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By K. Wenrich

The uranium industry has made a dramatic turnaround in the past three years that even the most optimistic economist was not willing to predict during the uranium downswing of the 1990s. Uranium reached a 30-year low in February 2001 of $6.50/lb. By the end of February 2006 it had soared to $38.50/pound. This nearly 600% increase in the uranium spot price within 4 years dwarfed the increase in gold price that has barely mustered a 100% increase. The initial slow rise from $6.50 in February 2001 to $10.75 in April 2003 (fig. 1) was primarily driven by the decrease in the value of the dollar. Since then several factors have contributed to the soaring price: (1) The awakening of many to the simple fact that uranium supply has not met demand for several years and that the world’s stockpiles are being drawn down, (2) How sharply this fragile supply can be impacted by disasters at the world’s major uranium production facilities, such as a) the flooding of the McArthur River Mine in the spring of 2003, b) fires at Olympic Dam, c) the potential that Rossing, with an annual capacity of 4000 tonnes uranium might close by 2007, (3) the withdrawal of Tenex from the HEU (highly enriched uranium) feed agreement, and (4) the announcement by the Chinese of their intent to build 30 new nuclear reactors.

Jan 1, 2007

Australia had an active uranium mining industry in the 1950s with uranium oxide being supplied under contract to the atomic energy authorities of the U.K. and U.S.A. In the 1960s, when these con- tracts concluded, domestic production ceased, apart from Rum Jungle, whose production until 1971 was stockpiled. By the 1970s, the demand for uranium from the electrical utility industry had risen sharply and the effects on Australia were notable. The Mary Kath- leen mine re-opened in 1976 but, more significantly, exploration activity suddenly expanded with the re- sult that several world-standard deposits were locat- ed. Western world requirements for uranium based on increasing energy consumption and a changing energy mix, will warrant the development of Aust- ralia's resources. By 1985 our mines could be pro- ducing 9,500 tonnes of uranium oxide yearly and by 1995 the export value from uranium could reach that from wool. In terms of benefit to the community the economic rewards are considerable but, in terms of providing energy to the world, Australia's uranium is vital.

Jan 1, 1978

By Ta M. Li, John D. Wiebmer

Record high prices, burgeoning exploration programs, mine-mill openings, and plant expansions have all characterized a dramatic: resurgence of the US uranium industry in recent years. But while the bull is leading the way on the production side of the nuclear fuel cycle, there is reason for caution from the end-users' viewpoint. How fast will electrical demand grow in the years to come, and what portion of that will nuclear generators supply? How do utilities play their cards when the government holds two of the largest jokers in the deck-a policy on spent fuel reprocessing and a timetable for the fast breeder reactor? Is there a shortfall in domestic uranium supplies on the horizon?

Jan 10, 1978

By Savory P. J

Uranium mining operations commenced at Ranger mine site, Jabiru NT Australia in May 1980. The Ranger orebodies, totalling approximately 110 000 tonnes contained U305 had been indicated by airborne radiometric survey in 1969 and confirmed by drilling the following year. Both diamond and percussion drilling methods were used to define the mineralisation and samples were analysed using a combination of radiometric and neutron activation techniques. Ore reserve estimates were calculated from conventional and geostatistical methods, and following the mining of 15 million tonnes of ore, reconciliations with before mining estimates are well within acceptable industry standards. In-pit grade control employs radiometric techniques including a radiometric truck discriminator built in Australia to mine specification to meet production requirements and improve productivity. Environmental requirements associated with uranium mining are a daily consideration.

Jan 1, 1993

By J. Randel Hill

The 64th Texas Legislature passed the "Texas Surface Mining and Reclamation Act," Chapter 131, Texas Natural Resources Code (subsequently referred to as "the Act"), at a point in time when little surface mining had taken place within the state. Thus, enactment of regulatory control governing mining operations in our state has, for the most part, preceded widespread, intensive mining activity. I should point out that the statute applies only to the extraction of coal, lignite, uranium and uranium ore. A recent opinion rendered by the Attorney General's office has stated that extraction of the named elements, when it occurs incidental to the extraction of other materials, e.g., clay, is not not an activity subject to the Act. An important theme of the Act, frequently overlooked in other environmentally oriented legislation, is recognition of the Act's affect on the mining industry. The Act states that "the extraction of minerals by surface mining operations is a basic and essential activity making an important contribution to the economic well-being of the state and nation" and, in reference to reclamation being accomplished contemporaneously with mining, provides a recognition that "the extraction of minerals by responsible mining operations is an essential and beneficial economic activity." This legislative recognition is, of course balanced against the need for proper mined land reclamation, the rights of surface owners, the need to guard against unreasonable degradation to land and water resources and numerous other actions or events that the Legislature wanted protected. Another rather pervasive general theme that is established in the Act is the concept that the agency is entitled to obtain whatever information, or take whatever action, that appears reasonably necessary to effectuate the purposes of the Act. This concept, coupled with the detailed requirements placed on mining operations in the portions of the Act dealing with Permit Applications, Reclamation Plan and Reclamation Standards, easily insures that surface mining activities can and will be regulated to the extent necessary. Section 131.102(b)(2) is probably the most relevant provision in the Act which deals with the preclusion of mined lands becoming waste lands. This portion of the Act states that the surface mining operator shall: ". . . restore the land affected to the same or a substantially beneficial condition. ." In this language the Legislature had made it abundantly clear that the abandoned or orphaned lands found in some of the Eastern states, will not be tolerated in this State, and provided the Commission with a degree of latitude to determine what condition would be appropriate in each individual mining situation. I bring this area of the Act to your attention because it is the area which has received the most inquiries and concern by operators, i.e. what does "substantially beneficial" constitute? The Commission's staff has spent a considerable amount of time wrestling with the statutory language "substantially beneficial" to determine the legislative intent and provide operators with guidance of what they can expect. In this regard, the most definitive criteria in our opinion lies in the Act's legislative hsitory. The Legislature had before it basically three reclamation standards namely: House Bill 656, considered to provide the most stringent reclamation standard and identical to Senate Bill 66; House Bill 1717 which was supported by industry spokesmen and was considered to contain the least stringent reclamation standard; and Senate Bill 55 which was adopted by the Legislature. During the Bill's initial hearing before the House Environmental Affairs Committee, the House sponsor of the Senate Bill 55, which was the Bill eventually adopted, made the following statement: (I am quoting verbatim from the Committee's transcript although substituting the speaker's reference to the authors names with the Bill's numbers.) "An example of the differing approaches of the four bills can be seen in the area of reclamation standards and this is critical. House Bill 656, talking about restoring the surface of the land, House Bill 656 has this statement: 'At least fully capable of supporting the use to which it was capable of supporting prior to any mining or any higher or better use.' In other words you have to restore it to the level it was prior to the mining. Senate Bill 55: 'Restore the land to the same or substantially beneficial use.' Substantially beneficial use. (Emphasis his) House Bill 1717 says: 'Restore insofar as practical to appropriate beneficial post-mining use.' So that House Bill 1717 said to, 'restore insofar as practical to appropriate beneficial use. I think that's too weak, whereas I think the House Bill 656 that would call you to restore it to at least the use it had prior to the mining may also be too tight the other way. I think the Senate Bill 55 approach is down the middle of the road which says that you do restore it to the 'same or substantially beneficial use,' is a proper way to go there." Therefore, the conclusion that we have drawn from the legislative history of the bill is that the extent of reclamation required by "substantially beneficial" may be something other than the use it was prior to

Jan 1, 1979

By James K. Hallenburg

INTRODUCTION The delayed fission neutron, or DFN technique for uranium ore body analysis uses the first down-hole method for detecting uranium in place quantitatively. This technique detects the presence of and measures the amount of uranium in the formation. DFN TECHNIQUE DESCRIPTION The DFN technique depends upon inducing a fission reaction in the formation uranium with neutrons, resulting in an anomalous and quantitative return of neutrons from the uranium. Since there are no free, natural neutrons in formation, a good, low noise assessment may be made. There are several methods available for determining uranium quantity in situ. The method used by Century uses an electrical source of neutrons. This is a linear accelerator which bombards a tritium target with high velocity deuterium ions. The resulting reaction emits high energy neutrons which diffuse into the surrounding formation. They lose most of their energy until they come to thermal equilibrium with the formation. Upon encountering a fissile material, such as uranium, these thermal neutrons will react with the material. These reactions produce additional neutrons, the number of which is a function of the number of original neutrons and the amount of fissile material exposed. The particular source used, the linear accelerator, has several distinct advantages over other types of sources: 1. It can be turned off. Thus, it does not constitute a radioactive hazard when it is not in use. 2. It can be gated on in short bursts (6 to 8 microseconds). This results in measurements free of a high background of primary neutrons. 3. The output can be controlled. Thus, the neutron output can be made the same in a number of tools, easily and automatically. There are several interesting reactions which take place during the lifetime of the neutrons around the source. During the slowing down or moderating process the neutron can react with several elements. One of these is oxygen 17. This results in a background level of neutrons in any of the measurements which must be accounted for in any interpretation technique. These elements are usually uninteresting economically. The high energy neutrons will also react with uranium 238. However, the proportions of uranium 235 and 238 are nearly constant. Therefore, this reaction aids detection of uranium mineral and need not be seperated out. Upon reaching thermal energy the neutrons will react with any fissile material, uranium 235, uranium 234, and thorium 232. At present, we do not have good techniques for seperating out the reaction products of uranium 234 and thorium 232. However, uranium 234 is a small (.0055%) percentage of the uranium mineral and thorium 232 is usually not present in sedimentary deposits. When the uranium 235 reacts with thermal neutrons it breaks into two or more fragments and some neutrons. This occurs within a few microseconds after the primary neutrons have moderated and is the prompt reaction. One system uses this; the PFN or prompt fission neutron technique. We don't use this method because the neutron population is low and, therefore, the signal is small and difficult to work with, accurately. Within a few microseconds to several seconds the fission fragments also decay with the emmission of additional neutrons. Now, with a long time period available and a large neutron population we gate off the generator and measure the delayed fission neutrons after a waiting period. These neutrons can be a measure of the amount of uranium present around the probe. Thermal neutrons are detected with the DFN technique instead of capture gamma rays to avoid some of the returns from other elements than uranium. LOGGING TECHNIQUE The exact logging technique will depend, to some extent, upon the purpose of the measurement. However, the general technique is to first run the standard logs. These will include: 1. The gamma ray log for initial evaluation of the mineral body and for determining the position of the borehole within the mineral body, 2. The resistance or resistivity log for determining the formation quality, lithology, and porosity. 3. The S. P. curve for estimating the redox state and shale content, and measuring formation water salinity, 4. The hole deviation for locating the position, depth, and thickness of the mineral (and other formations), and 5. The neutron porosity curve. The neutron porosity curve is most important to the interpretation of the DFN readings. The neutrons from this tool are affected in the same way by bore hole and formation fluids as the DFN neutrons are. Therefore, we can use this curve to determine effect of the oxygen 17 in the water. Of course, this curve can be used to determine formation porosity. It can also be used to calculate formation density.

Jan 1, 1979

By J. F. Crouch

INTRODUCTION Roll front uranium has unique geologic characteristics (L,) which require specialized mining procedures. Roll front uranium occurs in arkosic sandstones with the ore zone typically less than 100 feet in thickness with up to 400 feet of overburden. The areal extent of ore is often a few thousand acres. Within the ore zone, ore grade material occurs in C and S shaped rolls, which are a few feet in width and height but may run laterally for several hundred feet. Since the total mine plan may include mining all ore, a roll front uranium mine may cover a few thousand acres. For both economic and environmental reasons, a roll front deposit is mined as a series of phases or sub-pits (3, 4) as illustrated in Figure 1. A typical sub-pit is 400 to 500 feet across. Sub-pit 1 is stripped initially and the overburden is spoiled on the surface. Depending on haul distance and overburden characteristics, stripping is done with trucks and shovels (or front-end loaders) or scrapers. When ore is encountered in sub-pit 1, mining begins, and the stripping equipment is moved to sub-pit 2, with sub-pit 2 overburden also being spoiled on the surface. When ore is encountered in sub- pit 2, sub-pit 1 mining should ideally be complete so the mining equipment can move to sub-pit 2 and sub-pit 3 overburden can be spoiled in the mined out sub-pit 1 area. Ore is mined selectively in a series of 12 to 24 inch cuts by a 2-1/2 yard backhoe on the basis of radiometric probing. For effective drainage, ditches must be maintained on the boundary of sub-pits, and mining lifts are kept as level as possible, with the orebody slightly elevated as part of general good mining practice. Waste removal in the ore zone is done by self- loading scrapers near the orebodies and by push-pull or push loaded scrapers away from the orebodies. Each self-loading scraper cut is

Jan 1, 1983

By L. A. Clark

Although vein-, syenite-, and pegmatite-type deposits are known in Saskatchewan, recent intense exploration stems from discovery of several exceptionally high grade uranium and uranium-nickel deposits locallized near the basal unconformity of the 1.3-1.4 b.y. Athabasca Sandstone Formation. Graphitic basement rocks and post-Athabasca faulting or brecciation coincident with the unconformity are important in locallizing uranium deposits which form as tabular, shoe lace-like bodies with grades averaging over two percent and containing up to 50,000 tonnes U308. Some deposits have similar nickel contents. A few published sandstone analyses average 0.8 ppm uranium while basement granitoid and meta-sedimentary rocks vary from 0.5 to 20 ppm. In the proposed genetic model, traces of uranium are leached from these rocks by oxidized formation waters sweeping through the sandstone and along faults. Solutions are reduced and uranium is precipitated as basement graphitic meta-pelites are encountered along brecciated fault zones.

Jan 1, 1979

By B. Dyck, C. Rodgers

ABSTRACT Cameco Corporation is revitalizing its Key Lake Operation uranium mill in northern Saskatchewan. The mill currently uses ammonia stripping in solvent extraction (SX) and ammonia yellowcake precipitation. As part of the revitalization, the company considered installing strong acid stripping in solvent extraction (used at its Rabbit Lake Operation), which would lead to using hydrogen peroxide for uranium precipitation. As part of the process evaluation, tests were carried out to study how the drying temperature in indirect fired dryers would affect the uranium peroxide yellowcake precipitate properties. This paper discusses the test work results, including the relationships between drying temperature and product reactivity with water, product colour, product grade, and energy input requirements.

Jan 1, 2012

By Paul Basinski

The Northern Reese River Valley is in west-central Lander County approximately 31 miles north of Austin, Nevada in the north-central Basin and Range Province (Figure 1). Authigenic zeolites, which were previously undescribed in the literature, are voluminous in this small sedimentary basin. Uranium mineralization is also abundant in this study area. Until now, what we believe to be cause and effect have not been put together. X-ray diffraction, differential thermal analysis, and scanning electron microscopy reveal clinoptilolite, erionite, analcime, and minor chabazite to be present (Figures 2, 3). Assays show uranium to be present in thicknesses up to 0.7 meters at amounts up to 0.10% eU308. The sediments in the Northern Reese River Valley belong to the Mio-Pliocene Humboldt Formation equivalents. This formation consists largely of tuffacious lacustrine and fluviatile sedimentary rocks. Mudstone is the dominant lithology and intercalated thin zeolite strata (usually less than 0.6 meter thick) are present. Zeolites in the Northern Reese River Valley were diagenetically derived from rhyolitic glass deposited in a shallow, saline-alkaline lake under arid to semi-arid conditions. Clinoptilolite from the study area was K-Ar dated at approximately 4.7 + 0.5 million years which corresponds to Middle Pliocene age (Krueger and Basinski, in press). This age is further substantiated by Middle Pliocene mammalian fauna collected in the vicinity by Deffeyes (1).

Jan 1, 1979

By Richard A. Brown

The direct precipitation of uranium with hydrogen peroxide has been known since 1877. Commercial use of the process began in the 1960's. During 1967 the Bureau of Mines assisted the Climax Uranium Co., Grand Junction, Colorado in the development of a uranyl peroxide precipitation process to control a molybdenum impurity problem (1). Atlas Minerals, Moab, Utah has used hydrogen peroxide to control vanadium and sodium levels in their uranium concentrates since 1969 (2). Recently, the use of hydrogen peroxide by the uranium industry has grown, particularly since the increased demand for uranium has led to the processing of low grade ores. Impurities present in low grade ores can be concentrated with the uranium during milling and will substantially complicate the refining of uranium yellowcake concentrates. Consequently, commercial nuclear fuel processors have imposed stringent specifications and penalties to control these impurities. The ability to produce a pure uranium yellowcake can eliminate penalty or reprocessing costs. Hydrogen peroxide precipitation of uranium is specific and quantitative, producing a very high purity product.

Jan 1, 1980

By K. D. Hester

"1.0 INTRODUCTIONThe uranium industry started in Canada with the reopening of the gravity concentrator at Eldorado's Port Radium mine in the North West Territories in 1942. In 1948, uranium exploration and processing was opened to the private sector, and the Federal government offered special pricing incentives to the industry. Eldorado explored the Lake Athabaska deposits in northern Saskatchewan, and in 1953 opened the Beaverlodge mine. Other mines in the area soon followed. In 1953 also, the deposits in the Blind River - Elliot Lake area and in the Bancroft area of Ontario were discovered. Mines and mills were quickly developed in these areas.Canadian uranium production peaked at 15,900 short tons of U3O8 in 1959. In that year, uranium exports at $300,000,000 exceeded those of all other minerals in value. On October 1, 1959, Canadian uranium operations employed 13,900 people.Up to 1956, it was a seller's market. By 1958, world production of uranium was far ahead of requirements. Accordingly, in November of 1959, the USAEC announced it would not renew it's options for continued delivery of uranium from Canadian mines. This led to the ""stretchout"" of existing uranium contracts, and many mines were shut down (see Table 1) .In the early 1970's, a commercial uranium market seemed to be developing. In Ontario, at Elliot Lake and Bancroft, mines reopened. But competition was coming from the Athabaska basin of Saskatchewan. Currently it is these high grade, open pit deposits of northern Saskatchewan which are in the forefront of Canadian uranium developments. Canadian developments since 1942 reflect the political and market forces, as well as metallurgical progress and changes in environmental standards. This paper attempts to show these process changes in broad perspective."

Jan 1, 1987

By R. L. Miller

Two samples of iron enriched basalt (IEB) containing simulated nuclear fuel and having two distinct microstructures were prepared and tested for uranium recovery. The IEBs are refractory towards leaching by ground water. However, the uranium content (15.8%) is high enough that if aggressive leaching techniques are used for uranium recovery, these materials could be considered as man-made uranium ores. The IEBs discussed in this report were prepared to simulate Three Mile Island-2 core debris. The crushed IEBs were treated using three different methods simulating potential industrial scale processes. In one method the IEBs were fused with sodium hydroxide then the cooled mass leached first with water then with dilute sulfuric acid; about 52% of the uranium was recovered in this case. In the second method the IEBs were treated with a sulfuric acid/hydrogen peroxide lixiviant and about 13% of the uranium was recovered. In the third technique the IEBs were leached with a sodium carbonate/sodium bicarbonate/hydrogen peroxide solution. Only about 0.1% of the uranium was recovered. The results of these screening tests suggest that the IEBs can be successfully treated for recovery of the contained uranium. Other studies would be required to determine if other values, such as zirconium or silver, could be recovered from the IEBs.

Jan 1, 1984

By Deon van Tonder, Bert Van Hege

Comparison of various technologies for uranium recovery from sulphuric acid leach solutions shows that Resin-in-Pulp (RIP) and/or Solvent extraction (SX) based processing routes are usually cost effective (11). A combined RIP-SX recovery-purification route and a CCD-SX recovery-purification route were investigated and optimised. The design basis used for the investigation was a production rate of 200 kg/h U3O8 over a solution concentration range of 40 to 1500 mg/L U3O8. The OPEX for the RIP-SX processing route was found to be sensitive to the variation in uranium concentration in the leach liquor. One of the main drivers for this trend is the leach acid concentration. Conversely, the CAPEX of the CCD-SX processing route was sensitive to the uranium concentration in the leach liquor. The leach acid concentration only affected the OPEX of the CCD-SX processing route modestly, as the bulk of the acid is recovered in a pre-leach circuit. Contrary to expectation, the effect of extractant loss assumptions on the overall processing route economics was found to be modest to insignificant. It should be noted that the CCD-SX processing route OPEX was more sensitive to extractant loss assumptions than the RIP-SX processing route OPEX. Economic optimum wash ratios were determined for the CCD-SX processing route and increased with leach concentration ? the increase in wash ratio was less than proportional. A 5-stage CCD configuration was found optimal over the concentration range investigated.

Jan 1, 2007

By Catherine Cai

A granular sorbent, prepared by gel-coating polyethyleneimine (PEI) on high surface area silica followed by crosslinking with a low-molecular weight diepoxide, has significantly higher uranium capacity, greater salt tolerance, and faster kinetics than the commercial resin Dowex 21K. Though having lower U(VI)/Fe(III) selectivity than Dowex 21K, the gel-coated PEI affords much higher sorptions of both U(VI) and Fe(III) and also their separation by selective stripping with acid.

Jan 1, 1999

By A. Bhowmik

Uranium Refining is the process in which undesirable neutron absorbing elements such as Boron (B), Gadolinium (Gd), Cadmium (Cd), Europium (Eu), Samarium (Sm) and other heavy metals (Fe, Ni, Co, Ca, Mg etc.) are removed to make it nuclear pure. At present, Uranium refining is carried out by solvent extraction process by using organic based solvent e, g. TBP diluted with Kerosene. The above process generates lot of nitrate bearing liquid waste and degraded organic. In order to eliminate use of hazardous organic and ammonia for Uranium refining altogether, a new process has been developed. In the new process, Yellow Cake is dissolved in nitric acid and uranium peroxide hydrate is precipitated selectively from the solution leaving all the impurities in the solution by using commercial grade hydrogen peroxide at a pre-defined pH, U conc., temperature and stoichiometric quantity of hydrogen peroxide under mild agitation. The precipitate is filtered and washed with DM water to obtain nuclear pure product meeting purity standard as per ASTM C ? 753-99.The product is spray dried and calcined to obtain uranium oxide. The process eliminates use of organic, flammable, toxic chemicals, consumes less quantity of nitric acid and uses environfriendly chemical hydrogen peroxide. The process is simple and can be integrated in the mill. A patent application is entering national phase in several countries including CANADA and abstract/full paper is available in WIPO publication no: WO/2009/013759.

Aug 1, 2010

By N. C. J. Dempers, J. A. L. Parker, R. A. Wildenboer

More than half of global cobalt reserves are located in the Southern African Copperbelt, stretching over the northern tip of Zambia and southern area of the Democratic Republic of Congo. In these areas, cobalt is not typically produced as a primary product but as a byproduct of copper production. Ores from this region often contain uranium, which is readily leached under typical copper leach conditions and enters the process. Uranium does not pose a challenge to copper production, but it becomes a significant problem when it follows cobalt to the cobalt precipitation process and results in unacceptably high levels of U in the final Co product. This paper evaluates the existing process technologies that can be used to remove uranium from cobalt-bearing process streams, including phosphate precipitation and ion exchange. Advantages and disadvantages of the uranium removal processes are discussed, and important design considerations are highlighted.

Jan 1, 2023

By Jr. Koch

In the Hydrogeochemical and Stream Sediment Reconnaissance (HSSR) phase of its National Uranium Resource Evaluation (NURE) pro¬gram, the U.S. Department of Energy (DOE) samples about 1400 sites for stream sediments in each two-degree quadrangle of the National Topographic Nap Series (NTMS) and about 1200 sites for ground or stream water. Through a geological/statistical analysis, we find that NURE data are useful for assessing the uranium resources of the NTMS quadrangles. Our computer-implemented System for Uranium Resource Evaluation (SURE) calculates a score for each NTMS quadrangle based on the HSSR, geologic, and radiometric data; we score the four Colorado quadrangles--Pueblo, Montrose, Durango, and Trinidad--that comprise the study area. We interpret the scores in terms of geology and the known occurrences, which include the Hanson ore deposit with reserves of 30,000,000 lbs. U308 and the Pitch mine with reserves of 1,740,000 lbs. SURE depends in part on distinguishing mineralized or metalliferous granitoids from barren ones through "geochemical signatures."

Jan 1, 1980

By Lynn C. Jacobsen

Among the unforeseen consequences of the 1973 Arab oil embargo has been a considerable array of new or increased taxes on the so-called energy minerals. These taxes will be the subject of this report. Both Federal and State taxes have been enacted, but I will be concerned mostly with state severance taxes and particularly those on uranium. Severance taxes are considered to include all taxes having the distinctive feature of being applied on a natural resource at the stage of extraction. The tax may be based on units of production or on value, and if on values it may be on gross value or on gross value less either arbitrary or cost-related deductions. The tax has a number of aliases - resource excise tax, conservation tax, privilege tax, mining excise tax, ad valorem production tax, and more - and this makes comparison of tax burdens among states difficult. The windfall profit tax on oil is an example of a severance tax at the Federal level. Severance taxes are an established feature of state tax systems, but they continue to be a controversial issue, and proposals to raise or modify existing severance taxes are regularly submitted to the legislatures of the Western energy producing states. No concensus exists as to what is a reason- able and proper level of severance taxation or to the form it should take. The taxes which have been adopted by the various states reflect the interaction of a variety of interests and the specific circum- stances in each state. What follows is a summary of theoretical, practical, and emotional viewpoints and arguments that surface in any statehouse in which a severance tax bill has been introduced. The New Mexico experience will be heavily relied upon. THE ECONOMISTS Marginal effects. A severance tax which is based on a gross percentage of revenue or on units of production is a constant addition to variable costs, and to the mine operator has the same effect as any other increase in operating costs. The direction of these effects is straightforward: the tax will cause the property to have a lowered present value, to be mined at a lower rate than without the tax, raise the minimum grade that will be mined, lead to lower total recovery, make marginal properties sub-marginal and discriminate in favor of richer, more profitable operations (Lockner, 1965; Steele, 1967). In the short run, production facilities are fixed and imposition of a severance tax will have little effect on production levels. In the longer term, capital is mobile and investment and exploration expenditures will shift from minerals and jurisdictions with high taxes to those with low taxes. Over a considerable range of taxation the effect will be to change the relative position of the taxing state, but an overly optimistic evaluation of the capacity of mineral producers to absorb a tax can bring an industry to a halt. It is generally acknowledged that imposition of high severance taxes on taconite in Minnesota stopped development completely, and that only the adoption of a constitutional amendment limiting the amount of taxes that could be imposed in the future brought the firms back and encouraged them to make the huge investments required (Weaton, 1969). A tax which is a percentage of the net operating income (gross revenue less cash operating costs) does not influence the cut-off grade for recovery nor change the time preference for extraction, and hence, is free of the negative features of the tax applied to gross revenues or units of production. In theory it is a more efficient tax but relative administrative complexity and inherent difficulty in predicting revenue have discouraged its use. The Wyoming severance tax on uranium, which uses grade of ore as well as price in establishing taxable value, is the most cost related, and hence, the most neutral and efficient of the various state severance taxes on uranium. Economic rent. Despite the discrimination and the anti-conservation aspect inherent in most severance taxes, economists generally endorse their use because they are seen as a vehicle to appropriate rents - that is, returns greater than the long-run competitive supply price. Conspicuous examples of supposed economic rents are the returns to oil producers because of the OPEC cartel, the returns of the uranium producers under AEC buying contracts in the 19501s, and the high prices obtained by the uranium producers for contracts entered into in the 1976-1979 period. Mining of coal in the Western states is believed by some to generate huge economic rents because of the OPEC caused increase in price of a competitive fuel (McLure, 1978, p. 261), and possibly because of clean air regulations favoring the burning of low-sulfur coal. In theory, such surplus returns could be taxed completely away without affecting supply. In practice, the situation is more complex (Steele, 1967, pp. 234-236); economic rent of mineral production is an elusive quantity involving as it does replacement costs, and technical and market risk, and it, like beauty or pornography, probably exists mostly in the eye of the beholder. Rent may also be perceived to be present in the upper portion of a cyclic market which also has a downside. Where rent exists, it is almost certain to be short-lived - cartels self- destruct, government subsidies end, competitive adjustments occur - but the taxes imposed to capture it tend to be immortal. There is little doubt that the perception of un- usual and undeserved (obscene) profits in the mid- and late 1970's was a major factor in the adoption of energy mineral taxes strikingly higher than had been previously considered. At the New Mexico legislature of 1977 supporters of a moderate tax were repeatedly confronted with some variant of the statement, "You can't expect me to believe that a

Jan 1, 1982

By G. Kordosky, A. Feather, M. Virnig, P. Crane

Introduction The post World War II nuclear arms race and interest in nuclear power generation resulted in a significant demand for uranium in the 1950’s. This led to the development of uranium solvent extraction technology and uranium became the first metal to be recovered on a large scale by solvent extraction (SX) (1), interestingly more than 100 years after the extraction of uranium from an acid nitrate solution using diethyl ether was first reported by Peligot.(2) For a variety of reasons discussed elsewhere (3,4) there have been upheavals in the supply demand picture and price for uranium since the 1960’s. (Figure 1) The low price of uranium from the mid 1980’s until 2004 resulted in a depression of new resource exploration and mine development along with uranium mine / mill closures and decommissioning. People with skills in uranium processing could not find suitable employment and many experienced engineers and metallurgists took jobs elsewhere or retired. This resulted in a significant brain drain with respect to uranium processing technology.

Jan 1, 2007