To meet growing demand for uranium worldwide, Australian-based Peninsula Energy Ltd. said that it has begun construction on a central processing plant in northeastern Wyoming.
The company’s Ross processing plant will take uranium processed at other Peninsula-owned mines in northeastern Wyoming and produce yellowcake, which is then shipped to Illinois to turn into enriched fuel for nuclear reactors.
The fuel supply chain looks upbeat for Peninsula.
On Monday, Peninsula expanded its estimate for uranium underground in its flagship Lance project near Gillette by 7.8% to 58 million pounds.
The company also expanded its estimates for uranium deposits by 19.6% to 26.2 million pounds in its nearby Ross and Kendrick mines, also located in the northeastern Wyoming area.
“This resource growth comes at an opportune time with the United States government continuing to take meaningful action to reinvigorate its domestic uranium production and nuclear fuel cycle capacity, [while] the company continues preparing for the resumption of commercial production at our U.S.-based Lance projects,” said Wayne Heili, Peninsula’s managing director and CEO, in a prepared statement.
Uranium Going Nuclear
Several uranium companies in Wyoming are posturing for increased production of the commodity because of higher demand in the United States for nuclear fuel, especially since federal lawmakers have responded to Russia’s invasion of Ukraine by banning imports from Russia.
This month’s ban by Washington has spurred domestic development of nuclear fuel for reactors and led to many uranium mining companies to restart production in Wyoming and elsewhere.
Uranium spot prices hit $107 per pound in early February but have since backed off to about $91 a pound as of Monday, according to Atlanta-based UxC LLC, which tracks uranium spot prices on a nuclear fuel exchange.
Peninsula does business in Wyoming through its Strata Energy Inc. unit, which operates the Lance project near Gillette and other mines.
The Ross central processing facility is a key part of Peninsula’s supply chain in Wyoming.
“This is a key piece of the jigsaw for us, providing the ability to produce a finished product for our customers without having to rely on any third-party processing facilities,” Heili said.
“We remain confident of hitting our production targets for 2025,” he said.
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.
Double Capacity At Ross
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.
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.
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.
In March, Peninsula agreed to sell between $88 million and $117 million worth of Wyoming uranium to a European nuclear fuel buyer from the Lance project.
To pay for restart of production at the Lance facility, Peninsula raised nearly $60 million in late 2023. Combined, the company plans to take uranium mined at the Kendrick, Barber and Dagger project in Crook County, Wyoming, and convert it to yellowcake at the Ross processing facility.
The agreement with the European buyer requires the company to sell 1.2 million pounds of uranium over a six-year period starting in 2028 to Synatom, which manages the supply of enriched uranium to Belgium’s nuclear power plants.
With the inclusion of this new sales agreement, the company’s total contractual sales obligation over the upcoming decade is 6 million pounds.
Pat Maio can be reached at pat@cowboystatedaily.com.
