3

Uranium Occurrences,
Resources, and Markets

Key Points

• Of the localities in Virginia where existing exploration data indicate that there are significant uranium occurrences, predominantly in the Blue Ridge and Piedmont geological terrains, only the deposits at Coles Hill in Pittsylvania County appear to be potentially economically viable at present.

• Because of their geological characteristics, none of the known uranium occurrences in Virginia would be suitable for the in situ leaching/in situ recovery (ISL/ISR) uranium mining/processing technique.

• In 2008, uranium was produced in 20 countries; however, more than 92 percent of the world’s uranium production came from only eight countries.

• In general, uranium price trends since the early 1980s have closely tracked oil price trends. The Chernobyl (Ukraine) nuclear accident in 1986 did not have a significant impact on uranium prices, and it is too early to know the long-term uranium demand and price effects of the Fukushima (Japan) accident.

• Existing known identified resources of uranium worldwide, based on present-day reactor technologies and assuming that the resources are developed, are sufficient to last for more than 50 years at today’s rate of usage.



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3 Uranium Occurrences, Resources, and Markets Key Points • Of the localities in Virginia where existing exploration data indicate that there are significant uranium occurrences, predomi- nantly in the Blue Ridge and Piedmont geological terrains, only the deposits at Coles Hill in Pittsylvania County appear to be potentially economically viable at present. • Because of their geological characteristics, none of the known uranium occurrences in Virginia would be suitable for the in situ leaching/in situ recovery (ISL/ISR) uranium mining/processing technique. • In 2008, uranium was produced in 20 countries; however, more than 92 percent of the world’s uranium production came from only eight countries. • In general, uranium price trends since the early 1980s have closely tracked oil price trends. The Chernobyl (Ukraine) nuclear accident in 1986 did not have a significant impact on uranium prices, and it is too early to know the long-term uranium demand and price effects of the Fukushima (Japan) accident. • Existing known identified resources of uranium worldwide, based on present-day reactor technologies and assuming that the resources are developed, are sufficient to last for more than 50 years at today’s rate of usage. 54

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55 URANIUM OCCURRENCES, RESOURCES, AND MARKETS T his chapter contains a brief description of the wide variety of geological settings that host uranium deposits worldwide, and then a more spe- cific description of known uranium occurrences in the Commonwealth of Virginia. This latter section also notes the exploration status and a first-order indication of the exploitation potential of existing uranium resources in Virginia. The final section in this chapter describes uranium resource and reserve concepts, and reviews global and national uranium market trends. WORLDWIDE OCCURRENCES OF URANIUM Uranium deposits are known to occur as a result of a wide range of processes, from magmatic and fluid fractionation deep in continental crust to evaporation at the Earth’s surface (Box 3.1; Figure 3.2). The resulting concentrations of uranium within different rock types have an equally broad range, from a fraction of a part per million in ultramafic rocks up to 76 ppm in phosphorites (Lassetter, 2010; see Table 3.1). Uranium deposits have been mined with the most extreme range of grade (from about 1 × 102 grams/tonne of uranium for the phosphates of Florida, to nearly 2 × 105 grams/tonne of uranium in the unconformity-related McArthur River deposit in Canada) and tonnage (from a few tonnes for some intragranitic veins in the French Massif Central to nearly 2 million tonnes of uranium (tU) in Australia’s Olympic Dam deposit). IAEA Classification of Uranium Deposits The International Atomic Energy Agency (IAEA) has classified uranium resources—on the basis of their geological setting and morphology—into a num - ber of ore deposit types (IAEA, 2009). These are presented here in order of their approximate global economic significance: Unconformity-Related Deposits These deposits are spatially related to an unconformable contact separating crystalline basement from an overlying thick siliciclastic sediment sequence, with the deposits occurring at the contact level, and/or below or above the contact. Two subtypes of unconformity-related deposits are recognized (IAEA, 2009): • Fracture controlled, dominantly basement-hosted deposits (e.g., McArthur River, Rabbit Lake, and Eagle Point in Canada; Jabiluka, Ranger, Nabarlek, and Koongarra in Australia) • Clay bounded, massive ore developed along and just above, or immedi- ately below, the unconformity in the overlying cover sandstones (e.g., Cigar Lake and Key Lake in Canada)

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56 URANIUM MINING IN VIRGINIA BOX 3.1 Chemical and Physical Properties of Uranium and Geological Processes Uranium is the heaviest and last naturally occurring element in the periodic table, with an atomic number of 92 and an atomic mass of 238. Because of its large ionic radius and high charge, uranium does not enter in the structure of major rock-forming minerals, and consequently is continuously enriched in melts either during magmatic processes such as partial melting or fractional crystalliza- tion. As a result, the most fractionated magmas—which are generally the richest in silica—are the most enriched in uranium; granites and rhyolites are much richer in uranium than mafic igneous rocks such as basalts or gabbros. In igneous rocks, uranium is associated with enriched thorium (Th), zirconium (Zr), titanium (Ti), niobium (Nb), tantalum (Ta), and rare earth elements (in minerals such as zircon, apatite, monazite, titanite, allanite, uraninite, etc.), particularly in peralkaline rocks but less so for metaluminous rocks and much less for peraluminous rocks. Levels of uranium in common sedimentary rocks are closely related to the oxidation-reduction conditions. The highest concentrations (tens to hundreds of parts per million [ppm]a) are found in sediments that are rich in organic matter or phosphate. Lower uranium contents are generally recorded in coarse-grained sediments, and higher values in clay-rich sediments. Uranium in nature occurs in two main oxidation states, U4+ and U6+. The U4+ state is stable in reducing conditions, weakly soluble in most geological conditions, and is the main valence occurring in uranium ore minerals (dominantly tetravalent uranium minerals). U6+ forms the uranyl UO22+ species, which is stable in oxidizing conditions and forms a large series of complexes (hydroxides, carbonates, sulfates, phosphates, etc.) which are very soluble in geological fluids. The uranyl species enters into the structure of hexavalent uranium minerals, which are also called secondary uranium minerals because they commonly result from the oxidation of tetravalent uranium minerals by interaction with oxygen-bearing surficial waters. Uranium minerals are extremely diverse. Approximately 5 percent of all known minerals contain uranium as an essential structural constituent (Burns, 1999), al- though many of the hundreds of uranium-bearing minerals are rarely encountered mineral “curiosities.” Among the tetravalent uranium minerals, the two principal ones occurring in ore deposits are uraninite, with a UO2+x composition (called pitchblende when occurring with a colloform texture), and coffinite (USiO4). Other common tetravalent minerals that generally contain several percent to sev- eral tens of percent of uranium are uranothorite (Th,U)SiO4, brannerite (U,Ca,Ce) (Ti,Fe)2O6, ningyoite (U,Ca,Ce)2(PO4)2·1.5H2O, Nb-Ta-Ti minerals such as uran- microlite (U,Ca,Ce)2(Nb,Ta)2O6(OH,F), uranpyrochlore (U,Ca,Ce)2(Ta,Nb)2O6(OH,F), euxenite (Y, Er, Ce, La, U)(Nb, Ti, Ta)2(O,OH)6, and can be also associated with organic matter in thucolite. Hexavalent uranium minerals are less abundant in ore deposits, but are the most diverse. They are highly colored and can be de- posited either as primary ore minerals such as carnotite K2(UO2)2(VO4)2·3H2O, tyuyamunite Ca(UO2)2(VO4)2·3H2O, or more commonly as alteration products of tetravalent uranium minerals such as autunite Ca(UO2)2(PO4)2·10H2O or uranophane Ca(UO2)2SiO3(OH)2·5H2O.

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57 URANIUM OCCURRENCES, RESOURCES, AND MARKETS Uranium also occurs as a minor constituent in accessory minerals such as zircon (Zr,U)SiO4, monazite (LREE,Th,U)PO4, xenotime (Y,HREE,U) PO4, b astnaesite (LREE)CO3F, and others. More comprenhensive information about uranium minerals is provided in Burns (1999), Finch and Murakami (1999), and Krivovichev et al. (2006). Aqueous Geochemistry of Uranium Uraninite and most other common uranium minerals are only sparingly soluble in water at neutral pH, low temperatures, and reducing conditions. The solubility of uraninite increases markedly in oxidizing conditions in the presence of anions such as OH–, F–, Cl–, CO32– SO42–, and PO43–, which form strong complexes with UO22+ (e.g., Langmuir, 1978; Guillaumont et al., 2003). These complexes consid- erably enhance the mobility of uranium in groundwater. For example, uranium is readily soluble in the strongly acidic, oxidizing water commonly associated with acid mine drainage because UO22+ sulfate complexes are stable below pH 4 (for a recent review of available data, see Kyser and Cuney, 2008). In oxidized fluids between pH 4 and 7.5, uranyl phosphate complexes become the important spe- cies with concentrations of only 0.1 ppm PO4. At higher pH, uranyl hydroxide or uranyl carbonate complexes predominate. As a result, sulfuric acid with pH of about 1 is used for in situ recovery in roll-front-type deposits (e.g., in Kazakhstan) and sodium carbonate solutions with an oxidant are used for in situ leaching of uranium in sandstone deposits in the Unites States. In reduced groundwater, at very low pH, only fluoride complexes of U4+ are significant; only at very high pH are uranyl hydroxides the dominant species, whereas at intermediate pH (between 4 and 8) uraninite solubility is extremely low (Langmuir, 1978). Eh-pHa diagrams are a convenient way of visually summarizing the dominant aqueous speciation and mineralogy of redox-sensitive elements, such as uranium. The diagrams are constructed in a systematic way using a defined set of assump- tions, initial conditions, chemical reactions for the system of interest, and the accom- panying thermodynamic data. The final diagram depends on all of these factors; therefore, a very large number of Eh-pH diagrams could be constructed for uranium alone. They only depict equilibrium relationships, and the user must bear in mind that natural waters are commonly not at equilibrium. Nevertheless, these diagrams are a useful and enduring tool in the study and interpretation of natural waters. A generic example of an Eh-pH diagram for the U–O2–H2O–CO2 system at 25°C is shown in Figure 3.1, assuming PCO = 10−3.5 atm (equilibrium with atmospheric 2 CO2) and the median major ion composition of groundwater (Table 8.8 in Langmuir, 1997). The thermodynamic data were from the extensive reviews of Grenthe et al. (1992) and Guillaumont et al. (2003). Fields represent the range of Eh and pH conditions where each form dominates, that is, constitutes more than 50 percent of the uranium in the system, but neighboring forms will also be present. The bound- aries separating the fields indicate where neighboring forms are present at equal concentration (strictly speaking, equal activity). The diagonal dashed lines at the top and bottom of the figure delineate the stability field of liquid water as a func- tion of Eh and pH. In the large blue field in the upper left, the uranyl cation (UO22+)

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58 URANIUM MINING IN VIRGINIA BOX 3.1 Continued (A) UO2OH+ Soddyite 1 [(UO2)2SiO4•2H2O] Haiweeite [Ca(UO2)2(Si2O5)3•5H2O] UO22+ .5 Eh (volts) UO2(CO3)34- 0 Uraninite [UO2] U(SO4)2(aq) U(CO3)56- –.5 0 2 4 6 8 10 12 14 pH (B) UO2OH+ Soddyite 1 [(UO2)2SiO4•2H2O] Haiweeite [Ca(UO2)2(Si2O5)3•5H2O] UO22+ .5 Eh (volts) Ca2UO2(CO3)3(aq) 0 Uraninite [UO2] U(SO4)2(aq) U(CO3)56- –.5 0 2 4 6 8 10 12 14 pH FIGURE 3.1 Eh-pH diagram for the U–O2–H2O–CO2 system at 25°C assuming PCO = 10−3.5 atm (equilibrium with atmospheric CO2) and the median major ion 2 composition of groundwater (Table 8.8 in Langmuir, 1997). The fields shaded blue represent species dissolved in water (aqueous species) while the fields shaded tan represent solid mineral phases. The diagonal dashed lines at the top and bottom of the figure delineate the stability field of liquid water. Thermo- dynamic data are from Grenthe et al. (1992) and Guillaumont et al. (2003). UIV–SII species were not considered in this diagram. SOURCE: Committee- generated using The Geochemist’s Workbench® (Bethke, 2010). would dominate uranium speciation at equilibrium. In that same field, some of the hydrolysis product UO2OH+ would also be present, but at lower concentrations than UO22+. Uraninite, a poorly soluble mineral of tetravalent—or reduced—uranium, occupies the large tan stability field at the bottom center of the diagram. aEh represents the oxidation-reduction potential of a solution.

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59 URANIUM OCCURRENCES, RESOURCES, AND MARKETS T °C Calcretes/Lignite/Coal Magmatic 25 Conglomerates Volcanic ( (crystal. fract) . , transpor osion t, d Phosphates , er ep on os ti itio Black Shales ra PAk IOCG(U) alte n Basal HKCa HKCa 10 0 Rollfront Upper cont. crust Sedimentary Tabular Igneous 2.7 ppm U Rocks Veins lting Rocks Tectonolithologic antle melting Breccia Pipes tasomatism & me PAl PAl 20 0 . exhumation CONTINENTAL - cryst. fract diagenesis, m Unconformity CRUST LT elting egree of m 30 0 Metamorphic 1.4 ppm U - tling ion stal m Na- etam tal m n of 400 Mantle me ns cru bductio me metasomatism te su orp ate ex Low d s Continental Collision al Cru ti 60 0 hi HT r Pa s m Metamorphic Metamorphic PAl PAl ria Alaskites 80 0 Rocks l Enriched mantle MANTLE HKCa HKCa Primitive Mantle: 21ppb PAk PAk Depleted mantle Carb. chondrites: 7ppb FIGURE 3.2 Schematic diagram illustrating the very wide range of geological processes that have resulted in uranium deposits. Average uranium concentrations of the main ura - nium reservoirs—the mantle (in blue), the crust (in yellow), and the upper crust are given. The circular arrows indicate the evolution of the geological cycle from surficial processes (alteration, erosion, transport by river and deposition) that produce sedimentary rocks, to deeper processes (burial of sedimentary rocks with increasing temperature and pressure) that produce metamorphic rocks; some of these rocks may be injected into the mantle during subduction. Increasing temperature leads to melting of the rocks in the continental crust and/or in the mantle and the genesis of plutonic and volcanic rocks that are injected in the Earth’s crust. Three main types of magmas can be enriched in uranium: PAl: per- aluminous magmas resulting from the partial melting of sedimentary rocks (PAl); highly potassic calc-alkaline magmas resulting from the partial melting of a mantle contaminated by subducted sediments (HKCa); and peralkaline magma resulting from very low degree of partial melting of a mantle, which can be contaminated (Pak). The main message in the schematic is the extreme variability of possible host rocks and concentration processes that can lead to potentially exploitable uranium deposits. SOURCE: Modified from Cuney (2009).

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60 URANIUM MINING IN VIRGINIA TABLE 3.1 Global Averaged Uranium and Thorium in Different Rock Types Uranium Content Thorium Content Thorium/Uranium Rock Type (ppm) (ppm) Ratio Ultramafic 0.01 0.05 3.6 Basalt 0.4 1.6 4.0 Gabbro 0.8 3.8 4.7 Granite 4.8 21.5 4.5 Nepheline syenite 14 48 3.4 Granulite 1.6 7.2 4.5 Granitic gneiss 3.5 12.9 3.7 Sandstone 1.4 5.5 3.9 Shale 3.2 11.7 3.7 Carbonate 2.2 1.2 0.5 Carbonaceous shale 8.0 1.7 0.2 Marine phosphorite 76 <1 Upper Crust Average 2.5 10 4 10–5 Seawater 0.003 0.0002 SOURCE: Modified from Lassetter (2010); compiled from Rogers and Adams (1969), Woodmansee (1975), Gabelman (1977), and Rose et al. (1979). These are the highest grade deposits in the world (generally higher than 1 percent uranium, and up to 20 percent for the McArthur River deposit). Their tonnages vary from some thousands of tonnes of uranium (tU) to more than 200,000 tU. Sandstone Deposits These deposits occur in medium- to coarse-grained sandstones deposited in continental fluvial or marginal marine sedimentary environments. The uranium is precipitated under reducing conditions associated with carbonaceous material, and/or sulfides, and/or hydrocarbons, and/or iron-magnesium minerals, dissemi - nated within the sandstone. Four main subtypes are distinguished: • Roll-front deposits. Uranium mineralized zones are crescent-shaped in cross section, sinuous horizontally, and localized between reduced sandstone on the hydrological gradient downside and oxidized sandstone on the hydrological gradient upside. Resources range from a few hundred tonnes to several tens of thousands of tonnes of uranium, at grades from 0.015 percent to 0.25 percent. Examples are Moynkum, Inkay, and Mynkuduk in Kazakhstan; and Crow Butte and Smith Ranch in the United States. • Tabular deposits. Uranium minerals impregnate the sandstone matrix within tabular, irregularly shaped, lenticular masses within reduced sediments.

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61 URANIUM OCCURRENCES, RESOURCES, AND MARKETS Individual deposits contain several hundreds of tonnes up to 200,000 tonnes of uranium, at average grades ranging from 0.05 percent to 0.5 percent, and occa - sionally up to 1 percent. Examples of such deposits include the Colorado Plateau in the United States; and Akouta, Arlit, and Imouraren in Niger. • Basal channel deposits (paleovalleys). Uranium minerals are depos- ited within permeable alluvial-fluvial sediments that fill channels incised into uranium-rich basement granites, and generally sealed by basalt flows. Individ - ual deposits can range from several hundreds to 20,000 tonnes of uranium, at grades ranging from 0.01 percent to 3 percent. Examples are the deposits of Dalmatovskoye (Transural Region) and Khiagdinskoye (Vitim district) in Russia. • Tectonic/lithologic deposits. Uranium mineral precipitation is controlled both by the lithology and by tectonic structures. Individual deposits contain a few hundreds to 5,000 tonnes of uranium at grades of 0.1 percent to 0.5 percent. An example is the deposit of Mas Laveyre in France. Hematite Breccia Complex Deposits These deposits occur in hematite-rich breccias, where the uranium minerals are associated with copper, gold, silver, and rare earths. The only representative of this type of deposit presently being mined is Olympic Dam in South Australia. This is the largest mined uranium deposit in the world, with reasonably assured resources (defined below) recoverable at less than US$80/kg U of more than 1.2 million tU (GA/ABARE, 2010). Quartz Pebble Conglomerate Deposits Detrital uraninite is deposited, together with pyrite and gold, in monomictic (only quartz pebbles) conglomerates that are the basal units of fluvial to lacustrine braided stream systems older than 2.4 Ga. Examples include the Witwatersrand Basin in South Africa, where uranium is mined as a byproduct of gold (0.02 to 0.05 percent uranium grade), and the Blind River/Elliot Lake area in Canada which has higher grades (0.1 to 0.15 percent uranium), where only uranium was mined. Vein Deposits (Granite-Related Deposits) The major component of the mineralization fills fractures associated with strike-slip extension. The veins consist of gangue material (e.g., carbonates, quartz) and uranium minerals. Typical examples range from pitchblende veins (e.g., Pribram in the Czech Republic, Schlema-Alberoda in Germany), to stock - works and episyenite columns (e.g., Bernardan in France), to narrow cracks in granite or metamorphic rocks (e.g., Mina Fe in Spain, Singhbhum in India). Individual deposits contain from a few hundreds of tonnes to 80,000 tonnes of uranium at grades of 0.05 percent to 0.6 percent.

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62 URANIUM MINING IN VIRGINIA Intrusive Deposits These deposits are associated with intrusive or anatectic rocks (alaskite, granite, monzonite, peralkaline syenite, carbonatite, and pegmatite). Examples include the Rossing alaskites in Namibia, very-low-grade uranium as a byproduct of porphyry copper deposit mining (such as Bingham Canyon in the United States), the Ilímaussaq lujavrites in Greenland, and the Palabora carbonatite in South Africa. Volcanic- and Caldera-Related Deposits These deposits are associated with volcanic caldera that are infilled with mafic to felsic volcanic complexes and intercalated clastic sediments. Miner- alization is largely structural-controlled (minor stratabound), occurs at several stratigraphic levels of the volcanic and sedimentary units, and extends into the basement where it is found in fractured granite and in metamorphic rocks. Ura - nium minerals are commonly associated with molybdenite and fluorite. Individual deposits contain from a few hundreds of tonnes to 37,000 tonnes of uranium at grades of 0.1 percent to 0.3 percent. The most significant deposits of this type are located in Russia (Streltsovska district), China (Xiangshan), and Mongolia (Dornot). Metasomatic Deposits The largest deposits of this type occur in Precambrian shields, where they are related to crustal-scale shear zones along which different types of base- ment rocks—granites, migmatites, gneisses, and banded iron formations—are desilicified and subject to sodium-metasomatism with production of albitites, aegirinites, and carbonaceous-ferruginous rocks. Ore lenses and stocks are a few meters to tens of meters thick, and some are hundreds of meters long. The vertical extent of ore mineralization, mostly brannerite and uraninite, can be more than 1.5 km. Individual deposits contain from a few hundreds of tonnes to 80,000 tonnes of uranium at grades of 0.08 percent to 0.3 percent. Examples include the Michurinskoye and Zheltorechenskoye deposits in Ukraine, and Lagoa Real and Itataia in Brazil. Surficial Deposits Surficial uranium deposits result from young (Tertiary to Recent) near- surface uranium mineral deposition in sediments and soils. The largest deposits are paleovalleys filled with poorly sorted siliciclastic rocks in which calcretes (carbonate concretions) are formed in arid to semiarid climatic conditions as a result of evaporation. Individual deposits contain from a few hundreds of tonnes

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63 URANIUM OCCURRENCES, RESOURCES, AND MARKETS to 65,000 tonnes of uranium at grades of 0.012 percent to 0.13 percent. The main deposits are in Australia (Yeelirrie) and Namibia (Langer Heinrich and Trekopjje). Surficial uranium deposits also can occur in peat bogs and soils. Collapse Breccia Pipe Deposits The breccia pipes are vertical, circular, and result from karst limestone dis- solution; they are infilled with fragments derived from the gravitational collapse of overlying formations. The uranium minerals occur in the permeable breccia matrix and in the arcuate, ring-fracture zone surrounding the pipe. Individual deposits contain from a few hundreds of tonnes to a few thousands of tonnes of uranium at grades of 0.16 percent to 0.85 percent. Type examples are the deposits in the “Arizona Strip” north of the Grand Canyon. Phosphorite Deposits These deposits consist of synsedimentary stratiform marine phosphorites deposited on the continental shelf. The uranium is hosted by apatite, and can be recovered as a byproduct of phosphoric acid production. Phosphorite deposits con- stitute large uranium resources, but at a very low grade. Individual deposits contain from tens of thousands of tonnes to more than 3 million tonnes of uranium at grades of 0.01 percent to 0.03 percent. Examples include the pebble phosphate deposit of New Wales in Florida, and Gantour in Morocco. Some phosphorite deposits consist of argillaceous marine sediments rich in uraniferous fish remains (e.g., Melovoe in Kazakhstan). Other Deposits The following deposits are of lesser importance • Metamorphic deposits. The concentration of uranium directly results from metamorphic processes. The age of uranium deposition and the tempera - ture and pressure at which it occurred are similar to those of the enclosing rocks. Examples include the Forstau deposit in Austria and the Mary Kathleen deposit in Australia. • Limestone and paleokarst deposits. An example includes uranium miner- alization in the Jurassic Todilto Limestone in the Grants district of New Mexico, where uranium oxides occur in intraformational folds and fractures. • Coal deposits. Elevated uranium contents occur in lignite/coal and in clay and sandstone immediately adjacent to lignite/coal. Examples are the Serres Basin in Greece, and occurrences in North Dakota. Uranium grades are very low, averaging less than 50 ppm of uranium.

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64 URANIUM MINING IN VIRGINIA Rock Types with Elevated Uranium Contents Rock types with elevated uranium content include granites and black shales. No deposits have been mined commercially in these types of rocks; grades are very low, and it is unlikely that these types of uranium accumulations would become economic in the foreseeable future on their own, although uranium can be extracted as a byproduct if other associated elements reach economic concen - trations (see below). “Unconventional” Uranium Deposits The IAEA has defined uranium “unconventional resources” as resources from which uranium can only be recovered as a minor byproduct, such as the uranium associated with phosphorites, nonferrous ores, carbonatites, black shales, lignite, and seawater. However, this definition may evolve depending on uranium prices and technological improvements, and some of these resources—such ura - nium in black shales or phosphorites—may become a significant resource in the future. Other major nonconventional resources are the following: • Several projects are being developed (many in South Africa, and also in the Czech Republic, Kyrgyzstan, and Tajikistan) for reprocessing the tailings produced during previous uranium or other metal extraction. For example, Rand Uranium is currently determining the feasibility of reprocessing tailings to extract gold and uranium in the Randfontein/Westonaria region, Witwatersrand, South Africa. • About 1,100 tU have been recovered from lignite ash produced from 1964 to 1967 in North Dakota. In China, there is testing of uranium extraction from coal ash produced by the burning of lignite coal. • Uranium may be extracted from monazite recovered from sand placers, if rare earth elements (REE) and thorium production from this resource restart in the future. Monazite from sand placers typically contains several thousand parts per million of uranium. • Uranium has been recovered from porphyry copper operations in the United States and Chile that have very low uranium grade (tens of parts per mil- lion), and it is likely that other ore deposits that are presently being mined also contain significant levels of uranium. Recently, the Talvivaara nickel-zinc mine in Finland, with 15-20 ppm uranium in the ore, announced production of about 350 tU per year from the leach solution. • Tens of tonnes of uranium are produced each year from water treat- ment processes associated with the management of former uranium mines and tailings.

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85 URANIUM OCCURRENCES, RESOURCES, AND MARKETS FIGURE 3.17 Mineral resource and reserve flow diagram. Certainty is improved moving down and to the right. SOURCE: Courtesy of Committee for Mineral Reserves International Reporting Standards. requirement for a competent person to define the resource/reserve. Although there have been discussions between SME and SEC regarding the adoption in the United States of the internationally standardized set of guidelines, at present the Industry Guide 7 remains in effect for public reporting of mineralized materials and reserves. ahttp://www.sec.gov/about/forms/industryguides.pdf. bhttp://www.cim.org/committees/NI_43-101_Dec_30.pdf. chttp://www.crirsco.com/background.asp. dhttp://www.sec.gov/about/forms/industryguides.pdf. sufficient to last for more than 50 years at today’s rate of usage—a figure higher than for many widely used metals. However for these resources to be developed, a range of challenges will have to be addressed: • Financial. For example, Australia has by far the largest RAR of uranium in the world (Figure 3.19), but a large part correspond to the huge Olympic Dam deposit where uranium production is relatively small (about 4,000 tU) because it is tied to the production of copper and gold. The grade of the deposit (about 250 ppm U) does not permit uranium to be mined for its own value. A four- to

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86 TABLE 3.3 Worldwide Uranium Resource Quantities for Different Production Cost Ranges and Different Degrees of Confidence, as of January 2009 Identified Resources (RAR + Inferred Resources) Reasonably Assured Resources Inferred Resources Cost short tons tonnes short tons tonnes short tons tonnes <$18/lb U <$40/kg U 877,881 796,400 628,207 569,900 249,784 226,600 <$36/lb U <$80/kg U 4,124,739 3,741,900 2,773,525 2,516,100 1,351,213 1,225,800 <$59/lb U <$130/kg U 5,956,890 5,404,000 3,885,537 3,524,900 2,071,353 1,879,100 <$118/lb U <$260/kg U 6,951,506 6,306,300 4,414,206 4,004,500 2,537,300 2,301,800 SOURCE: NEA/IAEA (2010).

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87 URANIUM OCCURRENCES, RESOURCES, AND MARKETS TABLE 3.4 U.S. Uranium Resources in the Reasonably Assured Resources Category for Different Cost Ranges, as of January 2009 Cost Reasonably Assured Resources $/lb U $/kg U short tons tonnes <18 <40 0 0 <36 <80 42,990 39,000 <59 <130 228,619 207,400 <118 <260 520,401 472,100 SOURCE: NEA/IAEA (2010). FIGURE 3.18 Increased cost of uranium production over time that will be required to meet projected increases in demand. SOURCE: Modified from IAEA (2001). fivefold increase in uranium production from the Olympic Dam deposit will require an investment of about 15 billion Australian dollars. • Technical. Development of improved or new ore processing methodolo- gies will be required for production of uranium from complex ores (e.g., extrac - tion of uranium from phosphates, from refractory minerals in deposits associated with peralkaline rocks). • Political. Some countries or provinces have established bans on uranium exploration and mining.

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88 FIGURE 3.19 Reasonably Assured Resources of uranium in 2009 at the < $80/kg (< $36/lb) and < $130/kg (< $130/lb) cost points for the 12 major uranium mining countries (in tonnes). SOURCE: Compiled from NEA/IAEA (2010).

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89 URANIUM OCCURRENCES, RESOURCES, AND MARKETS • Security. Development of uranium mines in Niger is currently hampered by security issues in the northern part of the country. • Development duration. The time for development of a mine from the beginning of exploration until initial production has been steadily increasing (now averaging about 15 years). This problem is particularly sensitive at present because of several issues: After nearly 20 years of extremely low exploration rates all over the world and with widespread exploration only restarting since 2004, a new generation of geologists specializing in uranium exploration, as well as mining and metallurgical engineers specializing in uranium processing, will need to be educated; and tighter regulations for uranium mining have considerably increased the duration for the licensing of the new uranium mines. • Economics. Because of the present economic crisis, uranium spot prices are decreasing and fluctuating while the price of uranium production is continu - ously increasing. Uranium Production Uranium supply is partly from production of new ore from mining, and partly from secondary sources of already mined uranium. World uranium production in 2009 fulfilled 74 percent of world reactor requirements (57,061 short tons of U3O8 or 43,880 tU) out of the total requirement for 59,065 tU (76,808 short tons) of U3O8. The remaining 26 percent came from secondary sources such as existing stockpiles held by government and commercial entities, low enriched uranium from downblending of highly enriched uranium recovered from nuclear warheads (“Megatons to Megawatts”), and reenrichment of depleted uranium tails and spent fuel reprocessing (NEA/IAEA, 2010). Highly enriched uranium is about 97 percent 235U and has to be diluted about 25:1 with depleted uranium (or 30:1 with enriched depleted uranium) to reduce it to about 4 percent 235U for use in power reactors. From 1999 to 2013, when the program is projected to end, the dilution of 30 tonnes of highly enriched uranium is displacing about 9,000 tU mine production per year (NEA/IAEA, 2010). In the United States and Canada, the nuclear fuel cycle is an “open” or “once- through” system where spent nuclear fuel is not reprocessed. In France, Japan, and a few other countries, a “closed” fuel cycle is used. In a closed fuel cycle, the spent nuclear fuel is sent to reprocessing operations for the separation of waste products so that the plutonium and uranium can be used as recycled fuel in reactors (Dyck and Crijns, 2011). Reprocessed uranium from spent nuclear fuel accounts for approximately 2,000 to 2,500 tonnes (or 3.3 to 4.2 percent) displace - ment of natural uranium from mines (IAEA, 2007). There are no U.S. reprocess - ing plants currently in operation, and the one facility in Savannah River, South Carolina, is years away from completed licensing by the U.S. Nuclear Regulatory Commission (USNRC, 2011). The main spent fuel reprocessing plants operate in France and (until August 2011) in the United Kingdom, with capacity of

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90 URANIUM MINING IN VIRGINIA over 4,000 tonnes of spent fuel per year. Russia, Japan, Belgium, Germany, and Switzerland also recycle plutonium for mixed oxide (MOX) fuel elements, but to a lesser extent. The plutonium for MOX fuel can be obtained from spent fuel rods (as is the case in France) or from weapons-grade surpluses (as is the case in a possible U.S. MOX fuel scenario). About 200 tonnes of MOX are used each year, equivalent to about 1,700 tU from mines. Although uranium was produced in 20 countries in 2010, eight countries (Kazakhstan 33 percent, Canada 18 percent, Australia 11 percent, Namibia 8 per- cent, Niger 8 percent, Russia 7 percent, Uzbekistan 4 percent, and the United States 3 percent) account for more than 92 percent of the world’s uranium produc- tion. Only two countries—Canada and South Africa—produce enough uranium to meet domestic demand; conversely, other countries having no nuclear power generation capacity produce substantial quantities of uranium. Overall, world uranium primary production increased steadily for the decade to 2009 (Figure 3.20; Table 3.5), with Kazakhstan, Namibia, Australia, Russia, and Brazil showing marked increases between 2006 and 2009 to offset decreased production in Canada, Niger, the United States, and the Czech Republic (NEA/ IAEA, 2010). In North America, production is dominated by Canada, which produced 8,500 tU in 2008. In the United States, uranium was produced at six locations in the third quarter of 2011. White Mesa Mill, near Blanding, Utah, is the only conventional uranium processing facility currently operating in the United States, processing FIGURE 3.20 Production of uranium worldwide in metric tonnes and short tons from 1999 to 2009. SOURCE: WNA (2011b).

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TABLE 3.5 Production of Uranium in Tonnes of U3O8 from Mines Between 2003 and 2010 Country 2003 2004 2005 2006 2007 2008 2009 2010 Kazakhstan 3,300 3,719 4,357 5,279 6,637 8,521 14,020 17,803 Canada 10,457 11,597 11,628 9,862 9,476 9,000 10,173 9,783 Australia 7,572 8,982 9,516 7,593 8,611 8,430 7,982 5,900 Namibia 2,036 3,038 3,147 3,067 2,879 4,366 4,626 4,496 Niger 3,143 3,282 3,093 3,434 3,153 3,032 3,243 4,198 Russia 3,150 3,200 3,431 3,262 3,413 3,521 3,564 3,562 Uzbekistan 1,598 2,016 2,300 2,260 2,320 2,338 2,429 2,400 USA 779 878 1,039 1,672 1,654 1,430 1,453 1,660 Ukraine (est) 800 800 800 800 846 800 840 850 China (est) 750 750 750 750 712 769 750 827 Malawi — — — — — — 104 670 South Africa 758 755 674 534 539 655 563 583 India (est) 230 230 230 177 270 271 290 400 Czech Repub. 452 412 408 359 306 263 258 254 Brazil 310 300 110 190 299 330 345 148 Romania (est) 90 90 90 90 77 77 75 77 Pakistan (est) 45 45 45 45 45 45 50 45 France 0 7 7 5 4 5 8 7 Germany 104 77 94 65 41 0 0 0 Total world 35,574 40,178 41,719 39,444 41,282 43,853 50,772 53,663 41,944 47,382 49,199 46,516 48,683 51,716 59,875 63,285 Tonnes U3O8 Percentage of world demand 65 63 64 68 78 78 NOTE; 1 tonne of uranium = 1.1792 tonnes of U3O8. Estimated production for those countries that do not provide precise numbers to the IAEA are indicated by “est.” SOURCE: WNA (2011d). 91

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92 URANIUM MINING IN VIRGINIA ore from mines in Colorado, Utah, and Arizona.4 There are currently six ISL/ ISR operations in the United States—the Alta Mesa Project and the Hobson ISR Plant/La Palangana operation in Texas; the Crow Butte operation in Nebraska; and the Smith Ranch-Highland Operation and the Willow Creek Project in Wyo - ming (USEIA, 2011b).5 U.S. production increased markedly from 2003 to 2006 (Figure 3.21), but then slowed because of operational challenges and lower uranium prices with total production in 2008 of 1,492 tU (1,910 short tons); by 2010 production had risen to 1,921 tU (2,119 short tons) (USEIA, 2011a; NEA/ IAEA, 2010). Uranium Prices All mineral commodity markets tend to be cyclical, with sharp price rises and falls as a result of demand variability and perceptions of scarcity. The history of uranium price fluctuations has to be considered in two different periods. Before the 1970s, uranium prices were not controlled by the open market like other resources because the predominant use was by the military for nuclear weapons. As a result, uranium deposits were mined during this time without the economic costs of production being the top priority and with little consideration of the risks associated with uranium mining. From the early 1980s, uranium prices have essentially followed the fluctua- tions of oil prices (Figure 3.22). The 1970s’ oil crises led to a sharp increase of uranium prices in the mid-1970s. Then, as oil prices declined in the early eighties, there were depressed uranium prices for the 1980s and 1990s with spot prices well below the cost of production for most uranium mines. The Chernobyl nuclear accident in 1986 occurred during a period of continuous uranium price decline, and does not seem to have had a significant impact on uranium prices. During this time, the uranium market was dominated by the liquidation of inventories—both commercial and military—and by the low oil prices. As a result, the uranium price was depressed and production and exploration efforts were cut back. Spot uranium prices started to recover strongly late in 2003, coinciding with increased oil prices and dramatic increases in the demand for nuclear energy emerging from China, India, and Russia. Uranium prices reached a maximum during the summer of 2007, in part because of speculation. The economic crisis beginning in September 2007 again led to a decline of oil and uranium prices, but then oil and uranium prices slowly increased again until the Fukushima accident in Japan. Since the Fukushima accident, uranium prices have slowly declined from a maximum of $73 down to $49 per pound at the beginning of September 2011, although they had risen to $54 per pound 2 weeks later. The share prices of 4 Additional information on the White Mesa uranium mill and Dennison Mine operations is available at http://www.denisonmines.com/Document/Details/121; accessed December 2011. 5 http://www.eia.gov/uranium/production/quarterly/.

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93 URANIUM OCCURRENCES, RESOURCES, AND MARKETS FIGURE 3.21 U.S. uranium production data for 2004-2009, with estimated data for 2003. SOURCE: USEIA (2011a). FIGURE 3.22 History of monthly inflation-adjusted spot uranium prices and oil prices from 1974 to 2011, together with the major accidents at nuclear power plants. SOURCES: TradeTech (uranium) and U.S. Energy Information Administration (oil); inflation adjust - ment from U.S. Department of Labor’s Bureau of Labor Statistics.

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94 URANIUM MINING IN VIRGINIA smaller uranium companies have also been affected negatively by the Fukishima accident—with an average stock decline of 40 percent—because they are depen - dent on capital markets to raise money to explore for new deposits. The long-term price of uranium has been less affected, with a decline from pre-Fukushima levels of $70-$73 per pound down to $68 per pound. Short-term growth of the nuclear industry has continued—there were 62 reactors under construction worldwide before the Fukushima accident and there are still the same 62 reactors under construction today. In addition, there have been no reports of operating uranium mines shutting down. Germany has announced a decision to phase out its reliance on nuclear power by 2022, but this decision is very recent and there is uncertainty as to whether Germany will be able to maintain it in the future. For example, Sweden announced in 1980 that it would phase out nuclear energy, but changed its decision in 1997; and Germany’s decision in 2000 to phase out the use of nuclear energy was initially delayed in 2010. According to WNA (2011a), it is still too early to assess the full impact of the Fukushima accident on the world nuclear fuel market. Despite the permanent closure of a number of reactors in Japan and Germany and slowdowns in some programs in response to Fukushima, the WNA report notes that the global situa - tion for energy supply and demand remains effectively unchanged. Prospects for new nuclear facilities remain strong in China, India, South Korea, and the United Kingdom, and developments in the United States, China, India, and Russia will remain particularly crucial in determining nuclear’s overall role in global elec - tricity supply. Uranium does not trade on an open market like other commodities. Buyers (states or utilities) and sellers (states or mining companies) negotiate contracts privately and confidentially. Spot uranium prices—usually representing less than 20 percent of supply—are published by the independent market consultants Ux Consulting and TradeTech (e.g., Figure 3.22). Most trade is by 3- to 15-year term contracts with producers selling directly to utilities, although the price in these contracts is often related to the spot price at the time of delivery. Presently, about 435 reactors with a combined capacity of over 370 GWe require 65,500 tU (77,000 tonnes U3O8). Each GWe of increased capacity requires 400 to 600 tU for the first fuel load, followed by about 200 tU per year. The capacity is growing slowly, and the reactors are being run more efficiently. Also, many utilities are increasing the initial enrichment of their fuel (e.g., from 3.3 percent to more than 4.0 percent 235U), and then burning it longer or harder to have only 0.5 percent 235U left in the spent fuel (instead of 0.8 percent or more). As a consequence of increased efficiency, over the 20 years from 1970 there was a 25 percent reduction in uranium demand per kilowatt-hour output in Europe.

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95 URANIUM OCCURRENCES, RESOURCES, AND MARKETS FINDINGS AND KEY CONCEPTS The committee’s analysis of the distribution of uranium deposits in Virginia and worldwide, and uranium markets and reserves, has produced the following findings: Uranium deposits are formed by a wide variety of geological processes and in a wide range of geological environments. Of the localities in Virginia where existing exploration data indicate that there are significant uranium occur- rences, predominantly in the Blue Ridge and Piedmont geological terrains, only the deposits at Coles Hill in Pittsylvania County appear to be potentially eco- nomically viable at present. The resources and grades of the Coles Hill deposits appear comparable to deposits that are being mined elsewhere in the world. Because of their geological characteristics, none of the known uranium occurrences in Virginia would be suitable for the in situ leaching/in situ recov- ery (ISL/ISR) uranium mining/processing technique. ISL/ISR mining requires specific hydrological and geological characteristics, with porous mineral-bearing rocks enclosed by relatively impermeable surfaces. In 2008, uranium was produced in 20 countries; however, more than 92 percent of the world’s uranium production came from only eight countries (Kazakhstan, Canada, Australia, Namibia, Niger, Russia, Uzbekistan, and the United States). In general, uranium price trends since the early 1980s have closely tracked oil price trends. The Chernobyl (Ukraine) nuclear accident in 1986 did not have a significant impact on uranium prices, and it is too early to know the long-term uranium demand and price effects of the Fukushima (Japan) accident. Existing known identified resources of uranium worldwide, based on p resent-day reactor technologies and assuming that the resources are devel- oped, are sufficient to last for more than 50 years at today’s rate of usage.