An Inside Look at Cameco’s Smith Ranch Uranium Facility

Cameco Corp (NYSE: CCJ) is the 800-pound gorilla of the uranium industry. Cameco is to uranium what Wal-Mart is to retailing and Saudi Aramco is to oil. On a percentage basis, Cameco dominates its industry more than either of them. Cameco probably has more clout than any other company in the world right now to turn off the electricity that runs your computer.

This week, the spot price of uranium rose to $40/pound for the first time since Ronald Reagan was president. This should help Wyoming’s uranium business grow by leaps and bounds. In Chapter 5, we look at Cameco-owned Power Resources, the largest uranium producer in the US.

Understanding the ‘In Situ Leach’ Uranium Extraction Process

“It cost 284 million Canadian dollars to build and employed 546 people,” said Patrick Drummond, Plant Superintendent of Cameco subsidiary Power Resources’ Smith Ranch plant. The wall across the table showed Kerr McGee’s Smith Ranch underground mine, which was later converted into an ISL operation operated by Rio Algom. “This operation cost US$44 million to build and employed 80 people.” Drummond was referring to the In Situ Leaching (ISL) uranium extraction facility known as Smith Ranch. “That will give you the scale of ISL compared to an underground mine,” he explained.

The aging but vigorous Drummond knows uranium well. Since 1980, he has worked in underground mines, open-pit mines and uranium mills. From 1996 to the present, he worked for Power Resources in Wyoming at the company’s ISL uranium extraction facility. “I started in the coal mines of Scotland,” Drummond boasts, claiming that he can recognize a coal miner in a pub just by looking at the seams in their hands. “I worked at Elliot Lake and the huge underground mines there.” He crossed his arms and looked down, apologetic: “It’s also a huge environmental problem to clean up, a huge undertaking. Quirk Lake was one of the biggest mines there. It cost a lot of money to clean it up.”

The New Face of Wyoming’s Uranium Mining is the ISL method of uranium extraction, also known as solution mining. The differences between underground uranium mining and an ISL operation are both small and large. Both methods extract uranium from below the surface. So both methods are underground mining. But that’s where the similarities end. Drummond explains the basics of underground uranium mining as follows: “Underground, you bring the ore up, grate it, crush it and extract the uranium from the ore.” “This ore becomes what is known as tailings. You then have to service these large tailings and then decommission them.”

and then we put the water back underground. Then we put the water back underground.” Does all the water go back into the ground? Actually, no. Drummond explains: “We extract our water and we put 99 percent of it back. The 1 percent we call ‘bleeding’. It’s a control function.”

Drummond gives more comparative examples: “To start an underground mine, it takes a year to build the shaft before you start mining. Then there’s the development cost of the mill complex. You incur all these costs before you get any benefit. It’s expensive – more than $200 million – to mine underground because of the upfront development costs.” From his point of view, the miner in Drummond has come to like solution mining. “ISL is easier. It’s much cheaper: less capital costs and less operating expenses. It’s less labor intensive.” “This is a zero-emission plant,” Drummond replied when asked about the deadly radon emissions that are often cited as a hazard in underground mining.

Analyzing the two methods, Drummond said, “You can start production faster in an ISL operation. You can start production and make money when you build your first head house.” “So you get a faster return on your investment,” he added. What is the downside? “We recover less uranium with ISL,” Drummond admitted. “Some of Cameco’s mines in Saskatchewan have uranium at 5, 10, 15 and 27 percent. In this region or at ISL, it’s less than one or two percent. That’s a very low percentage.” Also, the uranium ore body must be located below the water table. “You can only do ISL in rocks that are porous and have water in them,” he added.

In the simplest terms, billions of years ago, uranium found its way into the underground aquifers of Wyoming’s sandstones. “We add oxygen and put the uranium back into solution,” Drummond said. “We mix it with CO2 to keep it in solution and then bring it to the surface. We remove it with an ion exchange base.” According to Drummond, uranium extraction works on the same principle as a water softener. “We add salts to the resin to allow the uranium to be pulled back through the resin. Then we take that uranium and make a final product called yellowcake.”

So why is it called yellow cake? “Some of it is yellow; some of it is green or dark green. Some of it is black,” Drummond patiently explained. “The color is a function of how we dry it, not how we process it. There is a very definite correlation between the drying temperatures of yellowcake and the color.” It all depends on what chemicals you use to process the uranium. At Smith Ranch, we make uranium peroxide. It’s very clean and yellow. We mix uranium with hydrogen peroxide to make our product. You can make different kinds of yellow cake. You can make uranium diuranate, which is a complex made with ammonia.” Yellowcake can also be made with other chemicals.

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How is Wyoming’s ISL uranium dried? “We dry the uranium with vacuum dryers,” Drummond said. “The benefit of vacuum dryers is that first of all it’s a vacuum, so everything is sucked into the canister, so nothing escapes into the environment. There are no gases escaping.”

Investigating Environmental Issues

At this point, we thought it would be appropriate to question all the puzzling concerns that many of us might have when thinking about nuclear energy and uranium. How safe is all this really? “When we first started mining uranium, we inherited people from the gold mines,” Drummond explained. “They were underground and they were smoking, breathing the dust. We didn’t have good ventilation in the early days. In underground mining you have to move the air.” Hard rock underground mining produces dust. “The silicon particles you breathe in stick to the follicles in your lungs,” he notes. But this doesn’t happen during ISL extraction. No emissions, a shaft field with underground pipes and hoses, and very detailed safety measures explain why Power Resources’ lobby wall is lined with Safety Award certificates and plaques.

“It’s a great feeling,” Drummond continues: “Every day we are scanned for alpha radiation when we leave the plant. “Depending on your position here, you have a urinalysis once a week or once a month. We also check radiation levels.” How did Drummond come out of his last radiation check? “I was way down,” he laughed. “There are people on Malibu beach with higher radiation levels than me.”

What measures does Power Resources take to protect the environment during ISL extraction? “We’ve had zero accidents since 1996,” Drummond explained with a steely tone in his voice. “We go to great lengths to look at the topography, so if there is a deviation, we make sure that it doesn’t go into what we call ‘waters of the state’. Any channel that could take that and carry it into the ‘waters of the state’ is something we pay very close attention to.”

After holes are drilled into the well sites, a company takes a ‘baseline sample’. “This is an example of the constituents in water. When we mobilize uranium, we mobilize other substances. Our job here, once we start at the well site, is to return the aquifer to baseline when we’re done.” “If we know what’s in the water before we start, we know how to restore it,” he added. Restoration of Mother Nature’s underground intervention can take between 18 and 36 months.

The company is also meticulous about the restoration of the landscape. Any restoration work on the surface is called “reclamation”. This can include agriculture. “When we drill a well site, we are required by license to remove the topsoil and store it somewhere,” Drummond explained. “When we go back to reclaim the land, we take out all the pipes, demolish the houses and cut our wells. They are all identified. We put an identification mark on the well. After 50 years, when Farmer Joe comes and wonders what was there, the state can say, ‘That was a uranium well. As soon as we stop mining, we bring everything back to normal.”

Depending on the rolling fronts, it can take two to four months or up to seven years to deplete a well site. It can take up to 24 months to open a wellsite, while reclamation and restoration takes longer. “We put topsoil back in as soon as possible, depending on the weather,” Drummond said. “We reseed in the spring or fall, which is the best time for the seeds. The seed we use is dictated by regulators, so we use a certain amount of native vegetation.” Because Smith Farm is very dry, almost bordering on desert, and very windy, it doesn’t take long to spread topsoil. “First we plant fast-growing oats to create a root bed,” he explains. “If we just planted grass, it would all blow away. Because we plant oats, we have fat antelope and fat deer.” From our observations, the sheep were well-fed and playful.

How does Wyoming ISL mining compare to other places like Texas or Kazakhstan? “The water is clean in Wyoming, even compared to Texas, where ISL is done,” Drummond replies. “The water is pretty clean there, too.” “When we bring our uranium to the surface, it comes out as uranyl dicarbonate,” he replied. “In Texas, it comes out as uranyl tricarbonate.” What is the difference? It’s the processing of the uranium. “We get about 8.5 pounds of uranium per cubic foot of resin,” he explained. “In Texas, they get about 3 to 4 pounds of uranium per cubic foot of resin.”

Drummond Smith Ranch describes the ion exchange operation as follows: “We have two columns for ion exchange, each with about 500 cubic feet of resin.” According to Drummond, the resin costs about $200/cubic foot and can last up to thirty years, barring mechanical damage. The polymer beads – which look like small plastic ball bearings – capture the uranium during processing. “In Kazakhstan you get about two to three kilos of uranium per cubic meter of resin,” he continued. “They use hydrochloric acid because of the water conditions. Of course, you changed the chemistry of the water and used all the acid to clean it.” Drummond described the water in Kazakhstan as very brackish and yellowish. “The TDS (total dissolved solids) is very high,” he added. “The water is already unfit for human consumption.” He laughed, “Using acid there cleans their water.”