Cotter eyes revival for its mines

Japan seeks firm's uranium to fuel its nuclear plants

Gargi Chakrabarty, Rocky Mountain News

Published June 10, 2006 at midnight

Text size

More Energy

More stories »

The owner of the shuttered uranium mines in Montrose County is in talks with Japanese officials to reopen the mines as a supplier of fuel for nuclear power plants in the Asian nation.

Recent talks between Denver's Cotter Corp. and Japanese officials also have touched on the possibility of revamping the company's uranium mill in Cañon City - at an estimated cost of $20 million.

But the discussions are at a preliminary stage, said Jerry Powers, Cotter's manager of administration. He said executives at San Diego-based General Atomics, which owns Cotter, are handling the talks.

"We are talking with Japan; that country has many nuclear plants," Powers said. "We are looking into becoming a dedicated (fuel) supplier to the power plants."

Cotter had laid off 49 employees at its four uranium and vanadium mines near the town of Naturita and nearly 80 at its uranium mill this year.

The company had blamed the high cost of fuels such as diesel and other chemicals for the layoffs, saying its soaring cost of operations has made the mines and mills economically impractical. In addition, the mines hadn't been producing enough high-quality ore to run the mill profitably.

Since then, the mines and mills have been on standby, maintained by a skeleton crew of 16 miners and 35 mill workers.

The U.S. Nuclear Regulatory Commission, which oversees the export of uranium and related products - said Cotter must be granted a license before it can ship uranium or yellowcake to Japan.

Yellowcake is a coarse reddish-yellow powder made up of oxidized uranium that is milled from mined ore. It contains scant radioactive elements and is put through various milling processes and eventually turned into fuel rods, which are used in nuclear power plants.

An export license typically takes two months to process, said Stephen Dembek, section chief at NRC's Office of International Programs.

Once a company requests a license and submits an application fee, the NRC scrutinizes the type of uranium the company wants to export and where the product would go. The NRC shares the information with the State Department, which then contacts the foreign government.

If the foreign government can provide assurance that the product is intended for peaceful purposes such as generation of power from nuclear plants, the State Department advises the NRC. The commission conducts a final check to ensure the export won't be used to harm the United States before issuing the license, Dembek said.

"There is a lot of export of uranium -fuel or raw ore from private companies, mostly to Japan and Korea," Dembek said. "We issue export licenses either for a single shipment or for shipments over several years, depending on the nature of the export."

Cotter's efforts to reopen the mines come as global prices of uranium rise as a result of growing demand from European and Asian countries.

Those countries are switching to nuclear reactors for power generation in the face of rising oil prices and global warming.

In the United States, 103 nuclear reactors in 31 states provide electricity to one of every five homes and businesses.

World demand for uranium will be 185 million pounds in 2013, the Nuclear Energy Institute in Washington, D.C., estimates. But supply likely will be significantly lower, at about 130 million pounds, suggesting a future shortage of the radioactive mineral.

Sharyn Cunningham, co-chairwoman of the Colorado Citizens Against Toxicwaste Inc., said she is worried about Cotter's ability to safely operate the mill and mines given concerns about possible leaks at its tailing ponds. The productivity of the mines is also in doubt.

"When Cotter went on standby, they were having problems with getting ore that was high enough in uranium content and processing a good enough product," Cunningham said. "It seems like they are putting the cart before the horse in finding a buyer before they have resolved the production problems."

chakrabartyg@RockyMountainNews.com or 303-892-2976

Subscribe to the Rocky Mountain News