Work for uranium mine near Grand Canyon hits pause

Felicia Fonseca, Associated Press

FLAGSTAFF, Ariz. (AP) -- A uranium mining company that was sinking a shaft for a mine south of Grand Canyon National Park has put the work on hold, citing market conditions and the expense of litigation.

Energy Fuels Resources Inc. said the operation will be on standby until December 2014 or until a ruling is issued in a federal case challenging the U.S. Forest Service's decision to allow development of the Canyon Mine near Tusayan. The company had planned to start extracting 83,000 tons of ore to produce 1.6 million pounds of processed uranium, or yellow cake, in 2015 but now will have to re-evaluate the timeframe.

Stephen Anthony, Energy Fuels president and chief executive, said the mine remains an important aspect of the company's medium-term plans and it will continue to work with the Forest Service to defend the project's approvals.

Prices for uranium have dropped to the mid-$30s per pound on the spot market, among the lowest in the past five years. The Canyon Mine had been on standby status before, from 1992 until work resumed earlier this year, because of pricing.

"Obviously this is an indication that it doesn't look good from an economic perspective," Sandy Bahr of the Sierra Club said Wednesday. "We obviously think that it has never looked good from an environmental perspective. It would be nice if they would also recognize that aspect of it and make the shutdown permanent."

The mine sits in a nearly 1 million-acre area that was placed off-limits to new mining claims in January 2012. Companies with existing claims that were proven to have sufficient quantity and quality of mineral resources could be developed.

The Havasupai Tribe and a coalition of environmental groups sued the Forest Service in 2012 over what they claim is an outdated environmental review from 1986. The groups also argued that the Forest Service failed to consult with the tribe on impacts the mine would have on a butte held sacred by the tribe. Energy Fuels is an intervener in the case.

The parties signed on to an agreement Tuesday to put the mine on standby and not to proceed with the court case. It awaits a judge's approval.

Earlier this year, the court denied the plaintiff's request for a preliminary injunction. An appeal of the ruling also would be put on hold under the agreement.

Energy Fuels acquired the Canyon Mine last year from Denison Mines Corp. The surface work on the project, including the hoist, evaporation ponds, environmental monitoring facilities and buildings at the site have been completed, the company said. The shaft was about 300 feet but needed to reach 1,500 feet to access the body of uranium ore that would be shipped to a mill in Blanding, Utah.

The company wrote in a letter to Kaibab National Forest supervisor Mike Williams that it would give a two-week notice to resume work.