A Dozen Things You Should Know About Mining in Northern Arizona      | Home |

January 9, 2012

The Obama Administration and Secretary of the Interior, Ken Salazar, today in a blatant political sop withdrew (blocked access to) one million acres of America’s prime energy resources in northern Arizona in order to appease his radical environmental following.  This action was taken despite the publication of his own department’s (BLM) publication of a massive environmental impact statement (EIS) that failed to reveal anything that would justify such a withdrawal.  What then, is the impact of this reckless action on the environment, the economy and America’s energy users?  What agreements have been breached by today’s announcement?  Here are several facts you should know about uranium mining in northern Arizona. Click on any number immediately below for more detailed information.

01. The Obama Administration needlessly withdrew over a million acres of prime  energy-producing lands in northern Arizona.
02. There is no mining in Grand Canyon National Park, and halting mining outside the Park does not protect the landscape either inside or outside the Park boundary.
03. Locking up a million acres to mining claims in northern Arizona contradicts a longstanding and carefully crafted compromise—the Arizona Wilderness Act of  1984.
04. The heated rhetoric over the environmental impacts of uranium mining near the  Grand Canyon is baseless.
05. It is fiction that uranium mining companies “pay nothing” for mined uranium.
06. Putting the highest quality source of domestic uranium off limits to new claims harms U.S. energy security.
07. Mining uranium in northern Arizona is not incompatible with a vibrant tourism  industry, and we have the data to prove it.
08. Needlessly banning new mining claims in northern Arizona will have devastating economic impacts to the local economy.
09. There is considerable state and local support for the continued mining of uranium in northern Arizona.
10. Uranium mining today in northern Arizona is not the same as uranium mining in days past.
11.  Foreign mining companies operating in the U.S. and in northern Arizona mean great paying domestic jobs.
12.  Domestically produced uranium cannot be exported without a federally-approved export license.
 

1. The Obama Administration needlessly withdrew over a million acres of prime resources lands in northern Arizona.

Interior Secretary Salazar halted new mining claims for two years in 2009 on roughly a million acres of land located in three parcels near --not in --the Grand Canyon National Park -two north of Grand Canyon National Park on Bureau of Land Management (BLM) lands on the Arizona Strip and one south of it in the Kaibab National Forest.  Federal agencies completed a so-called environmental analysis of the effects of withdrawing the land to mining and have issued a final environmental impact statement. See Attachment #1
for a map.

The long-term withdrawal of nearly a million acres of prime uranium mining lands is scientifically unsupportable.  In the draft environmental impact statement; a panel of experts found that mining activity would have no or negligible impact on the Colorado River watershed; that recreation and tourism are unlikely to be affected; that mining would not result in any direct impacts to designated or proposed wilderness areas; and that impacts are not anticipated to alter the overall distribution of fish or aquatic organisms nor result in changes to overall fish or wildlife populations.

From the very beginning, the Secretary conducted a charade of a public process to consider solid scientific data, yet his actions announced today make perfectly clear that the ultimate outcome of the process was always to be his preferred alternative of implementing a 20-year withdrawal.  On March 30, 2011, a BLM employee responsible for doing the EIS said in St. George, UT, “The local BLM office found no justification for a withdrawal through its conduct of the NEPA process.  The decision to withdraw these lands was made early on by the Secretary and his people in Washington…”   This act of locking up lands in northern Arizona to new mining claims is simply part of the Administration’s political agenda to appease environmental groups.

The FY2012 Interior Appropriations bill included a commonsense prohibition of the Secretary’s regulatory overreach. Advocates of safe mining successfully blocked attempts by opponents to strip the language during committee consideration of the measure.  Sadly, House Appropriators dropped nearly all of its riders including the northern Arizona provision to block the Administration’s withdrawal, which left the door open for the Interior Department to thwart the will of Congress today.

2. There is no mining in Grand Canyon National Park, and halting mining outside the Park does not protect the landscape either inside or outside the Park boundary.

There is no current mining, nor is any mining proposed, inside the more than 1.2 million acres of the Grand Canyon National Park.  Not only is mining prohibited in the Canyon, but the park boundaries include a buffer zone to protect it.

In written testimony, the State of Arizona Director of Mines and Mineral Resources stated that “the references in the releases and the media are to the Grand Canyon, leaving the impression that the mining would occur in the Grand Canyon National Park (which is prohibited); actually it is several miles away – well outside the boundaries of the Park.”

The uranium mining lands impacted by today’s long-term withdrawal comprise about a million acres of land located in three parcels near (not in) the Grand Canyon - two north of Grand Canyon National Park on BLM lands on the Arizona Strip and one south of it in the Kaibab National Forest.

The nearest mine is between six and eight miles outside of the national park boundary on BLM lands. Even if every existing claim were acted upon, due to the small footprint of a typical breccia pipe mining operation that averages approximately 20 acres, only a fraction of the million acres would be involved in mining.

Ironically, there are currently uranium mining operations taking place within the withdrawal area, yet today’s mining ban would not halt those on-going operations, nor will it block 3 – 5 other mines which are grandfathered in by today’s action.  If uranium mining is such an anathema to the scenic integrity of the Grand Canyon, why would the Administration allow it to continue?  The ultimate irony is that the one operating mine, Denison Mines’ Arizona-1 Mine was given the Sentinels of Safety award by the Obama Administration’s Mine Safety & Health Administration (MSHA).  Apparently, the Obama Interior Secretary Salazar failed to the the word.

3. Locking up a million acres to mining claims in northern Arizona contradicts a longstanding and carefully crafted compromise—the Arizona Wilderness Act of 1984.

The Administration’s new mining ban on a million acres of public lands in Northern Arizona violates the intent and provisions of a historic 1984 agreement reached between the environmental community and mining industry, and negotiated by the Arizona Congressional Delegation led by former House Interior Committee Chairman Mo Udall, Sen. Barry Goldwater, then-Congressman John McCain, and the District’s own Congressman Bob Stump.

In the early 1980s, a unique compromise between the environmental and mining communities resulted in legislation designating nearly 300,000 acres of BLM lands and more than 100,000 acres of National Forest lands as wilderness.  The Act added approximately 400,000 acres of land to the National Wilderness Preservation System, and provided that mining and grazing be allowed in the 540,000 acres which were released for multiple use and not designated as wilderness, if conducted in a responsible and sustainable manner.

The Act specifically directed nearly half a million acres of BLM lands and 50,000 acres of Forest Service lands be released from wilderness study area status with the understanding and intention that uranium mining would be allowed on the Arizona Strip and in the Kaibab National Forest.

Since the passage of the Arizona Wilderness Act of 1984 (P.L. 98-406), uranium mining activities in northern Arizona have a proven track record of production and reclamation that has not impacted the Grand Canyon.

Rather than respect a longstanding and carefully crafted compromise agreed to by all parties, the Administration would rather march forward locking up even more federal lands and removing it from responsible, authorized multiple use in the West.

4. The heated rhetoric over the environmental impacts of uranium mining near the Grand Canyon is baseless.

The BLM has provided no evidence to show that mining activities in areas outside of the existing park pose a risk to the resources within the Grand Canyon National Park.

Specifically, the BLM’s own draft environmental impact statement stated that there is no contamination of the Colorado River watershed from uranium mining, stating:

“It is also important to recognize that, based on the information described in Section 3.4, there is currently no conclusive evidence from well and spring sampling data that (modern) breccia pipe uranium operations in the north Parcel have impacted the chemical quality of groundwater in the regional R-aquifer.”

According to the Arizona Geological Survey:

“Even if the entire annual uranium production from an operating mine were somehow implausibly dumped into the river, the resulting increase in uranium concentration in river water would increase from 4.0 to 12.8 parts per billion (ppb) for one year, which is far below the 30 ppb EPA Maximum Contaminant Level. Therefore, we believe the fears of uranium contamination of the Colorado River from mining accidents are minor and transitory compared to the amounts of uranium that are naturally and continually eroded into the river.” (emphasis added)

The Arizona Department of Environmental Quality has stated clearly that, “The environmental risks posed by mining in Arizona have been successfully managed by both State and federal environmental requirements currently in place.”

In written testimony, the Director of the Arizona Department of Mines and Mineral Resources stated:

“It is recognized that some environmental organizations have issued rather strong rhetorical and emotional statements to the media about the „danger? of uranium mining, without any credible back up data.  The statements are based on fear not fact; the intention is to raise sufficient concern in the mind of the public to create an outcry against mining – which  might be termed scare tactics.”

The University of Arizona in a study of the Colorado River, concluded that mining does not adversely affect the Colorado River watershed.

Clearly, environmental concerns are simply another of the unjustifiable red herring arguments being made to justify locking up of prime resources lands in Northern Arizona.

5. It is fiction that uranium mining companies “pay nothing” for mined uranium.

It is true that there is no federal royalty on locatable hard rock minerals – including gold, silver, iron, copper, zinc, nickel and lead as well as uranium – mined on federal lands.  However, the repeated claim that uranium companies “pay nothing” for the uranium they mine is flatly wrong.

All of the western states dominated by federal lands charge a royalty or royalty equivalent tax on operating mines. The BLM collects annual claim maintenance fees of $140 per claim (other fees are paid when the claim is initially located). Unlike rental fees paid by other types of energy development, these fees are not shared with the states and go straight into federal coffers.

Far from “paying nothing,” the estimated total government take (how much money they collect), including federal, state and local taxes as well as payroll taxes, is about 41% of what hard rock mining operations produce.

According to the National Mining Association, U.S. metal mines directly contributed more than $19 billion to the U.S. gross domestic product in 2008, generating a total of $36.8 billion in economic output that year.

The mining industry is on record as supporting a reasonable royalty that allows the domestic industry to remain competitive. The 1995 Budget Reconciliation Bill contained a provision that would have imposed a 5% net proceeds royalty that was supported by industry yet President Clinton VETOED the bill.

6. Putting the highest quality source of domestic uranium off limits to new claims harms U.S. energy security.

The breccia pipe formations found in northern Arizona are highly concentrated features and often contain our Nation’s highest grade uranium ore (typically containing 0.6-3.5% ore vs. lower grade 0.1% ore found in other uranium areas.)

According to the Nuclear Energy Institute, prohibiting the Administration’s withdrawal of lands would “support the economic operation of the 104 nuclear power plants that supply one-fifth of our Nation’s electricity.”                 ? From a national security standpoint, domestic utilities now import 90% of the uranium used to operate America’s 104 nuclear reactors.  Thirty years ago, these reactors used U.S.-mined uranium for 100% of their electricity production.

According to the U.S. Geological Survey, northern Arizona holds nearly half of our Nation’s estimated undiscovered uranium. Placing the million acres in northern Arizona off-limits walls off an estimated 326 – 375 million pounds of uranium oxide. That is the equivalent electricity generating capacity for the city of Los Angeles for 154 years or for the entire State of California’s 40 million people for 22.4 years.

Our goal should be ensuring reliable and competitive sources of fuel supply for the critical and clean nuclear power sector. It is clear that current uranium primary production does not meet the existing demand.  While the remaining demand is being addressed with existing inventories and recycling, new production is essential.

The Administration’s withdrawal of the nation’s best high-grade uranium deposits from mineral entry represents a significant and unsubstantiated regulatory overreach to accomplish ends contrary to their own stated energy policy, and the Secretary of Energy, whose responsibility it is to safeguard the nation’s energy supply has stood by uttering nary a peep as his colleague at the Interior Department unilaterally removes some 42% of the nation’s highest quality fuel for nuclear power and allows 90% importation to continue unabated!

Within a few years, U.S. utilities will face the prospect of serious uranium supply shortages.  Already 90 % dependent on imports, what kind of signal does closing off this vast Arizona supply send?

7. Mining uranium in Northern Arizona is not incompatible with a vibrant tourism industry, and we have the data to prove it.

Proponents of locking up roughly a million acres of prime mining land to new claims outside of the Grand Canyon National Park are quick to point out what a cataclysmic impact uranium mining will have on tourism in the area.

Kane County, Utah officials have gathered empirical data showing that this is not true.  Visitation at the Grand Canyon National Park, Grand Staircase-Escalante National Monument, and Lake Powell grew during 1981 through 1991, which are the years of Energy Fuels Nuclear operation and the comparably most intense period of mining on the Arizona Strip to date.

In that timeframe, visitation grew steadily to a nearly 100% increase over 1981 visitation levels.  By way of comparison, during the same timeframe visitation to all of the U.S. National Parks combined stayed consistent at a roughly 25 % increase over 1981 levels.

If uranium mining on the Arizona strip is cataclysmic to the regional tourism industry, no one has bothered to tell the tourists – this argument is pure nonsense and utterly false.

8. Needlessly banning new mining claims in Northern Arizona will have devastating economic impacts to the local economy.

According to the Joint Economic Committee, Arizona is feeling the same unemployment crunch as the rest of the country, with payroll unemployment in the State at 8.7% as of November 2011.

According to local officials, unemployment ranges from 11-17% in the immediate area surrounding the Administration’s withdrawal of prime uranium mining lands, with unemployment climbing as high as 52 % on the nearby Navajo Reservation.

A recently completed economic analysis performed by Tetra Tech detailed the benefits of the uranium mining industry in the Northern Arizona Uranium District. The report concluded that there will be $29.4 billion in output over the 42-year lifespan of the project, including requiring the mining companies to pay $2 billion in federal and state corporate taxes and $40 million annually in payroll.

It is estimated that uranium mining would create more than a thousand jobs directly related to mining operations, and many thousands more jobs would be created as a result of the economic activity associated with the mining.

As indicated by the Governor of Arizona, “if instituted, this uranium mining ban would deal a blow to future economic growth near the Grand Canyon.”

Blocking new uranium mining outside of the Grand Canyon could cost the region as much as $700 million annually and thousands of jobs.  Given the lack of negative impacts associated with today’s uranium mining industry and the current struggling economic climate, locking up a million acres to new mining claims in northern Arizona is inexcusable.

9. There is considerable state and local support for the continued mining of uranium in northern Arizona.

The Republican Members of Congress from Arizona, Utah and Wyoming are unanimous in their support to allow new mining claims in northern Arizona and halting the Administration’s overreach.

Senators McCain and Kyl have indicated their disapproval of upsetting the compromise represented by the Arizona Wilderness Act of 1984.

Arizona Governor Jan Brewer indicated the Administration’s anti-uranium mining agenda represented “another instance of excessive and unnecessary regulation – this time potentially at the expense of hundreds of high-paying jobs and billions of dollars worth of revenue for the Arizona economy.”

Utah Governor Gary Herbert noted that “the immediate effect of this withdrawal will unnecessarily stifle the responsible development of uranium resources…”

The Arizona Department of Mines and Mineral Resources, the Arizona Department of Environmental Quality, and the Arizona Geological Survey have cited a lack of environmental concerns related to uranium mining.

Both the Mohave County, Arizona Board of Supervisors and the Mohave County Chambers Coalition, as well as Kane and Washington Counties in Utah have stated their opposition to the needless locking up of a million acres of prime uranium mining lands.

10. Uranium mining today in northern Arizona is not the same as uranium mining in days past.

There is no denying that past mining activities in Northern Arizona have left legacy impacts.  For example, the Orphan mine began as a claim filed in 1893, predating the Grand Canyon National Park in which it is located. Uranium was mined in the Orphan Mine long before the current mining laws, permitting, rules and regulations, and mining practices were in force.  Similarly, mines located in the Navajo Nation were active during a time when the Atomic Energy Commission was actively encouraging uranium mining and the resulting abandoned mines were under the supervision of the federal government.

However, comparing contemporary uranium mining in northern Arizona to legacy mining is comparing apples to oranges because of the increased level of regulation and the specific type of high-quality uranium formations in the Arizona Strip area.

New mines are highly regulated by both the state and federal government. Operating and reclamation plans must be approved and backed by financial surety to ensure that reclamation is completed at the end of mine life. Today’s uranium mining industry has an excellent record of successful operations and reclamation on the Arizona Strip.

The type of uranium mining done in the withdrawal area involves breccia pipe formations, which are  high concentration features and often contain the nation’s highest grade uranium ore (typically containing 0.6-3.5% ore vs. lower grade 0.1% ore found in other uranium areas.)

Historically, breccia pipe mines cause remarkably small surface disturbances because of the high-grade, compact nature of the mineralization and use of underground waste rock back-fill procedures during development work.  Higher grade deposits, such as breccia pipes, produce more uranium with less of an environmental footprint.

The uranium industry predicts that over the next 40 years, there would be only 5-7 operating mines at any one time (estimated total being 126), with staggered development.  This will prevent environmental impacts and allowing regulators and the public to keep a close eye on development.

Uranium mining sites in northern Arizona average approximately 20 acres, or roughly the size of a Wal-Mart parking lot.  Such sites are open for a short duration, and reclamation practices make them virtually indistinguishable from the surrounding area when mining is complete. Recently reclaimed mining sites in the Arizona Strip are a very real example of present-day mining. See Attachment #2 for an example of the small footprint of these mining operations and reclaimed mining site before and after comparison.

11. Foreign mining companies operating in the U.S. and in northern Arizona mean great paying domestic jobs.

Opponents of uranium mining in Northern Arizona have latched onto the fact that the only company currently engaged in mining operations is foreign-owned.  Denison Mines Corp. currently has one operating mine and is in the process of opening additional mining sites.  According to BLM records, there are currently 3,200 unpatented mining claims with the bulk held by three foreign owned exploration companies: Quaterra Resources (Canadian), Vane Minerals (British), and Uranium One (Russian).

To clarify some facts, according to Denison Mines Corps., they are a publicly traded company with its shares traded on the New York AMEX Stock Exchange and the Toronto Stock Exchange.  Based on their most recent shareholding information, approximately 22% of Denison’s equity is held by U.S. investors ranging from large investment funds to small retail investors.  Denison’s single largest shareholder is Korean Electric Power Corporation, which holds just 15% of the outstanding shares.  Denison globally employs approximately 350 personnel, of which more than half are based in the United States.  Denison’s Arizona Strip operations directly employ 50 personnel and its’ White Mesa Uranium Mill located in Blanding, Utah, employs 120 people, half of whom are Native Americans.

While foreign commercial investment in manufacturing facilities in many areas in the U.S. is looked upon as a great boost to the local economy and the local workforce, foreign investment in mining in northern Arizona is incomprehensibly viewed as negative.

What opponents fail to mention is the fact that there are fewer and fewer U.S. mining companies left.  After Congress passed the Windfall Profits Tax on oil companies during the 1970s, oil companies acquired the major domestic mining companies. Ultimately the cash flow differential between a producing oil field and a mining operation was too great and over the next two decades oil companies divested themselves of mining companies. Low metal prices and consolidation in the industry also contributed to the loss of domestic companies.

Other factors influencing the number of domestic mining companies include Securities and Exchange Commission regulations, Sarbanes-Oxley and Dodd-Franks that make it more difficult for U.S. companies to raise the extensive capital needed to explore for and build mines.

More than half of the equity capital raised by mining companies world-wide is raised in Canada. And more than 90% of all mining company financings are carried out in Canada.

As a result, the U.S. has only 80 registered mining companies compared to Canada’s 1,531, and there are only two large U.S. mining companies; Newmont and Freeport-McMoRan Copper & Gold Inc.

Denigrating foreign participation in domestic mining operations is a false argument.  The National Mining Association reports that U.S. metal mines directly contributed more than $19 billion to the U.S. gross domestic product in 2008, which generated a total of $36.8 billion in economic output that year.

Foreign-owned mining operations do not ferry all their workers in from foreign countries. Instead, they hire local workers, with their investment and economic activities leading to additional domestic jobs in the area.  It is estimated that uranium mining in northern Arizona will contribute as many as 4,000 jobs to the local economy.

Mining jobs are high paying jobs.  In fact, they are some of the highest paying jobs in the private sector for production and non-supervisory employees, according to the Congressional Research Service.  The average wage is $643/week while mining jobs make $1,123/week. The average mining wage is roughly twice the highest wages available in the tourism industry.

12. Domestically produced uranium cannot be exported without a federally-approved export license.

All domestically produced uranium is mind for the express purpose of electricity production.  Concerns that domestically mined uranium from northern Arizona will be absconded to some foreign location for nefarious purposes are totally unfounded.

To export uranium from the U.S., producers must apply for and obtain a specific Nuclear Regulatory Commission (NRC) license authorizing the export of uranium. According to a recent letter from the NRC Commissioner, “[b]efore issuing such a license, the NRC would have to determine that the proposed export would not be inimical to the common defense and security of the United States…Every application submitted to the NRC for a specific export or import license is made available to the public on the NRC’s web site, and the NRC welcomes public comment on such applications.”

Uranium is a fungible commodity and is actively traded internationally.  The domestic uranium industry today produces considerably less than what is needed by U.S. nuclear generating stations. The U.S. uses both domestic and imported uranium to meet domestic requirements, but domestically produced uranium is also traded in the global market.  Access to the extensive international markets helps ensure the broadest possible market support for domestically produced uranium and the associated domestic jobs and revenue.

Practically speaking, uranium concentrate is an international commodity not unlike gold or silver. Buyers and sellers are driven by market prices.  Requiring U.S. producers to sell only to U.S. utilities would eliminate the export of U.S. production, but would severely limit market options for the producers.

 

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