A uranium resurgence in the Cowboy State has embraced a boomtown mentality that Wyoming hasn’t seen in 50 years.
Scott Melbye, CEO of Uranium Royalty Corp., which has deep ties to Wyoming’s uranium industry, was in Kazakhstan on Monday to listen to a parade of speakers at an international conference who are discussing the latest in global politics and their impact on uranium markets.
The market forces are complex.
Global supplies are tight, the United States is beginning to embrace tiny nuclear reactors as a form of clean energy, and fears are growing over dependence on Russia for enriched uranium as the nation’s war aims in Ukraine continue to drag on.
There are some jitters growing about Kazakhstan as well. The nation, which produces about 45% of the global uranium supply, has Russia on its north and China on the east.
Melbye is typically based in Denver at his company’s U.S. headquarters, but the international conference sponsored by the Washington, D.C.-based Nuclear Energy Institute and London-based World Nuclear Association drew him to Kazakhstan to get an insider’s view of the market forces that could breathe new life in the domestic uranium industry.
In the case of Wyoming, Melbye told Cowboy State Daily by phone from Kazakhstan that the state is attracting capital at a pace he hasn’t seen in decades. Sure, there are other uranium hotbeds — like Texas, Colorado, Arizona, Nebraska, Nevada, New Mexico and Utah — but Wyoming is seeing a full-blown startup of a mining industry that previously sat idle for years.
“Wyoming clearly stands to be a leader in uranium production again,” said Melbye, who also wears the hat as president of the Uranium Producers of America.
How Wyoming Does It
Instead of digging up uranium in a mine or surface pit, Wyoming’s mining companies perform in-situ recovery of the mineral. This kind of operation involves pumping oxygenated water with an occasional addition of bicarbonate of soda into the ground to get at the uranium.
In-situ mining has low environmental impact, he said.
In this process, the uranium is dissolved and pumped to the surface, where the mineral is stripped from the water. The water stripped of uranium is then returned underground.
There is a strong connection between Melbye’s uranium company and Uranium Energy Corp., which is ramping up production in Wyoming.
Uranium Energy Corp., which is a majority shareholder of Melbye’s company Uranium Royalty, has four licensed and permitted projects in Wyoming and another three in Texas. As a royalty company, Uranium Royalty doesn’t mine and operate the projects but instead act as a financer.
Uranium Royalty earns a certain profit, or “royalty,” on its investments. The royalty it receives entitles the holder to a share of the profit realized from the sale of production from the property after deducting costs related to production.
Russia’s Wyoming Tie
Uranium Energy expects to begin production at its Willow Creek project in August, said Donna Wichers, vice president of operations for her company that fortuitously acquired the Willow Creek operations from Russia’s State Atomic Energy Corporation, or Rosatom, back in 2021 for $112 million.
The deal closed only a few months before Russia invaded Ukraine.
After Uranium Energy took over the Willow Creek operations, Wichers said that her company needed to translate some of the technical and other financial governance documents into English from Russian.
“If there was a decision to be made for mining operations that we’d need to know about, then we’d get them translated,” said Wichers of the Russian documents.
UEC, which has its state headquarters in Casper, is licensed to produce 2.5 million pounds annually in Wyoming and is waiting for approval from the state Department of Environmental Quality to add another 2 million pounds, Wichers said.
A Brisk Sector
Restart of the Willow Creek project, which includes the Irigaray central processing plant and Christensen Ranch as a licensed and permitted satellite to the Irigaray operation, is located in Pumpkin Buttes about 55 miles southwest of Gillette.
Last week, Australian-based Peninsula Energy Ltd. said that expansion work on its Ross central processing plant began at its Lance project near Gillette in northeastern Wyoming.
Samuel Engineering Inc., with offices in Wyoming and Denver, was hired by Peninsula to get the project ready for restart of production before the end of 2024.
Last month, Peninsula agreed to sell as much as $117 million worth of Wyoming uranium to a European nuclear fuel buyer from the Lance project.
Peninsula said that it plans to sell between $88 million and $117 million worth of uranium through its Strata Energy Inc. unit, which operates the Lance project.
The Ross plant was originally built in 2015 as an alkaline in-situ recovery facility capable of producing up to 1 million pounds annually of uranium. Samuel was hired to build additional plant facilities to expand production capacity to 2 million pounds.
John Cash, president and chief executive officer of Ur-Energy Inc. in Casper, previously told Cowboy State Daily that his company restarted production last spring, hiring 50 workers.
He said that more workers could be hired should his business negotiate more utility contracts. The growing demand for uranium could lead his firm to open its Shirley Basin mine in Carbon County.
Ur-Energy, the largest producer in the U.S. through its Lost Creek operation in Wyoming, nailed down three major long-term contracts with electric utility giants over the past year. Those deals were viewed as the catalyst to boost uranium production, Cash said.
Pat Maio can be reached at pat@cowboystatedaily.com.
