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Show After Two Decodes, Government Will hid Uranium Purchasing Dec. 31 sf WASHINGTON Gov. eminent purchases of uranium ur-anium ores, which began under the Manhattan Kn-gineei'.ng Kn-gineei'.ng District during World War II, will eul th.s month, after two decades dec-ades of ore procurement by the AUnuic Energy Commission. 'I he affects of the decision de-cision have been felt for several months, causing mainly the smaller inde. endent uranium producers produc-ers to go out of business. Middle-sized mining com. panics which once numbered num-bered in the hundreds are also di.sappearng through mergers or acquisitions by larger firms. Other segments of the uranium industry, including includ-ing mine supply houses & dr.lling outfits, have turned turn-ed to other sources for business. In reality only small amounts of the uraniuri which the government lias purchased during the last 20 years have been used. Despite the spectacular publicity given to weapons tests and nuclear powered power-ed vessels, both activities have used but little of the government supply. The law of supply and de. mand has finally caught up with the uranium industry. in-dustry. Most of the vast ton. nages of uranium purchased purchas-ed by the government have been stockpiled. The stock, p.le provides the key ingredient in-gredient for warheads of Oio I' Q .r,.,..nl ie weapons, and also is kept i'or peaceful uses, many of whom are still in the experimental stage. The stockpile is in two forms the shiny, white pure uranium metals and the powdery uranium oxide, ox-ide, commonly known a., "yellow cake." As early as 195G the A EC warned that it was slowing down its uranium jj.urchase program. Dr. Jesse Johnson, then commission com-mission chairman, warned that provisions of Circular 5, revised, would not be renewed upon expiration, March 31, 19G2. Circular 5 provided a guaranteed price for uranium ores, graduated according to grade. This guaranteed price, plus initial production produc-tion bonuses and special haulage allowances, made uranium a very lucrative industry. Private contracts replaced re-placed Circular 5 in which the AEC entered with private pri-vate mlling firms for the Uarchase of yellow cake in specified amounts at $8 per pound. These contracts con-tracts evolved into the "stretchout" program that has been in operation recently. rec-ently. The average price paid to private firms during dur-ing 19G9 and 1970 has been between $5.50 and $6 per pound. Although private mills have purchased limited amounts from private producers pro-ducers under the stretchout stretch-out system, the trend has been toward integrated operations op-erations in which a single firm mines and processes the ores from its own properties. The smaller mining companies found it increasingly difficult to find an adequate market for their ores and exper. ienced rough competition from larger companies. Generation of electric power through nuclear means had been expected to take up the slack, but it has not worked out that way, due in many cases to environmentalists and others who were frighten. e.l of radioactivity and thermal pollution of bodies of water serving nuclear reactors. American Metals Cii. max is one minng company com-pany that has pulled out of the uranium market. AM AX did not have a stretchout contract and discovered that operating in the free market wasn't feasible. AMAX's Grand ll unction processing mill was closed early this year and mining operations ceased until the market stabilizes. The firm is however keeping its large uranium reserves in the Uravan Mineral Belt. Union Carbide officials are predicting that unless additional ore reserves are developed in the Belt, the Union Carbide mill at Uravan Ura-van may be forced to close in two years. A recent AEC announcement announce-ment stated that the gov. ernmer.t would release about ab-out 4J square miles of AEC.controlled land under un-der a modified leasing program. Provisions of the program were published in the November 10 Federal Fed-eral Register, with an invitation in-vitation for public comments, com-ments, during the following follow-ing GO days. The question now is how to administer the lands opened up. Current commission com-mission regulations pro. vide general procedures for leasing uranium lands through competitive bidding. bid-ding. Originally they were leased on a cash bonus basis. However, propos;d revisions call for flexibility flexibil-ity in establishing the bases on which bids will be invited. On the whole, both in. dustry and the government govern-ment have generated little lit-tle eithus.asin over the lease announcement. An. thorit.es believe this is due, mostly to the small demand for uranium at ilhe present time. The Grand Junction office of-fice of the AEC has cut 'back in personnel going from a high of ."3 employees em-ployees to the expected number of 75 by June of next year. At the pack of the uranium boom,. 513 persons were employed by the AEC offit-e. Many imore were attached to the office as employees of private support contractors contrac-tors anl such government personnel as Geological Survey and Defense Ma-ter.als Ma-ter.als Exploration Administration Admin-istration employees. The government now has several thousand steel drums at the AEC compound com-pound in Grand Junction, each drum containing 730 pounds of yellow cake. The government paid an average aver-age of $7 per pound for the material. The specter that haunts private uranium uran-ium companies is that someday through some government decision, the whole uranium stockpile will be dumped on the market, as happened with silver, causing a holocaust in the uranium industry. The Mining Record |