, as compared to the representatives of the milling company sitting on the other side of the bargaining table.

Since there are no problems of national security or restricted data here, I believe that there are reasons for saying that AEC should make more information of this type available in public document rooms in Washington, D. C., in Grand Junction, and in other places convenient to uranium mining and milling companies. The AEC may have a point in keeping some proprietary information confidential, as a means of preventing price fixing, or following-the-leader practices in negotiating prices. However, the surest way to promote honesty and fair dealing in most any business is to keep everything above board and out in the open.

Also, there are a number of contracts, perhaps a dozen or more, between the Atomic Energy Commission and the El Dorado Mining Co. for purchase of Canadian concentrates. At the present time, the average price being paid under these contracts is higher than the price being paid under our domestic contracts. I realize that there were reasons for keeping these contracts secret at the time that they were originally negotiated with the Canadians, but I believe that those days have now passed and that there are good reasons why these contract prices should not be made public.

Recently, the Atomic Energy Commission has proposed substantial amendments to the Atomic Energy Act of 1954 in order to permit greater exchange of information and material with our allies. This information and material would pertain directly to our allies' atomic weapons capability. Perhaps in view of these proposed modifications, we should review our entire security system in order to see whether or not more information could and should be made available to American industry.

Now, let me move on to the subject of the small miner and the dangers of concentration and monopoly in the uranium mining and milling industry. Mr. Elton A. Youngberg, Assistant Manager for Operations of the AEC Grand Junctions Operations Office, in an address here in Denver last December 16 made available some interesting statistics on this problem. According to Mr. Youngberg, the 6 largest shippers of uranium ore during fiscal year 1957 provided 1,871,835 tons of ore, or 55.7 percent of the total production in the United States. That is more than one-half of the total production, and coming from only 6 out of 727 shippers of uranium ore.

Moreover, beginning in 1962, the AEC will purchase its concentrates only from the milling companies. I wonder what the effect of this policy will be upon the small independent producer. Will the large milling companies be able to use this new system to drive the small independent producers out of business?

If the AEC decision to limit drastically further milling is permitted to stand, will this not have the future effect of driving the small miner out of business, and further concentration of power in the hands of the large companies operatin gthe uranium mills?

When one considers that most of our original ore discoveries were made by the individual miners or the small mining company, one must feel a certain sense of sorrow in observing this tendency toward big business and elimination of the small miner.

In uranium procurement, as in other matters, we have problems with our Canadian neighbors. At our request, they joined with us in the quest for uranium in 1948. They subsequently made substantial discoveries, especially in the Blind River area, and are delivering concentrates at the rate of about 10,000 tons this year, and are scheduled to level off at about 13,000 to 14,000 tons per year until most of the contracts expire on March 31, 1962. The Canadians, I am informed, could produce perhaps twice that amount per year except for the brakes that were placed upon the Canadian program by the AEC 22

years ago when it was announced that guaranteed price supports would not. extend, with only a few exceptions, beyond March 31, 1962.

As I understand the AEC plan for the period 1959-62, it is to limit commitments about as follows: Domestic commitments to about 17,000 to 18,000 tons a year, Canadian import commitments to about 13,000 or 14,000 tons a year; and commitments for imports from all other foreign sources, principally South Africa, to about 6,000 tons per year, making a total of about 36,000 to 38,000 tons per year during this period.

The Canadian production is, of course, less rich than our average domestic ores since we get about 51⁄2 pounds of uranium oxide from a ton of ore, as compared with about 21⁄2 pounds of uranium oxide per Canadian ton of ore. Largely for this reason, the AEC feels justified during the current fiscal year in paying an estimated average foreign price per pound of $11.15, as compared with the estimated average domestic price of only $9.60 per pound of U3Os in the current fiscal year 1958.

I can well understand the unhappiness of the domestic uranium miner in seeing his Government pay a higher price for processing ores in Canada that do not even meet the 0.20 percent minimum quality required for our domestic miners.

On the other hand, speaking as a lawyer, it seems clear to me that, both legally and morally, our contract commitments with our Canadian friends until March 31, 1962, are binding and should be honored. Thereafter, I surely see no justification for paying a premium for Canadian or other foreign ore.

Perhaps our British friends, who are making excellent progress with their Calder Hall reactor development program, can contract to acquire more Canadian

ores.

I realize that this is a complicated subject involving important relations with a close neighbor and ally. Moreover, our committee is just beginning to study this problem. Therefore, we have not reached any final conclusions, and we will not do so immedately nor rashly, but it does seem clear to us that the Canadian program is necessarily very closely interrelated with our own.

As an elected Member of the Senate, I am answerable to the taxpayers of our country, especially to those from the sovereign State of Tennessee. Mineral stockpiling programs, as you are aware, are expensive. However, if it becomes clear that we can stockpile domestic uranium concentrates at a cost substantially less than that of current foreign uranium concentrates, we will consider doing so in the national interest.

A stockpiling bill, H. R. 5010, was introduced by the distinguished chairman of our committee, Congressman Carl T. Durham, of North Carolina, during the last session of Congress. The committee has not yet held hearings on this bill, or on the general desirability for stockpiling, but perhaps the time is now ripe.

Some of these thoughts also remind me of the proposal made 2 years ago by Senator Anderson, of New Mexico, and Senator Jackson, of Washington, chairman of our Subcommittee on Military Applications, in a letter to the President proposing the establishment of an atomic "bank" of fissionable materials. They were turned down by the President, primarily on the ground that there was not enough raw materials or processing facilities. Perhaps we should request a reconsideration in terms of a stockpile or bank of concentrates. Such a supply of concentrates would provide the base for increased expansion, either in the military or in the peaceful uses of atomic energy.

I understand that the area perhaps most severely affected by the Commission's recent limitation decision is in Wyoming where there have been substantial recent discoveries, but with only a few milling outlets now available. My good friends and colleagues on the Joint Committee, Congressman Jack Dempsey and Senator Clinton P. Anderson, also remind me that there are hardships and problems in New Mexico, and the Joint Committee has also been advised of difficulties in the front range of Colorado, in Texas, in California, in Washington, and perhaps problems also exist in varying degrees in other places. During the last 2 weeks of February, the Joint Committee will hold open hearings on the development, growth, and state of the atomic energy industry, as required by section 202 of the act. The dates of Monday, February 24, and Tuesday, February 25, have been tentatively set aside for testimony by representatives of the uranium mining and milling industries. I know that some of you in the audience are scheduled to testify, and others are welcome to either appear personally or submit a written statement for the record. The statements should be forwarded to the Joint Committee by March 1, 1958.

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In addition, the AEC has been asked to conduct a survey of the effect upon the domestic industry arising from its October decision and to report to the Joint Committee. This report should be submitted by March 15.

Thereafter, later in March or April, the Subcommittee on Raw Materials, of which I am chairman, will hold public hearings on the Commission's ore-procurement policies. After these hearings, our committee will study and evaluate all the information we receive, and consider possible courses of action to deal with the problem.

As some of you may know, I have sponsored for the last 3 years a bill to provide additional Federal funds to accelerate our atomic power program. Two years ago, in 1956, my bill passed the United States Senate with a comfortable margin, but regrettably was defeated in the House, and by a very narrow margin at that. Last year, in the wake of the economy drive, my bill was not brought up in either House, but this year, I have introduced a new bill, S. 3000, to provide for nuclear-energy development in the amount of $1 billion. This bill would provide funds needed immediately for an expanding atomic-power program, and would also provide funds for research on a long-range program (nuclear propulsion through space) and a very long-range program (controlled thermonuclear power).

Since the rumor is going around that controlled thermonuclear power is just around the corner, I feel that I should say a few words about the fusion program, including the recent January 21, 1958, announcement.

The achievement of a controlled thermonuclear reaction, or releasing sustained energy from the fusion of the nuclei of hydrogen elements, is still far distant. The experiments in both Great Britain and the United States have not yet even reached the stage corresponding to December 2, 1942, when the first self-sustaining fission reaction took place. To create a corresponding self-sustaining hydrogen reaction would require an estimated temperature of 370,000,000° C., or 14 to 18 times the temperature in the interior of the sun. As indicated by the recent reports, British scientists have achieved at Harwell temperatures as high as 5,000,000° C. for about five one-thousandths of a second. The American scientists have reached temperatures of the hydrogen gas of as high as 6,000,000° C., but for shorter periods.

We have thus proceeded only a very short way along the road to achieve a controlled thermonuclear reaction. In my opinion, we have as a minimum the time it has taken us since the Fermi reactor of 1942 to go along this thermonuclear road. When we add to these considerations the fact that we have not yet reached a controlled thermonuclear reaction, and that (as we have learned in fission reactors) many, many years of further developments are needed thereafter, it is clear that we still have a long way to go. I believe we should proceed with vigorous research in this program, but I believe that the immediate need is for an expanding atomic-power program, based upon a sound uranium supply.

I have spoken often before as to the need for an accelerated atomic-power program, and therefore I shall say just a few words on this subject tonight. Last summer I traveled with other members of the Joint Committee on Atomic Energy to the opening meeting of the International Atomic Energy Agency in Vienna, Austria, and also visited various atomic energy facilities and laboratories in Western Europe. I visited Calder Hall in England, the Mol Laboratories in Belgium, and the Risoe Laboratory of Niels Bohr in Denmark. I saw a reactor constructed completely underground in Sweden, and I also spent 5 interesting days in Soviet Russia, where we inspected their much publicized 5,000 kilowatt reactor, and also their expanding nuclear research center at Dubna, north of Moscow.

In reflecting upon what I learned there, I believe we must be prepared to compete with the Soviets, and also with our British friends, in the development of nuclear power. Like the sputniks and the satellites, this is a scientific and difficult field which has caught the imagination of the peoples of the world, and the United States cannot afford to come in second or third best. I believe that we must make greater efforts than the AEC is now making. I think it is possible to help private industry, which now frankly admits that help is needed-and also provide for a program for construction of reactors by the Federal Government.

I do not underestimate the importance of adequate supplies of nuclear weapons material. But our hopes for the future are tied to the peaceful uses of this great source of energy.

Our supplies of conventional fuels, though comparatively abundant, are not inexhaustible, and known reserves are far from sufficient to meet prospective energy requirements. The world looks to uranium to fill the need.

We can and we must accelerate our efforts to develop the techniques and processes for the economical conversion of uranium into electric energy. When atomic power in commercial and industrial quantities becomes a reality-and it will become a reality-there will be an expanding market for your product. We are at the threshold of a new era, and you in the uranium industry have every right to look to the future with confidence.

APPENDIX 7

[Press release No. 132, March 17, 1958]

AEC REPORT ON URANIUM MINING AND MILLING PROBLEMS DELAYED 2 WEEKS

From the offices of the Joint Committee on Atomic Energy

Senator Albert Gore, chairman of the Subcommittee on Raw Materials, announced today that delivery of the AEC report on problems of the uranium mining and milling industry, originally scheduled for March 15, 1958, had been delayed, at the request of the Atomic Energy Commission.

The AEC has informed the Joint Committee that it anticipates that the report will be submitted within the next 2 weeks, and that it will include the Commission's decision as to recommended action.

In announcing the delay, Senator Gore said:

"The Commission informed me that it has completed its survey of the problems of the uranium mining and milling industry, but it is in the process of reaching a decision as to recommended action. The Commission requested a postponement, and I consented, because I believe that the report will be much more valuable if it includes the Commission's views on what should be done rather than just a survey of the problems of the industry. I am urging the Commission to reach its decision promptly. The recommendation can then be reviewed by the Joint Committee, and appropriate action, including any necessary legislation, can then be undertaken promptly to correct the problems of the industry."

Senator Gore indicated that the report would be made public after received, and that the subcommittee would decide whether or not to hold further public hearings after it has reviewed the report and the recommended AEC action.

Hon. CARL T. DURHAM,

APPENDIX 8

UNITED STATES ATOMIC ENERGY COMMISSION,
Washington, D. C., April 2, 1958.

Chairman, Joint Committee on Atomic Energy,

Congress of the United States.

DEAR MR. DURHAM : As requested by the Subcommittee on Raw Materials, we are transmitting herewith a report by the Division of Raw Materials dated March 31, 1958, which outlines the problems arising from the limitation of domestic uranium procurement announced October 28, 1957.

After study of the report, the Commission has taken action which will expand to a limited extent domestic uranium procurement. This action will provide an additional market for ore reserves developed prior to November 1, 1957. It is anticipated that this expansion will result in additional procurement contracts for mill concentrate increasing milling capacity by about 3,000 tons of ore per day and increasing annual concentrate production by about 2,500 tons of U-308.

It is the view of the Commission that it is in the best interest of the Government and the uranium industry to prevent overexpansion of production facilities and that the new capacity provided through purchase contracts should be held to a minimum. Nevertheless, the action taken in implementation of our procurement goal should provide a market in the vast majority of the cases which have been brought to the attention of the Commission and the committee.

Although the opportunity for industry to make private sales of uranium to foreign industrial users appears limited at this time, the AEC has under active study the question of licensing such sales subject to appropriate safeguards to assure that the material sold would be used for peaceful purposes. Sincerely yours,

LEWIS L. STRAUSS, Chairman.

APPENDIX 9

A REPORT ON THE DOMESTIC MINING AND MILLING PROBLEMS RESULTING FROM LIMITATION ON ADDITIONAL MILLING CAPACITY BY THE DIVISION OF RAW MATERIALS, ATOMIC ENERGY COMMISSION

1. The Commission on October 28, 1957, announced a policy of limiting its contracts prior to 1962 for additional domestic uranium concentrate. Its Grand Junction Operations Office was instructed to negotiate no new contracts involving additional milling facilities.

2. This action was taken to keep the Commission's annual uranium purchases in reasonable balance with its currently estimated requirements. Recent rapid expansion of domestic production, and the prospects of continued rapid expansion under an unlimited procurement program, posed a threat of overproduction that in the end might have serious adverse effects on the uranium industry, as well as result in excessive purchases by the Commission.

3. A review of the background of the domestic uranium program will indicate the basis upon which the uranium industry was developed and the reasons for the problems resulting from the limitation announcement.

I. BACKGROUND

4. Private uranium exploration and development have been based largely upon the procedures followed for nearly 10 years under the Commission's domestic uranium program.

5. The objective of the Commission had been to purchase the uranium concentrate it requires from privately financed and operated mills. In addition to providing the Commission with the type of material required for its production chain, this procedure had the advantage of promoting the development of private uranium mining and milling along the established pattern of the mining industry.

6. Under the procedures followed during the period of uranium shortage, any area having developed sufficient commercial ore to support a milling operation was eligible for a concentrate contract. The prospective milling company had to negotiate a concentrate contract with the Atomic Energy Commission and had to provide reasonable evidence of being able to finance the mill construction and operation and carry out the terms of the contract. The independent miners were protected by provisions in the contracts requiring the milling companies to purchase a minimum quantity of custom ore, if offered, and to pay prices for ore not less favorable than those contained in the Commission's published ore buying circular. Because of discoveries after execution of contracts the mill capacity allocated to custom ore has in some cases proved inadequate, and in the past this situation was generally corrected by providing new mills or expansion of existing facilities.

7. It was largely on the basis of these procedures that prospectors, independent miners, and milling organizations engaged in prospecting, exploration, and mine development. Usually the major expenditures for development have been by the prospective milling companies because adequate ore reserves had to be available in order to finance the proposed milling operations and to qualify for an AEC contract. In most areas the prospectors and small miners were the pioneers making the initial discoveries. Many of them transferred their properties to mining or milling companies for cash or stock, or retained royalty rights or a working interest. Others developed and operated their mines and sold thier ore to the mills. Many, including some who as yet have no developed reserves, have continuing expenditures in order to hold their properties because of purchase or lease requirements, or the annual assessment work required under the United States mining laws.

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