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Will rising uranium prices lead to a boom — or something else?

Uranium prices have been on the rise over the past several years.

At the start of 2017, it was around $18 a pound. By mid-2020, uranium was about $33 a pound. Today, it’s more than $100 a pound. And that has a lot of mining companies announcing new operations, or reactivating existing ones.

But is this a real uranium boom — or is it something else?

To help answer that, The Show asked Jonathan Thompson. He’s a contributing editor at High Country News and runs a Substack newsletter called the Land Desk.

Full interview

MARK BRODIE: How similar or dissimilar do you see what's happening now to what we've seen in the past relative to demand for uranium and efforts to find new supplies of it?

JONATHAN THOMPSON: Yeah, so far it's, it's a little hard to tell, you know, I mean, we're, we're kind of early in this cycle, in this stage of the cycle, I guess. But right now, what we're seeing is a lot of, I mean, uranium prices are really high. They're as high, higher than they've been since 2007, and that has kind of spurred up all this talk about a uranium renaissance and got investors going and all this stuff. And, and something else I should mention is that several years ago when the price was, not even several years ago, three or four years ago, when the price was pretty low, the domestic uranium mining industry was pretty much dead between 2007 or so when the last kind of price insanity happened. And there was a lot of talk about bringing back nuclear power and all that stuff. And then Fukushima happened in 2011, and that kind of killed that the buzz on that one. And it's just been in decline ever since, until, until now.

BRODIE: Well, so do you see this as a sustainable change, or is this gonna be like some of the others that we've, we've read about in the past where, you know, it's been big for some amount of time and then, you know, it isn't?

THOMPSON: Yeah, I mean, it's a good question. I think one thing we can say for sure is that the hype around it right now is bigger than the, the actual mining boom will be. That doesn't mean that we won't see any mining, mines come back online, we won't see new mines. I mean, I think we will, but when you look around at, at, if you look at investor websites or you look at mining websites or, or publications, you just see constant news of this company is acquiring another company or acquiring ... they're staking hundreds of mining claims or they're starting exploratory drilling or they've made a big find somewhere. You just see that everywhere. Plus a little bit of news, about some companies that have mines that have been sitting idle for a long time. But, but actually used to produce, or they got them up to being ready to produce, but then stopped because of the low prices. Those ones, they're actually starting to bring them back online to produce. But in addition to that, there's so much hype and I think we can say pretty confidently that there those probably at least 50%, probably 75% of those won't go anywhere.

BRODIE: I'm curious about some of the, the timelines of this. Because as you say, you know, companies, mining companies are announcing new, new operations and acquisitions and that kind of thing. But I'm wondering about, they're doing that in response to demand at that moment. But how might that change by the time they actually start actually doing the mining and, and like getting uranium out of the ground? It seems like that, that lag is really kind of a problem for at least some of these operations.

THOMPSON: Yes, that's, it's a problem for most of them. The lag between exploratory drilling or staking a mining claim and actually opening a mine is many years, if it even happens at all, because you still have to go through permits. Even though mining law is pretty lax, you still have to do all that stuff. So that takes a long time. So, I think that a lot of these speculative kind of things that are going on or are just that. They're speculative, they're probably there to gin up some shareholder interest and get the stock prices up a little bit, that sort of thing.

But the companies, there are companies like Energy Fuels, which is one of the biggest, and they have several mines that are just on standby mode. They've already produced or they have gotten ready to produce, and they can kind of turn those on fairly quickly, relatively quickly. And that includes the Pinion Plain Mine down near the Grand Canyon, which is also very controversial. That includes mines in southeast Utah and they own the only operating uranium mine in the U.S., which is in Blanding, Utah, the White Mesa Mill. But even they are kind of being cautious and walking kind of slowly. They're saying we're gonna restart the Pinon Plain Mine. We're gonna restart a couple of other ones in Utah. It's gonna take a little while, and we're gonna start producing ore, but we're not necessarily gonna start processing that ore right now, and we're not gonna necessarily sell the uranium anytime soon. We're gonna stockpile it.

And it's not clear what they're waiting for, but I think they're waiting for the actual prices of uranium to go up because right now we're looking at spot prices, which is not necessarily the same as what they can sell it for on the open market. You know, that's driven by speculation, that sort of thing. So I think that they're not even super confident in the sustainability of this price increase in the demand yet.

BRODIE: Yeah. Well, so I'm wondering like in terms of boom and, and I don't want to call it a bust, but you know, good times and, and less good times, how much of that is dependent on price and how much of that is dependent on environmental concerns? Environmental regulations, maybe community concerns, tribal concerns, sort of other non, non-price related factors.

THOMPSON: Yeah, I mean, in some ways it's hard to say with uranium, because the last boom, which was basically from World War II until the mid 1980s, was driven by somewhat different factors. I mean, it was mostly driven A) by the need for material to put in weapons and because it was for weapons and because it was defense, the government did all kinds of subsidies and propped up the industry. And so it was almost entirely almost an artificial boom if you will. Of course, you know, environmental concerns are even bigger now than they were then. And they're a much bigger issue. There's way more regulations. So it's much more difficult to open a mine than it was then. Plus you don't have all these government subsidies and all that stuff. So I think that, you know, you're looking at something different this time.

That said, it's still not that hard because we still have an antiquated mining law, the 1872 mining law, it's relatively easy to kind of get up. It's easier than it should be, I guess I should say, to get through the environmental regulations and all that. Of course, once you have opposition, and you do have a lot of opposition to uranium mining. The Navajo Nation has banned uranium mining on their land. The Havasupai tribe is fighting the Pinion Plain mine very ardently. But so far that hasn't stopped anything from happening. So I, I think that's actually less of a factor than economics. When it comes down to it., it's really about supply and demand and price. And if the, the companies can make a lot of money, then they're probably gonna do it at some point.

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Mark Brodie is a co-host of The Show, KJZZ’s locally produced news magazine. Since starting at KJZZ in 2002, Brodie has been a host, reporter and producer, including several years covering the Arizona Legislature, based at the Capitol.