There’s a new yellowcake mix on the market, but it’s definitely not Betty Crocker’s.
It’s the first batch of yellowcake uranium produced by Uranium Energy Corp. from its Christensen Ranch project in the Powder River Basin of northeast Wyoming. It’s fully processed and drummed up, ready for an eventual trip to Metropolis, Illinois.
Once there, global uranium supplier ConverDyn will convert UEC’s yellowcake blend to white uranium hexafluoride, beginning its journey toward enrichment and, eventually, nuclear fuel rods for America’s re-emerging nuclear power sector.
ConverDyn acts as a sort of clearing house for converted uranium — much the way a grain elevator handles bulk commodity sales for agricultural producers.
The relationship with ConverDyn positions UEC — an unhedged uranium producer with no contract obligations to fulfill right now — well for capturing upside potential in future uranium price swings. That’s a huge advantage for what is now the nation’s No. 1 uranium producer.
“ConverDyn receives uranium from multiple companies, from all around North America and even parts outside of North America,” UEC Senior Vice President U.S. Operations Brent Berg told Cowboy State Daily.
Still, this first batch of yellowcake produced by UEC won’t be heading to ConverDyn right away. The whole Wyoming plant is in a shakedown mode right now, testing and tweaking all of its processes, in preparation for ramping up to full speed ahead.
“We’re now six months into ramping up operations,” Berg said. “We first started up the Christensen Ranch mine in August of last year. So, this milestone is right on schedule, and we’re all pretty excited about it.”
Berg said the first shipment won’t go out until there’s a full load of yellowcake.
Each 55-gallon drum of yellowcake weighs 800 pounds, and a full load is typically 40 such drums.
TerraPower Still On Books
UEC continues to have a memorandum of understanding to potentially supply the plant TerraPower is building in Kemmerer with Wyoming uranium.
The deal is one of many TerraPower has struck with various companies as it works on building the nation’s first commercial Natrium reactor, which will use sodium salts as a coolant.
Wyoming is becoming a more crowded field when it comes to uranium production, Berg acknowledged, but UEC retains a huge advantage in this field — prior producing assets. Those were relatively quick to activate when the price of uranium really started spiking upwards, as company after company announced new nuclear intentions.
That had uranium prices hitting the $106 per pound mark in January, an eye-popping amount. Prices have more recently been tamed a little, and were sitting at $64.70 per pound Wednesday afternoon.
Moving To No. 1
UEC has taken several steps to bolster its market position since returning some of its nearly two dozen Wyoming uranium sites to production.
In December, it announced the acquisition of global mining company Rio Tinto’s former Wyoming uranium assets. That move made it the nation’s largest uranium producer with a production capacity of up to 12.1 million pounds of uranium annually, 8.1 million of which will be produced in Wyoming using an in-situ recovery process.
In Situ literally means “in place.” The process involves drilling wells to dissolve underground uranium deposits, then pumping the uranium concentrates to the surface for processing.
Because it leaves a majority of the unwanted material in place, it’s considered by many experts in the sector to be a more environmentally friendly way to obtain uranium. There are fewer wastes for disposal, which also makes the process less costly.
Berg said UEC has been working to activate more mining sites in Wyoming, in addition to the newly started Christensen Ranch site, which is located in Johnson and Campbell counties.
“We’ve finished drilling new wells and we’re currently constructing the header houses or modules, as they’re called,” Berg said. “So we plan to bring on fresh production soon.”
The company also had nine drilling rigs on site at Christensen Ranch, but now has 10, helping to increase production there.
The rest of the company’s 4 million tons of production will come from its other sites, including uranium mines in Texas. A new satellite ion-exchange facility is being built there that will operate like the Irigaray Central Processing Plant in Wyoming, which will serve 10 different mining projects.
“Construction is going really well down there,” Berg said. “And as far as I know, that’s the only Greenfield uranium project in the United States that’s being actively developed.”
Keeping The Market Cornered
But the company isn’t stopping with new uranium sites. It’s also looking at ways to be more efficient when it comes to processing uranium.
“We’ve got a project underway with Notre Dame, where they’re looking at how to reduce the amount of hydrogen peroxide that’s used in processing uranium,” Berg said. “And they were actually just at the site this week, seeking what the full-scale operation looks like, relative to what they’re doing in the lab.”
That new technology and research is part of a longer-term gameplay to keep UEC ahead of the pack, Berg said.
“That should help improve our costs, and there’s environmental benefits, too,” Berg said.
With no debts and its status as an unhedged producer with no specific contracts on deck, UEC is positioned well to fully capture future upward price swings for uranium. Its relationship with ConverDyn, one of only two uranium conversion facilities in the western world, is also a huge strategic advantage, all of which bodes well for positioning Wyoming as a leader in the rapidly re-emerging nuclear energy market.
Renée Jean can be reached at renee@cowboystatedaily.com.
