The unfolding nuclear disaster in Japan is likely to delay plans to build a uranium mill in the Paradox Valley by at least a few months, according to an executive at the company that owns the mill.
The disaster shook the worlds uranium market the same week that Energy Fuels Inc. was wrapping up a financing deal for its proposed Piñon Ridge uranium mill, between Naturita and Paradox, said Gary Steele, the companys vice president for corporate marketing.
Ive had better weeks than the last one, believe me, Steele said.
The March 15 weekly spot price of uranium fell to $60 a pound, according to UxC Consulting, a company that tracks global uranium prices. Thats down $6.50 from a week earlier and $12 from the end of January.
The March 11 earthquake and tsunami knocked out power to Japans Fukushima Daiichi nuclear complex and interfered with the plants ability to keep its nuclear material cool and contained. The plant has suffered several radiation leaks, and the U.S. Embassy in Tokyo warned U.S. citizens Thursday to stay at least 50 miles away from the plant.
Already, China and Germany have announced moratoriums on new nuclear plants, and U.S. Congressmen like Massachusetts Democrat Ed Markey are calling for the same thing here. Italy will hold a national referendum on building more nuclear plants in June.
Reaction to the disaster has played havoc with Energy Fuels and other uranium companies, which mostly are headquartered in Canada.
It is sell now, ask questions later for the uranium market, Canadas Financial Post declared on March 15.
Energy Fuels wrapped up its plan Thursday to sell $10 million in shares of the company. The price was dependent on market conditions at the time, and Energy Fuels stock had dropped to 41.5 cents a share at Thursdays close on the Toronto stock exchange, down from 87 cents the day before the earthquake.
Steele said its only realistic to think some of the financing for the mill will be delayed, but perhaps by as little as a few months.
We didnt plan to go out and raise money in the face of what has been probably the worst week the nuclear industry has seen in 25 years, Steele said.
Steele was referring to the Chernobyl nuclear plant in the former Soviet Union, which suffered the worst disaster in the history of civilian nuclear power in 1986.
The Piñon Ridge mill would be the countrys first new uranium mill in two decades. Energy Fuels hopes it spurs a resurgence in uranium mining in Southwest Colorado, which used to supply much of the ore for American power plants and nuclear weapons.
The tsunami happened just four days after Energy Fuels received a radioactive materials license from the state health department.
The license requires Energy Fuels to put up $11 million to guarantee cleanup of the mill, due in four payments. The first installment of $1.4 million is due May 6.
The uranium market saw a rebound at the end of the last decade as more countries turned toward nuclear power and the uranium from old nuclear weapons which had flooded the market for civilian reactors began to run out.
UxC Consulting noted the fundamental strength of the market in its newsletter last Monday, but it anticipates a lengthy political fallout from the disaster that will continue to hurt the uranium market.
We think it is much more likely that this story is not going to go away for a long time, Ux Weekly said.
Steele also thinks the market is sound, but he agrees that the political conversation around nuclear power has gotten more difficult for his company.
Its definitely a bump in the road and its likely to translate into some delay in what were able to do. It doesnt shut the door on folks needing fuel for nuclear plants, Steele said.