Too Hot To Handle? Rising Uranium Prices Means Jobs; But Some Say The Risk Is Too Great
Published by MAC on 2007-07-16Source: Gallup Independent
Too hot to handle? Rising uranium prices means jobs; but some say the risk is too great
By Zsombor Peter, Gallup Independent - http://www.gallupindependent.com/2007/july/071607zp_toohottohandle.html
16th July 2007
CHURCH ROCK — From 1967 to 1982, the United Nuclear Corporation mined several million tons of uranium ore out of this 125-acre site where New Mexico Highway 566 dead-ends 15 miles north of Church Rock.
Back then, the jobs were plentiful and the pay was good, especially for a young Navajo just out of high school. Larry King, who grew up and still lives just miles south of the old mine, started out as an underground surveyor for UNC in 1975 at $9 an hour, chasing uranium drifts as they snaked through the rock 1,600 feet below the surface.
"At the time it was good money," King said.
But when uranium prices began to tumble in the wake of Three Mile Island, the mine shut down and the jobs disappeared. Today, the few hollowed-out office buildings still standing at the site are as empty as the shed-off skin of some long departed reptile. Weathered tiles crack underfoot. Decades-old technical manuals litter the floors.
They're the only tangible reminders of an industry that used to thrive here. But with shrinking weapons stockpiles and new demand once again driving uranium prices skyward, mining companies are returning to this quiet corner of the state with new promises of hundreds of jobs and millions in royalties. Some locals want them back. Others, like King, who still live with the radioactive fallout from the last boom and don't believe another would prove any safer, say they'll try to stop those companies "until there's a cure for cancer."
Show me the money
Although not one company has yet to mine a pound of uranium out of New Mexico soil this century, many are making preparations. Few are further along than Hydro Resources Inc., the local subsidiary of a Texas company with four properties between Church Rock and Crownpoint. It's already secured a crucial license from the U.S. Nuclear Regulatory Commission, although opponents have tied it up in federal court.
Economically, HRI makes a tempting offer.
If and when production ever starts, the company says each site will need nearly 100 workers and pump $35 million into the community through payrolls and the purchase of supplies and services.
Richard van Horn, HRI's vice president of operations, said he could probably fill half, maybe even three quarters, of those jobs locally. All he's looking for is English proficiency, a high school diploma, a strong work ethic, and a drug-free record.
"We don't need to go outside when we have people here who need jobs," van Horn said.
He said salaries would range from $12 an hour to the low $20s and come with benefits, health insurance and a 401-K, "the whole works, so these aren't minimum wage-type jobs."
And those are just the employees. While HRI bought three of its sites from other companies, some 400 Navajo allottees hold claim to its 1,440-acre Unit 1 site in Crownpoint. If it can recover 75 percent of the 27 million pounds of uranium there, the company says those allottees could collectively earn more than $200 million over the lifetime of the mine.
The Navajo Nation could be in for a big payday, too. At HRI's Section 17 site in Church Rock, where it has surface rights, the tribe could make more than $16 million off of royalties, according to the company.
But all that's assuming a uranium spot price of $100 per pound. After the price of a pound of uranium crashed in early 1980s, it stayed low enough to keep most mining companies out of the business for the next two decades. It's only in the past three or four years that it started to rebound. In early 2003, a pound was trading for less than $11. It's now trading for just over $133.
Van Horn says he believes the market is in for a correction but doesn't know when.
"If I knew that," he said, "I would be buying uranium futures."
The price has already dipped a few dollars since mid-June, for the first time in years. Given all the volatility, what the allottees and tribe would really end up earning is anyone's guess.
King's guess is that it won't be nearly what HRI claims, and he questions the company's promise of jobs, too. When HRI first started talking about the jobs it would bring to the area, he said, it mentioned 300, "but as time went by ... they mentioned a lower number. The last time they mentioned the number of jobs they were going to create it was 60."
The company's royalty figures seem to be changing as well. HRI provided The Independent with that $16 million figure the Navajo Nation's take from Section 17 a few weeks ago. In January, assuming the same recovery rate, it said the tribe would earn $9 million from the site at a uranium-per-pound price of $75. So if the price of uranium has gone up a third since then, the tribe should be in for only $12 million now.
But it's all a moot point to the tribe, which banned all mining and production of uranium on Navajoland in 2005. HRI claims its sites all sit on private land, beyond the tribe's jurisdiction, but a recent ruling by the U.S. Environmental Protection Agency concluded otherwise. HRI is appealing.
Land of opportunity
Unit 1 is another matter. Unlike its other sites, HRI leased it from Navajo allottees whose descendants were granted private rights to the land by the U.S. Interior Department in the 1800s.
With millions to be made, those allottees want the tribe to get out of HRI's way.
"We have every right to have our land developed, and we have people with no interest trying to control us," said Ben House, president of the Eastern Navajo Allottees Association.
An allottee himself, House gets $3,000 a month from HRI to help the company build local support. For a man charged with changing the minds of some very staunch opponents, he's low key. He picks his words slowly and carefully.
"Joe Shirley can do whatever he wants on the reservation," he said of the Navajo Nation president, who signed off on the Tribal Council's uranium ban, "but out here we treat our allotments as private land.
"Back in 1868, people were given this land to try and make a living, and that's what we're trying to do."
But if the tribe won't listen to the allottees, House said it should at least listen to its out-of-work citizens. Unemployment across the reservation has hovered stubbornly above 40 percent for decades.
"The Navajo Nation promotes education, but they're not providing jobs," House said. "We got people coming in to look for work ... especially the young people. They're really hurting. They've got bills and families."
He said people stop by HRI's Crownpoint office asking about jobs every week, but he as nothing to give them. Several buildings sit inside the company's fenced-off compound. But with mining yet to start, it's a quiet place.
HRI and its allottees aren't the only ones who want to see that change. The McKinley County Board of Commissioners passed a resolution in support of the uranium industry's return last year.
Commissioner Earnest Becenti, who requested the resolution, said the county needs jobs and more money for better roads.
"Thus far we've just been meeting the emergency needs," he said, "but we need to provide a better living standard for our people."
Becenti said he voted for the resolution on the strength of a recommendation from the county's advisory water board, which concluded that HRI's proposed mining activities would pose no significant risk to the county's water supplied. Larry Winn, who facilitated the board's meetings on the subject, thinks its conclusion may have been different if it had sought out some expert testimony from opponents rather than settle for the emotional rebuke it got from a handful of residents. Still, Becenti stands by his decision.
"We need the jobs," he insisted.
A Texas tale
The residents of Kleberg County in south Texas got that and more.
When Uranium Resources Inc., HRI's parent company, started mining its Kingsville Dome site in 1988, said Richard Messbarger, executive director of the Kingsville Economic Development Council, "they hired every drilling rig they could find."
He said the company employed up to 200 people at any one time, "and they paid very well."
With the tax revenue the mining generated, he added, the local school district built a new gym and classrooms.
But what they also got, according to the county, was a breach of contract. When URI decided in 2004 that it wanted to start mining a section of the site called Area 3, it made a deal with the county that any wells in Areas 1 and 2 that were suitable for drinking, irrigation or stock watering before it started mining them in the 1980s would be restored to premining conditions first.
URI started mining Area 3 in January. But according to the company's own data, one well, the only one that tested usable, has yet to be restored.
As George Rice, a groundwater hydrologist working for a local group trying to stop the mining, put it, URI "basically said, 'Forget you, county. We're going to go ahead mining, and if you don't like it, that's too bad.'"
By February, the county passed a resolution authorizing legal action if the parties failed to talk the matter through. According to the county's attorney, they're still talking.
URI insists it's breached nothing. Mark Pelizza, the company's vice president for environmental affairs, said it found some old data after 2004 indicating that the well was never usable to begin with.
Unconvinced, some county residents have banded together in hopes of kicking URI out. They call themselves STOP, for South Texas Opposes Pollution. They're worried that the elevated uranium levels at the mine site could contaminate nearby wells that are still clean.
Pelizza says they have nothing to worry about. Over the 30 years URI has been mining for uranium with the method it's using at Kingsville, he said, "there has never been a water well impacted."
But it's also true that no mining company using the same method has ever restored the underground water at a mine site to its original conditions. The only way a company has ever managed to officially call a site restored is by convincing the state or federal government to lower its standards.
Teo Saens knew none of that when he and his wife leased 40 acres to URI in the early 1990s.
"The words that were used were, 'We're going to take a batch of uranium and leave (the water) crystal clear," cleaner even, Saens said, than before.
The lease has since expired, and because URI never mined his land, Saens earned only $100 a year per acre. But he considers even that "blood money."
"It's little consolation for what they're doing to the land," he said. "If we knew what we know today, we wouldn't have leased."
Weighing the odds
Messbarger says most Kleberg County residents appreciate URI's presence. He says its opponents are few.
"They're a small cadre," he said, numbering no more than 15 or 20 at any time.
In northwest New Mexico, the Eastern Navajo Din Against Uranium Mining has been fighting HRI for years.
President Mitchell Capitan used to have high hopes for leaching mining, the method URI uses in Texas and HRI wants to use in Church Rock and Crownpoint. Instead of digging open pits or sending miners underground, it involves injecting chemicals that loosen the uranium from the rock so it can be pumped to the surface. As a lab technician for Mobile Oil before HRI showed up, he tried to show it could work. But what he discovered he's never forgotten.
"The thing that really bothered me was the end result of Mobile's demonstration, where they couldn't restore the groundwater," he said.
Mobile ended up pulling out. Now, he said, "(HRI) is saying that nothing will happen ... but I don't believe them."
What troubles opponents even more is that HRI wants employ the method closer to active wells than it's ever been tried before.
"So more or less," King said, "HRI's going to experiment with us."
The company's license from the Nuclear Regulatory Commission says it has to move the wells before mining. But according to the NRC, the company can always ask to have the license amended. And since HRI tried convincing the NRC that the wells were not a problem before, opponents believe it will try again.
House dismisses Capitan's objections as ignorant scare tactics.
"The Navajo Nation should not be held back by fear," he said. "If we're afraid to make a move, we can't make any progress."
House wants the tribe to let the allottees live off their land as they see fit.
"But it's not the land we're concerned about," King said. "It's the aquiver, and the aquifer doesn't know where your boundary line is."
Capitan summed up the choice these communities face by holding up his two hands to the shoulder to make a human scale. In one, he said, was all the wealth a new uranium mining boom could bring. In the other, he said, were all the risks to health and homeland.
Messbarger disagrees with the company's opponents, but he understands why the issue inspires so much controversy.
"In the Southwest, nothing scares people more than concerns over the quality of their water," he said.
"Water is precious," Capitan said. "Water is life."