The only two uranium mines operating in Arizona and an associated mill in southern Utah are set to cease operations temporarily as prices for the ore decline.
Energy Fuels Resources Inc. said uranium at its Arizona One Mine in the north part of the state will be depleted in early 2014, and the nearby Pinenut Mine and the White Mesa Mill in Blanding, Utah, will be placed on standby next year.
The move comes after the company stopped short of extracting uranium at another mine south of the Grand Canyon near Tusayan and as per-pound prices for uranium on the spot market dip to a five-year low, in the mid-$30s. The company plans to maintain the sites so that they can begin operating if the uranium market improves.
“Our main focus right now is to act prudently in the current weak price environment and also to deliver on our contract obligations to our customers,” Energy Fuels spokesman Curtis Moore said. “We just determined that we had sufficient uranium in inventory and the ability to get uranium through spot market purchases for the next couple of years without mining that product.”
The company’s mines lie in a nearly 1 million-acre area that was placed off-limits to new mining claims in January 2012. Companies with existing claims that were proven to have sufficient quantity and quality of mineral resources could be developed under a decision by the U.S. Interior Department.
Nyal Niemutch, chief of the economic geology branch of the Arizona Geological Survey, said Energy Fuels’ actions point to the boom-and-bust trend common in the commodities sector around the country.
American Bonanza Gold Corp. recently suspended operations at its Copperstone gold mine north of Quartzsite and said it would seek additional money for engineering and redesigning the underground mine to boost productivity. In September, Mercator Minerals Ltd. laid off some employees at the Mineral Mine Park near Kingman as it struggled with finances and declining prices for copper and molybdenum.
“Markets aren’t fully rational, and we’re in a period right now, not just in uranium, we’re seeing strong retreats of prices, we’re seeing costs go up and a lot of companies and mines are having difficulties,” Niemutch said.
Energy Fuels said it expects the spot price of uranium to increase as nuclear reactors in Japan come back online and demand rises for the fuel source.
The Pinenut Mine was partially developed in the late 1980s but sat idle until earlier this year. Energy Fuels plans to put it on standby in July and stop production at the White Mesa Mill the following month. The mill will reopen in 2015 to process uranium-bearing waste.
Environmentalists are looking to the U.S. Forest Service and the U.S. Bureau of Land Management to ensure that the company doesn’t leave anything behind that would harm wildlife or the landscape.
“It’s a good thing on the one hand, but there’s a systemic problem in the regulations by the land management agencies that allow these mines to blink on and off at will without any review or revision in their plans of operation,” said Roger Clark of the Grand Canyon Trust.