EPA 620/1-834)10
Regulatory Impact Analysis
of
Final Environmental Standards
for
Uranium Mill Tailings at Active Sites
September 1983
Office of Radiation Programs
U.S. Environmental Protection Agency
Washington, D.C. 20460
-------
TABLE OF CONTENTS
Page
Summary S-l
1. Introduction 1-1
2. Industry Profile 2-1
2.1 Demand 2-1
2.2 Supply 2-13
2.3 Financial Condition 2-23
3. Objectives of Standards and Control Methods 3-1
3.1 Goals of Radiation Protection for Tailings Disposal 3-1
3.2 Control Methods 3-2
3.3 Protection for the Long Term or the Short Term 3-9
4. Benefit-Cost Analysis 4-1
4.1 Ove r vi ew 4-1
4.2 Formulation of Alternative Disposal Standards and 4-1
Selection of Control Methods
4.3 Cost Analysis 4-4
4.4 Benefits Analysis 4-7
5. Industry Cost and Economic Impact Analysis 5-1
5.1 Industry Cost Analysis 5-1
5.2 Economic Impact Analysis 5-16
6. Selection of Standards 6-1
6.1 Operations Standards 6-1
6.2 Disposal Standards 6-9
APPENDIX A. Mill Closure Analysis A-l
APPENDIX B. Projections of Price, Demand, and Production B-l
APPENDIX C. Annual Industry Disposal Costs, By Economic C-l
Impact Case and Industry Category, 1983-2000
APPENDIX D. Regulatory Flexibility Act Certification D-l
-------
SUMMARY
Background
The Environmental Protection Agency was directed by Congress, under
PL 95-604, the Uranium Mill Tailings Radiation Control Act of 1978
(UMTRCA), to set standards of general application that provide protection
from the hazards associated with uranium mill tailings. Title I of the
Act pertains to tailings at inactive sites for which the Agency has
developed standards as part of a separate rulemaking. Title II of the Act
requires standards covering the processing and disposal of byproduct
materials at mills which are currently licensed by the appropriate
regulatory authorities. This Regulatory Impact Analysis (RIA) addresses
the standards promulgated under Title II. On April 29, 1983, EPA proposed
these standards, accompanied by a regulatory impact analysis of the
proposed standards (EPA 520/1-82-023).
There are two major parts of the standards for active mills:
standards for control of releases from tailings during processing
operations and prior to final disposal, and standards for protection of
the public health and environment after the disposal of tailings. This
report presents a detailed analysis of standards for disposal only, since
the analysis required for the standards during mill operations is very
limited. The analysis for the operations standards is limited because
most of the requirements reflected by these standards are already in
existence through regulations established under the Atomic Energy Act
(AEA), the Clean Water Act (CWA), and the Solid Waste Disposal Act
(SWDA). Also, UMTRCA directs EPA to develop groundwater protection
standards which are consistent with the standards promulgated under the
SWDA, as amended. Consequently, there are very few regulatory alternatives
to be considered in the development of standards for control of mill
tailings during the operational phase of a mill. For completeness, the
operations standards and an explanation of their basis are presented in
this report along with the disposal standards. The reader should refer to
the Final Environmental Impact Statement (FEIS) which accompanies the RIA
for more information on the analysis of the operations standards.
Methodology
The analysis consists primarily of an examination of the overall
benefits and costs associated with the disposal of uranium mill tailings.
This analysis gives some indication of what level of control of the
hazards is most cost-effective, but cannot, of itself, be used to
determine the final standards. These must also address the maximum
exposure of individuals and reflect the technical practicability of
implementing undemonstrated technology for control over very long periods
of time. An economic impact analysis which estimates the economic
consequences of incurring the costs of alternative standards was also
carried out to determine that the values chosen for standards could be
reasonably imposed.
S-l
-------
We performed separate benefit-cost analyses for existing tailings and
new tailings piles to reflect differences between past and future
practice, both of scale and of control methods. Since the standards are
generally applicable technical performance and containment standards
rather than engineering design standards, they do not specify particular
methods of compliance. For analytical purposes, however, we determined
disposal methods which correspond to each of the alternative standards.
These methods assume different degrees of earthen cover and surface
stabilization as the technique for providing long-term control. We
estimated costs for these tailings disposal methods, conservatively, to
account for uncertainties in design parameters, and performed the
calculations on the basis of model piles. In the benefits analysis, the
health effects averted by control of radon emanation from tailings piles
is the only benefit we can quantify. We performed an analysis of the
incremental cost per radon death avoided for the alternative standards to
determine what level of control may be justified on the basis of
benefit-cost analysis. Since this analysis only takes into account one of
the benefits of tailings disposal, we developed an alternative analysis
which incorporates all the benefit categories into a single measure. We
developed an effectiveness index which rates each disposal method
according to its effectiveness in providing four specified control
classes: inhibition of misuse, radon control, prevention of the surface
spread of tailings, and water protection. A cost-effectiveness analysis
was then used to evaluate the incremental costs for each disposal method.
Based on the analysis of the incremental cost per radon death avoided and
the cost-effectiveness analysis, we selected candidate disposal standards
which represent optimal levels of control. These were reduced to a final
selection based on consideration of practicability and the feasibility of
reducing risks to the maximum exposed individual. The determination of
implementation requirements for the standards, such as the groundwater
protection requirements at existing mills, was based on considerations
beyond those addressed in the benefit-cost analysis and is discussed in
Chapter 6.
Alternative Standards
Table S.I lists 13 alternative standards which we have considered for
the control of mill tailings after disposal. These alternative standards
are stated in terms of a radon emission limit and/or a requirement for
longevity of control. The combination of these two requirements will
satisfy the objectives of misuse inhibition, radon control, prevention of
surface spread of tailings, and water protection. The alternative
standards range from no controls to substantial levels of control which
approximate the achievement of basically the same environmental
consequences as might occur if the uranium ore had not been mined. Five
alternative radon emission limits were analyzed: no emission limit, 60
20, 6 and 2 pCi/m2s. Three alternative longevity requirements were
considered: active control of tailings for a period of 100 years, a
1000-year requirement for passive control, and the 1000-year requirement
for passive control achieved together with improved radon control during
mill operation for new tailings piles. Alternative standards B and C
S-2
-------
Table S.I. Alternative Disposal Standards
Longevity
Requirement
2
Radon Control after Disposal (pCi/m s)
Mo Radon Requirement 60 20 6
2
No Controls
Active control
for 100 years
Passive control
for 1000 years
Passive control for
1000 years, with
improved radon control
during operations
for new piles
A
Bl
Cl
B2 B3
C2 C3 C4 C5
D2 D3 D4 D5
S-3
-------
assume a uniform level of control for both existing and future tailings
while Alternative D requires the additional control of radon during
operation for new piles. Although this last requirement is directed
toward the operating phase of a mill, the method of compliance (phased
disposal) is a different disposal configuration from that assumed in
Alternative C. Therefore, it is only applicable to new tailings piles
which can design for such a requirement before tailings have already
accumulated. Table S.2 summarizes the benefits of each alternative
standard through the use of several quantitative and qualitative
measures. Table S.3 presents the costs of each alternative, as well as
the control method assumed for the cost estimation.
The chance for misuse of the tailings under each alternative standard
is estimated to range from likely for Alternative Bl and Cl to very
unlikely for Alternatives C4, C5, D4 and D5. For measuring the prevention
of surface spread of tailings, we use the estimated time period over which
erosion of the tailings by wind and water would be avoided. These
estimates range from a hundred years for Alternative Bl to many thousands
of years for Alternatives C4, C5, D4 and D5. For radon control,
Alternatives Bl and Cl would reduce emissions by 50 percent from the
uncontrolled state over the first 100 years after disposal, while
Alternatives B2, C2, and D2 would result in an 80 percent reduction and
Alternatives B3, C3, and D3 a 95 percent reduction. Alternatives C4 and
D4 would provide a 98.5 percent reduction in radon emissions, while
Alternatives C5 and D5 would have a reduction of 99.5 percent from the
uncontrolled condition. For a period of 1000 years or greater, the
percentage reductions in radon emissions for Alternative Bl, B2 and B3 -
the active maintenance methods - would be less than those stated above
since after the maintenance stops, the effectiveness of the earthen cover
is expected to decline. We estimate that the percentage reduction in
radon emissions for these alternatives over a period of 1000 years will be
20, 30, and 35 percent, respectively. The radon deaths avoided by these
controls and the maximum risk of lung cancer to individuals residing close
to the piles which correspond to each alternative standard are shown in
Table S.2. The additional benefit of radon control during mill operations
for new piles is not included in this table for Alternative D. For water
protection, we estimate that the alternative standards would provide a
range of protection from 100 years duration for Alternative Bl to greater
than 1,000 years for Alternatives C4, C5, D4, and D5.
The costs of the alternative standards in Table S.3 are segmented by
two categories of tailings: existing tailings and future tailings. The
future tailings are those which we estimate to be produced from 1983
through the year 2000 according to recent Department of Energy
projections. A range in disposal costs for future tailings is presented
for each alternative which represents different assumptions on the
implementation of groundwater protection requirements during the
operational phase of a mill. The lower cost estimate assumes that all
future tailings at existing mills are added to existing impoundments and
disposed of (covered) together. No corrective actions at existing piles
for compliance with groundwater protection requirements are assumed. The
S-4
-------
§
•H
1 I
+J
CJ
CU
O
M
CM
CU
JJ
cd
co
XJ
M
cd
xl
I J
co
H
co
o
ft
CO H
•H O
a M
4-1
cu d
> 0
•H 0
4-1
cJ o
M ""O
a) cd
4j |v*
,_J
•^i
o
4H
CO
iH
CU
d
cu
pfl
4H
O
M
3
3
en
d
o
CM -H
4-1
co cd
N
0) tH
H H
r*3 lH
H cd
4-1
cn
4J '•"'N
•r-l CO
> M
CU Cd
00 CU
q v—<
H
cd
4-1
-s H
Q
X)
CU O CO
X) 0 M
•H O Cd
o - co
t> H >i
CQ
si 4-1 co
4-1 CO O M
cd M o cd
CU -rl H CU
f^ [~Tj ^^
•^
cd M
./ 0) ^
ca d o
•rl Cd -rl
f*J O 4-1
o
a op 3
3 d Xl
a 3 01
14
ri
Cd 4H S«
S 0 ^
X)
cu
X)
•H
CO O ^
00 > CO
d CQ
•H Id
4-> 1-4
§cti
^3
M d
cu cd
^J ^J
i~H c/3
^C
0 O O O
o o o
H H H
o o o o
o o o
CM OO H
H H «M
o o o o
o o o
CM 30 H
H H JM
O O O 0
o oo r^
oo st- in
/~N /-*\ X*~S
r-s o o ^n
o in oo CTI
CM CM CO OO
o o o o
H H H rH
d d d d
CM H -3- H
CO CO
CU 01 OI
CO Xl Xl Xl
d d d
^> ^"» ^"»
H H H
01 01 CU
•H iH -H
r-| >, J 1-^
H
>, CU CO CO
M J4 CQ CQ
^ i 1 v— 4 ii
H CM 00
, W CQ CQ
o d d d d
rj cd 01 01 0)
H S H H rH
O O O O 0
o o o o o
O 00 Is* CT« O
oo *^ in in ^o
o o o o o
o co r^ CT* o
oo -^ in m vo
s~\ ^~\
tn m
/""N X"N **^ • •
O O 'O 00 O^
i-O 00 O^ C?^ O^
CM oo co "^d" •*3'
o o o o o
H H H H iH
a a 0 a a
rH^H^H
CQ CO
r^ i-(^
d d
co co c« cd
Xl Xl CQ CQ
x) d d 3 3
cu cd cd o o
r-l CO CQ ,3 ,d
Xl 3 3 4-1 4J
d o o
ffi rH tH d d
M (rj
y *y|
^1 ^>
H H
>> CO CO
0) tH -H
H H"^ "d"
f^l K^
0) CO iH >, {>-,
£i CQ H r-l rl
r—1 V-H \ — * t* ^*
T— 4 CM CO "^J" LO
CJ U CJ CJ CJ
o o o o
o o o o
o o o o
H H H rH
A A
CQ CQ CQ
O O O
CO O O O
- o o o
0 H H H
o
O 4H 4-1 4H
H O 0 O
>i CQ CO CO
d d d d
jd 0) o) oi
S H H H
o o o o
o o o o
00 l-x CT> O
»^ in in vo
o o o o
00 PN. O^ O
^ LTJ in vo
y»"N X^,
in in
S~\ ^™N • •
CO iO 00 O^
OO CTv J\ O^
CO CO "^ *^
O O O 0
H H H H
d d d d
•<»• H n H
CQ CQ CO
*x3 *r3 ""^
d d d
co cd cd cd
X) CQ CQ CQ
d 3 3 3
cd o o o
CQ X! -d J3
3 4-1 4-1 4J
o
rH 1" d 5"
^ ^ ji?*
X >-i
H H
CO CO
•H -H
^^"3 "d
CO co 3 3
•rl -H >s >>
M 0 CD cu
p^ t3 ^ ^>
CM CO "^ LT>
Q Q Q O
•
H >,•>
cu 4J ^ ca
X) -rl 4-1 d
O 0) > O
H X) 0) 4-1 iH
•rl 00 0 4-1
cd >• d -H
O O X)
4H >-l H • d
O ft CO O
4-1 4-1 CJ
rl O O d .
0) 4J 0) H
4J X) HO
d X) O Cd rl
0) 0) -H > 4J
a J-i r-i iH d
•rl OI 3 O
Oi 3 ft 0" cJ
J3 a" cu
4-1 CU X) O •
M d 01 d CQ
a cd H oo
0 CO -H M d
M M H ft CU -H
m o cu x> H
4-1 > £ d iH
CQ o cu cu 3 cd
rl Cd H d 4J
0) 4H CO
4-1 H TJ rl 0)
cu oo o o) cd r-i
a d M 4-i cu 3
•H 4-1 CJ p*. 4J
O M d CU 3
O CU O TOO 4-1
vO CU CJ O O
d MHO
OpiH d ft 4J
d oo o 4-1
•rl d Xl CTN CQ CO
> CU cd M 3
•H M Xl "H Xl
H M d 4H
o xJ cd cu
0) 4-1 CD CD i-l
,£) -H CQ A cd
4-1 CH n) 4J
O iH -H H O
4J Xl CJ -H d O
CO CO ftnH rH
X) M ft
CU CJ CQ 00 M xl
a d 3 d
3 O 0) -H CJ cd
CQ d rd 4-1 O
CO 4-1 CQ O CQ
cd CU -H 00
a M x o d
H 3 O CU 4-1 TH
cd CO 4H H
3 CO *O XI TH
xi cd cu CN cu cd •
•H CJ 4J 4-1 CO
> CO d 4-1 cd H
•rl 4-1 Cd O a 00 M
X) -H -H -rl d ^
d 4H H H 4J -H
•H 0) ft O CO 4-1 CU
da M CU CO rC
d 0) O 4J -rl 4-1
cd jz o d » OI •*
CO H cd H M
TH -H CU a 0) ctf 0)
V, ftH -H 4J H
& 4j cd O »Q
cu co cd CQ a o cd
a op d -> VX CO
S-5
-------
CD
4-1
CO
O
O
4J
t-l
0
£5
4J
C
CU
CO
cu
ri
CO
t-l
CO
c
CO
4J
*o
I— 1 ^
cd ^~*
0 §
S o
CO °
O -a
cu '"v C
> £ °
°4J W ~
crt ""^ ^
e i— I 4.)
r o co
£ "° o
^ 00 >,
**• ON t-l
tl *~~* •*-*
o w
*iH D
O *O
w ^
*j w M
c
cS-2
14H '~l
°3
s
c V-i
*^ ^
OT 0
C_?
CO
•
C/}
C
CU C
t-l -H
3 rH
4J T-l
3 cfl
Pn EH
60 co
B W)
•rH C
4-1 TH
CO rH
•rH -H
X Cfl
W H
CO '-v
CO CO
CU t-i
B •>
> .1-1 B
O i-H tH -|H O •
,O •• IH CO o
<1 oo T-I g I-H
i-H CN CO
PQ M CQ
^D co r^* »*~i LO
I-H co ro m m
co *j- to vo r^.
1 1 1 1 1
r^ O *sJ" f^* *st"
in *^* t-H ON r^>
—I CN CO CO -d"
r^> r-H
vO CO vO OO vO
CN CN ON •— i CO
VO OO ON •— i rH
1 1 1 1 1
vO 00 OO ON r^
r~> ON o CN <}•
CN co in vo r~
-H I-H
•> O O T-l
cu m co a.
•o - t-i •
Cfl CU CU O fS 14H
H Ou > rH O
MOO •> £>
| rH CJ CO J3 O.
CU CO CU 01 O
> ^ a. tx 4-1
O •— i CJ O
f> .« O 1— 1 14H C
co CX, O
6 -iH "U CO i-H tH
8 X B T-I CU O
C/3 CU Cfl Tj JU 14H
CN co ~HT m
a o o o
•
r-
*
m
cu
rH
CO
H
TD
B
CO
oo
•
«^-
cu
rH
CO
H
fc^
CU
o
1-1
3
O
to
S-6
-------
higher cost estimate assumes that all future tailings at existing mills
are placed in new impoundments equipped with liners for groundwater
protection and disposed of separately from the existing piles. We believe
that the total cost for the industry will most likely fall within this
range.
Final Standards
Operations Standards
In accordance with the Act, the operations standards for primary
groundwater protection require that tailings impoundments be designed to
prevent seepage of leachate from tailings into groundwater. The secondary
groundwater standards are based on the monitoring and response concept,
consistent with SWDA, as amended. Nondegradation standards for
groundwater are for hazardous constituents that are in or can be derived
from tailings, except for a short list of toxic materials for which
concentration limits are specified. In addition to the list of hazardous
constituents specified under SWDA standards, the standards add two
hazardous elements commonly found in tailings: molybdenum and uranium.
Concentration limits are also added for alpha radioactivity. If
background levels or concentration limits are exceeded, a corrective
action program consistent with SWDA, as amended, must be initiated as
approved by the regulatory agency.
Existing standards and regulations for control of radionuclide
particulate emissions to air under the AEA (40 CFR Part 190) and effluents
to surface water under the CWA (40 CFR Part 440) for uranium mill tailings
are not changed by these final standards. Radon emissions from uranium
mill tailings during the operational phase of a mill are currently
controlled by general NRC regulations (10 CFR Part 20) derived from
Federal Radiation Protection Guidance and are not changed by these
standards. However, an Advanced Notice of Proposed Rulemaking is being
prepared to solicit and collect information for the Agency to consider
further the control of radon during operation of tailings impoundments.
Disposal Standards
Based on the benefit-cost analysis of control methods, plus
consideration of the technical practicability of implementing
undemonstrated technology and the feasibility of reducing risks to maximum
exposed individuals, we have chosen Alternative Standard C3 for the
disposal standard. The standard requires that control of uranium
byproduct materials be designed to provide reasonable assurance that they
will be effective for 1000 years and that releases of radon-222 to the
atmosphere will not exceed an average rate of 20 picocuries per square
meter per second. The standard requires control of hazardous waste
constituents listed under 40 CFR Part 261 to prevent their escape to
ground or surface waters or to the atmosphere to the extent necessary to
protect human health and the environment. Also, disposal of uranium mill
tailings shall be done in a manner which minimizes the need for further
maintenance.
S-7
-------
Benefits of Standards
Under the standards, the tailings would remain covered and isolated
for 1,000 years or more. Therefore, we believe that the possibility of
the misuse of most tailings will be unlikely for many thousands of years.
Radon emissions from the disposed tailings will be significantly reduced
from what they would be in an uncontrolled state. We estimate that the
total deaths avoided by radon control alone would be several thousand
during the first thousand years, compared to tailings which are left
uncontrolled, and many tens of thousands over the entire useful life of
the controls. The health risk to people living very near the tailings
piles will be reduced from about 2 chances in 100 of fatal lung cancer
during their lifetime to about 1 chance in 1,000. Also, it is estimated
groundwater would be protected for thousands of years under the
standards. Finally, the possibility of contamination of land by erosion
of tailings would be virtually eliminated for many thousands of years.
Cost and Economic Impacts of Standards
We estimate that compliance with the standards, if other regulatory
requirements did not exist, would cost the uranium milling industry from
about 310 million to 540 million dollars to dispose of all tailings which
exist today at licensed sites, as well as those which we estimate will be
generated by the year 2000. These costs are present worth estimates
(discounted at a 10% rate) expressed on a 1983 constant dollar basis. The
range in cost is due to different assumptions on the Implications of the
requirement for groundwater protection for future tailings at existing
mills.
We estimate that the average uranium price may increase from 2 to
7 percent. In light of the currently poor economic condition of the
industry and the threat of foreign competition, it is unlikely that mills
will be able to pass through substantial portions of the disposal costs to
their customers. Based on our model mill closure analysis which was
performed under a variety of cost pass-through and cash-flow conditions,
we estimate that no mills will cease operation due to control of tailings.
These costs are not incremental costs of the standards, since much of
this cost would probably occur in the absence of the standards due to
other regulatory requirements. These other requirements are Nuclear
Regulatory Commission (NRG) licensing regulations and State regulations,
and regulations required under Section 84(a)(l) and (3) of UMTRCA. We did
not estimate the costs imposed by these other regulations in part because
that would require a site-specific investigation. Since our standards are
required by Congress to be of general application, we decided to develop a
generic analysis based on model facilities. Therefore, we could not
estimate the net impact of the standards.
S-8
-------
Regulatory Flexibility Analysis
The standards would not have a significant impact on a substantial
number of small entities, as specified under Section 605 of the Regulatory
Flexibility Act (RFA). Therefore, we have not performed a Regulatory
Flexibility Analysis. The basis for this finding is that of the 27
licensed uranium mills, only one qualifies as a small entity, and this
mill will not be impacted by the standards. Almost all the mills are
owned by large corporations. Three of the mills are partly-owned by
companies that could qualify as small businesses, according to the Small
Business Administration generic small entity definition of 500 employees.
However, according to the RFA, a small business is one that is
independently owned and operated. Since these three mills are not
independently owned by small businesses, they are not small entities. The
Regulatory Flexibility Act certification is presented in Appendix D of
this RIA.
S-9
-------
1. Introduction
The existence of large quantities of uranium mill tailings at uranium
mill processing sites poses a significant hazard to health. Tailings are
hazardous because: (1) breathing radon and its decay products exposes the
lungs to alpha particles; (2) breathing particulates of thorium, uranium,
and their decay products exposes the lungs to alpha particles; (3) the
body may be exposed to gamma rays; (4) radioactive materials and
nonradioactive toxic elements from byproduct material may be swallowed
with food and water. Since the radioactivity from these materials lasts
for hundreds of thousands of years, the cumulative effects of tailings may
be large. Detailed assessments of the hazards associated with human
exposure to tailings are presented in the FEIS. This RIA draws on those
results for its quantitative assessment of the benefits of control of
tailings.
Congress recognized this problem when it passed PL 95-604, the
Uranium Mill Tailings Radiation Control Act of 1978 (UMTRCA): "The
Congress finds that uranium mill tailings located at active and inactive
mill operations may pose a potential and significant radiation health
hazard to the public....and that every reasonable effort should be made to
provide for the stabilization, disposal, and control in a safe and
environmentally sound manner of such tailings." The Environmental
Protection Agency was directed to set standards of general application
which provide protection from the hazards associated with both the mill
tailings at designated inactive sites of milling operations (Title I) and
the processing and disposal of byproduct material at presently licensed
and future mills (Title II). This RIA addresses only the standards
developed under Title II. The standards for inactive mill sites have been
previously issued by the Agency.
Scope of Standards
There are two major parts of these standards: control of releases
from tailings during processing operations and protection from the
tailings after disposal. However, this RIA addresses the standards for
tailings disposal only. This is because most of the requirements
reflected by the operations standards are already in existence through
regulations established under the Atomic Energy Act, the Clean Water Act,
and UMTRCA itself. Consequently, there are very few regulatory
alternatives to be considered in the development of standards for control
of mill tailings during the operational phase of a mill.
During mill operations all radioactive effluents are regulated under
the Environmental Radiation Protection Requirements for Normal Operations
in the Uranium Fuel Cycle (40 CFR 190) except radon emissions. These
standards, which apply during processing operations only, were published
on January 13, 1977, and became effective for uranium mills and byproduct
material on December 1, 1980. However, radon was excluded because of
1-1
-------
insufficient knowledge at the time 40 CFR 190 was established. EPA is
considering requiring control of radon emissions during mill operations
under the Clean Air Act (CAA). An Advanced Notice of Proposed Rulemaking
is being prepared to solicit and collect information for the Agency to
consider further the control of radon from tailings piles during the
operational period of a mill.
During the operational phase of a uranium mill, discharges of process
wastewater are controlled under the Clean Water Act. Currently, the
regulations (40 CFR Part 440) require the use of best practicable
technology (BPT) for the control of effluents from uranium mills. Rules
were promulgated on December 3, 1982 (47 FR 54598, 40 CFR Part 440,
Subpart C), to provide BPT effluent limitations and to establish new
source performance standards (NSPS) under the Clean Water Act. These NSPS
rules specify that there shall be no discharge of process wastewater from
uranium mills in arid areas.
As required by UMTRCA, protection of groundwater from hazardous
materials in uranium tailings is to be provided by standards which are
consistent with standards required under subtitle C of the Solid Waste
Disposal Act (SWDA), as amended. EPA promulgated standards applicable to
owners and operators of hazardous waste treatment, storage, and disposal
facilities on July 26, 1982 (47 FR 32274, 40 CFR Part 261, Subpart F).
These same SWDA standards, supplemented by a few additions at comparable
levels of control for materials specific to uranium byproduct materials,
are proposed in these standards. We also note that, independent of these
proposed standards, UMTRCA also requires the Nuclear Regulatory Commission
(NRC) to implement the SWDA standards for groundwater protection in their
licensing requirements for uranium mills. Consequently, uranium mills
must comply with the SWDA groundwater protection standards even in the
absence of these standards.
Need for Standards
In recognition of the Agency's guidelines for preparing a regulatory
impact analysis, we discuss why we believe there is a need for the
standards beyond the fact that Congress directed us to do so. There is a
definite need for government intervention to mitigate this potential
health hazard since there is no market mechanism which would provide
health protection to the public. Disposal of mill tailings is not a
revenue-producing activity because the mill tailings are essentially a
waste product and have no value (although there is some small possibility
for mineral recoverability). In addition to the absence of market forces
to correct this problem, the lack of government control has increased the
potential for adverse health effects to occur. In the past, members of
the public not aware of the hazardous nature of tailings have hauled them
away from inactive mill sites for use as a construction material for their
homes. This greatly increases the health risk from the tailings from what
it would be if the tailings were left untouched. We conclude that there
is a need for government intervention to protect the public from the
hazards associated with the existing tailings inventory and from future
tailings generation.
1-2
-------
Historically, there was little Federal regulatory control of uranium
mill tailings until the mid-1970's. Control of tailings was not included
in the original licensing procedures for uranium mills by the NRC
(formerly the Atomic Energy Commission) because the tailings were not
known to be hazardous and were not a controllable material under the AEA.
With the passage of UMTRCA, Congress included uranium mill tailings under
the AEA, instructed EPA to develop generally applicable standards for
control of mill tailings, and directed NRC to incorporate the EPA
standards into their uranium mill licensing requirements. On October 3,
1980, NRC published final regulations for mill tailings disposal despite
the absence of proposed EPA standards (45 FR 65521). In the preamble to
their regulations, NRC recognized that their rules must be compatible with
the EPA standards and stated that their "regulations will be revised, if
required, when EPA standards are issued."
Currently licensed mills are located in seven States. Four of the
States - Colorado, New Mexico, Texas, and Washington - are NRC Agreement
States and have developed their own licensing regulations for uranium
mills. These State regulations include the management of uranium mill
tailings. Mills in the other three states - Utah, Wyoming, and
South Dakota - are licensed by NRC directly. These two State groupings
each represent about one-half of the total industry production.
Consequently, there is a need for Federal intervention since relying on
State regulations would only address one-half of the problem.
Furthermore, the Act requires that regulations for mill tailings developed
by the Agreement States should be "equivalent, to the extent practicable,
or more stringent than standards" promulgated by NRC and EPA. Therefore,
the State regulations are also dependent on the EPA standards.
Content of this RIA
In developing the regulatory options for this RIA, we have proceeded
as if the NRC regulations had not been issued. The NRC rules emphasize
requirements that a new mill must meet, but they state that regulations
for existing sites cannot be developed in a generic fashion but must be
considered on a site-by-site basis. In formulating the EPA regulatory
options, we have segmented the uranium milling Industry into existing and
new mills and have examined the benefits, costs, and economic impacts of
alternative levels of control on each segment.
In Chapter 2 of this RIA, we present a profile of the uranium milling
industry and a characterization of the existing mill tailings inventory.
Chapter 3 discusses the objectives of the standard and the alternative
ways to achieve them. Chapter 4 presents a benefit-cost analysis of
alternative disposal standards for existing and new tailings piles, on a
model pile basis. Chapter 5 presents the industry cost and economic
Impact analysis of several combinations of disposal methods. Chapter 6
presents the rationale for choosing the standards. Supporting
documentation and data displays are contained in the Appendices.
This RIA contains all of the elements set forth in the Office of
Management and Budget guidelines of June 5, 1981, for conformance with
Executive Order 12291.
1-3
-------
2. Industry Profile
This chapter develops background information on the structure and
economic condition of the uranium mining and milling industry. The
profile includes both historical and current data which form the
foundation for the economic impact analysis. Projections of industry
price, demand, and supply are developed in Appendix B.
The uranium industry is characterized by a relatively high degree of
concentration with major publicly held corporations accounting for a large
share of ownership in the industry. The industry experienced rapid growth
in the early and mid-1970's that was stimulated by expectations of large
increases in demand. The expectations of growth in demand proved to be
too optimistic leading to supply outstripping demand and resulting in an
economic slump for the industry. The industry is presently faced with
excess capacity, large inventories, lower than expected demand, greatly
reduced spot prices, and increased competition from imports. In response
to this situation, there is currently a significant amount of consolidation
activity in the industry (NU83). There are some producers who are
aggressively expanding their uranium holdings, while there are others who
are leaving the business by disposing of properties or closing production
facilities.
2.1 Demand
2.1.1 The Nuclear Fuel Cycle
The uranium mining and milling industry is only one component of a
much larger industry. The operations required to provide nuclear fuel for
and to dispose of wastes from light water nuclear power reactors (LWRs)
constitute the bulk of the U.S. nuclear fuel cycle. The various segments
of the LWR nuclear fuel cycle are:
o Uranium mining and milling
o UFg conversion
o Isotopic enrichment
o UC>2 fuel fabrication
o Interim storage and transportation of spent fuel
o Disposal of spent fuel, or recovery of fissile material from
spent fuel.
If the fissile fuel values are recovered, three additional fuel cycle
segments are present. These are:
o Reprocessing
o Mixed oxide fuel fabrication
o Disposal of reprocessing and mixed oxide fuel fabrication wastes.
2-1
-------
A schematic representation of the LWR fuel cycle is shown in
Figure 2.1.
The generation of nuclear-powered electricity is the only major
commercial source of demand for uranium in the United States, accounting
for approximately 98 percent of total demand. Depleted uranium, a
byproduct of the enrichment of natural uranium, is used in ordnance
(military weaponry), for radiation shields, and in research. The supply
of this byproduct greatly exceeds demand.
There are no substitutes for uranium in the production of nuclear
energy by LWRs, although plutonium is a supplement. Lead, tungsten, and
other heavy metals can replace uranium in nonnuclear applications.
Historical uranium concentrate production figures given in Table 2.1
show that the uranium industry had several periods of expansion and
contraction. The U.S. Atomic Energy Commission (AEG) encouraged an
expansion of the uranium industry following World War II by purchasing raw
ore, and later yellowcake, building access roads and offering special
incentives (Ta79). The expansion ended in the early 1960's when the AEC
reduced purchases because U.S. military needs had been satisfied. The
second major expansion began in the mid-1970's when confidence in the
future of nuclear power was high and uranium prices had begun to climb.
Production in 1980 reached nearly 20,000 metric tons of U3C>8, an
increase of 90 percent from the 1975 level of 10,500 metric tons.
Electricity generated by utilities supplies approximately 13 percent
of the nation's total energy needs, while nuclear power plants supply
about 12 percent of the nation's electricity (Ev83). Electricity demand
has grown slowly since the oil embargo in 1973. Since 1979, the annual
growth rate has remained below 2 percent and has declined steadily,
whereas the pre-embargo growth rate averaged about 7 percent per year
(DOE83a). The slowdown in demand may be attributed to increases in the
price of electricity due to higher fossil fuel and capital costs and
resulting conservation efforts.
Since there are no substitutes for uranium in the generation of
nuclear-powered electricity, a continuing demand for uranium is expected.
However, the rate of growth in future demand is unclear. Table 2.2 shows
the number of nuclear plants ordered each year from 1966 through 1982.
After 1973, the number of orders has fallen dramatically, from 38 in 1973
to two in 1978, and none since. Additionally, about 40 percent of the
total orders placed, representing 45 percent of capacity, has been
cancelled as of December 31, 1982. The annual cancellations of these
orders are also shown in Table 2.2. In 1982 alone, 18 units were
cancelled. Also, many reactor projects have been significantly delayed.
Currently, there are 76 nuclear power reactors licensed to operate in the
U.S., and about 11 plants should begin operations in the next two years
(DOE Midcase projection) if the licensing process is not delayed (D183).
2-2
-------
lr~T
^^m
(INTERIM SPENT
FUEL STORAGE
<
SPENT
r "' — S rutL
FUEL 1 ^VP-Jv^ 1000MWe pWlv^
1 LIGHT WATER POWER REACTORS
U02 FUEL REPROa
FABRICATION
RECOVERED URANIUM
t
ENRICHED UF6
Pu
. MIXED OXIDE
^PY-T— -3. ^ FUEL FABRICATION
ENRICHMENT f
NATURAL UF6 j
fl
f^^p-p-x^-,
CONVERSION
TOUF
U3°8 t
..^ JT1 URANIUM MINES
ORE
*-
•MP
8JL
:SSING
o?
/FISSILE\
MATERIAL ) *
\ RECOVFRY / NO
^
YES
SPENT FUEL
DISPOSAL
HIGH LEVEL AND
TRANS URANJC WASTES
/
J
/
I
1 J
r
\
FEDERAL WASTE REPOSITORY
Figure 2.1. Light Water Reactor Fuel Cycle
Source: Battelle Pacific Northwest Laboratory, Fuel Cycle Cost Projections,
prepared for U.S. Nuclear Regulatory Commission, NUREG/CR-1041,
December 1979.
2-3
-------
Table 2.1. Uranium Production(a)
Year
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
Thousand MT 0303
16.0
15.7
15.4
12.9
10.7
9.5
9.6
10.2
11.2
10.5
11.7
11.1
11.7
12.0
10.5
10.5
11.6
13.6
16.8
17.0
19.8
17.5
12.2
(a'Includes l^Og production obtained by mine
water, heap leaching, solution mining, or as a
byproduct of another activity. Production
estimates from 1960 trough 1965 are Atomic
Energy Commission concentrate purchases.
Source: U.S. Department of Energy,
Statistical Data of the Uranium Industry,
January 1, 1983 (converted to metric tons).
2-4
-------
Table 2.2. Historical Annual Nuclear Plant Ordering
and Cancellations(a)
Total Orders Placed
Year
Ordered
Thru 1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
Totals
Number
of Units
20
20
31
15
7
14
21
38
38
34
4
3
4
2
0
0
0
0
251
Net
MWe
8,960
16,526
26,462
14,018
7,203
14,264
20,957
41,313
43,319
40,015
4,148
3,804
5,040
2,240
0
0
0
0
248,269
Orders Cancelled by
Year of Cancellation
Number
of Units
0
0
0
0
0
0
0
6
0
9
10
5
10
11
13
14
6
18
102
Net
MWe
0
0
0
0
0
0
0
5,002
0
9,516
11,729
5,090
10,814
11,287
15,252
15,501
5,781
21,937
111,909
(a)Does not incude 8 units totaling 301.3 MWe permanently shut down.
Source: U.S. Department of Energy, Statistical Data of the Uranium
Industry, January 1, 1983.
2-5
-------
Current issues concerning the safety of nuclear energy production,
underscored by the accident at Three Mile Island, the lengthy period
necessary to construct and license a reactor, the nuclear waste problem,
plus slower growth in the demand for electricity generated from all types
of fuels, create considerable uncertainty in projections of the demand for
uranium. For several years, projections of future nuclear power-related
activities have been significantly reduced.
In Appendix B we develop a set of projections for the appropriate
uranium industry activities for use in this RIA. These include demand,
inventory adjustments, imports, and domestic production (conventional and
tionconventional). This set of projections to the year 2000 is based on a
DOE Energy Information Administration forecast which approximates the
uranium requirements for the mid-range case (see DOE83a for explanation of
DOE mid-range case). Table 2.3 summarizes the DOE uranium demand
projection.
2.1.2 Elasticity of Demand for Uranium
There are no substitutes for uranium in the production of nuclear
energy. Therefore, the demand for uranium is derived directly from the
demand for nuclear-powered electricity. The demand for nuclear-powered
electricity depends on the demand for electricity in general and the
relative costs of alternative sources of electricity.
Utilities consider the costs of producing power and the reliability
of the power source when deciding what type of power plant to build. The
capital costs of a nuclear reactor are large, about $2 billion (plant
construction cost in constant dollars) for a typical 1,200 MWe plant.
Fuel costs constitute a smaller proportion of the cost of nuclear-powered
electricity, averaging around 15-20 percent (DOE82c). Once a utility has
decided to build a nuclear power plant and has invested funds in
construction, increases in fuel costs would not deter completion and
operation of the plant. Therefore, the demand for uranium is insensitive
to its price, especially in the short run. In other words, the demand for
uranium is perfectly inelastic in the short run. In the long run, there
may be some elasticity in the demand for uranium as the decision to build
reactors may be influenced by the utilities' expectations about the cost
of uranium.
2.1.3 Procurement and Pricing
Uranium is marketed and prices are quoted in the concentrate form,
which is uranium oxide (^Og), commonly referred to as yellowcake.
There are three categories of uranium procurement: contract price, market
price, and other. Contract price procurement involves agreeing on a price
at the time the contract is signed, although physical delivery takes place
in the future. Market price procurement bases the price of the contract
on market prices at the time of delivery. Market price procurement may
frequently include terms that establish a price floor, a cost floor, a
ceiling price, or some combination of these. The "other" procurement type
2-6
-------
Table 2.3. Summary of Projection of Uranium Industry Demand
Industry Demand
Year (Thousands of MT
1983 12.7
1985 17.1
1990 18.1
1995 20.4
2000 26.9
Source: U.S. Department of Energy,
Energy Information Administration
(Gene Clark, July 11, 1983).
2-7
-------
refers to arrangements that fall outside the contract or market price
categories, such as captive production. Captive production relates to
buyers with direct control of uranium properties and accounts for about
one-half of the "other" arrangements for deliveries from 1982 through
1991, according to DOE (DOE83b). Table 2.4 presents the distribution, by
year of delivery, of the types of domestic uranium procurement arranged as
of January 1, 1983, for the 1982-1991 period. This table shows that about
90 percent of anticipated uranium deliveries from 1982 to 1991 will be
purchased under either contract or market price contracts.
Before 1975, contract price procurement was used almost exclusively,
while in the 1976-1982 period, procurement shifted significantly to market
price contracts and other procurement. New procurement in 1982 was
73 percent market, 17 percent contract, and 10 percent "other."
Table 2.5 shows the average contract prices for 1982-1991 deliveries
for which U.S. buyers and producers reported price data in DOE's
January 1983 survey of uranium marketing activity. These prices are
stated in year-of-delivery dollars and, therefore, reflect estimates of
escalation in the contracts. Market price settlements for 1982 and 1983
are included with the contract prices since, as settled prices, they are
similar to contract prices. The average uranium price increases from
$38.37 per pound in 1982 to $58.91 per pound in 1991.
Table 2.6 presents the average floor price of market price contracts
for the period 1982-1991, as reported in the DOE survey. The average
floor price, stated in year-of-delivery dollars, increases from $51.27 per
pound in 1982 to $76.85 per pound in 1991.
Although most yellowcake is sold through long-term contracts rather
than on the spot market, the spot market is important as an indicator of
prices and the general financial health of the industry. The major
participants in the spot market are the producers and the utilities. From
1972 to 1979 the price of uranium rose 700 percent from roughly $6 per
pound to over $40 per pound. Starting in 1979, the spot price of uranium
(Nuexco Exchange Value) has experienced considerable weakness, declining
from a high of $43 to a low of $17 per pound in September 1982. The price
has rebounded slightly to $24 per pound as of July 1983. At these low
prices, few domestic operations are profitable, even before additional
pollution controls, due to general inflation and the increase in
production costs due to a declining ore grade. Table 2.7 shows the
average annual spot price of uranium.
During the sixties and seventies, many uranium mines and mills
operated with ore that contained approximately 0.2 percent uranium.
Because the richer deposits have been exhausted, the ore grade in new
mines has fallen to 0.10 to 0.15 percent uranium. The effect of the lower
ore grade is to increase costs because each ton of ore that is mined
yields less salable product.
2-8
-------
Table 2.4. Types of Domestic Uranium Procurement Arrangements
as of January 1, 1983
Year of Percentage of Deliveries by Procurement Tyj>e
Delivery Contract Price
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1982-1991
42
29
23
25
24
22
22
21
18
20
25
Market Price
53
66
68
65
61
62
68
68
67
60
64
Total Deliveries
Other (Thousand MT t^Og)
5
5
9
10
15
16
10
11
15
20
11
10.5
9.4
8.6
9.3
9.9
8.8
8.1
7.4
7.7
7.6
87.3
Source: U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity
(Pre-Publication Release), July 21, 1983.
2-9
-------
Table 2.5. Average U.S. Contract Prices & Market Price Settlements
as of January 1, 1983
Quantity of
Reported Uranium with
Price Per Pound ^Og Percent of Commitments Reported Prices
Year (Year of Delivery Dollars) with Reported Prices (Thousand MT
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
38. 37(a)
35.62(a)
44.84
50.00
48.98
52.20
46.65
49.59
57.16
58.91
87
90
89
81
77
71
57
65
59
64
7.6
3.4
1.5
1.6
1.4
1.0
0.8
0.8
0.6
0.7
'a'Includes settlements of market price contracts. The 1982 and 1983
data do not include uranium delivered or to be delivered under
litigation settlements.
Source: U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity
(Pre-Publication Release), July 21, 1983.
2-10
-------
Table 2.6. Average Floor Prices of U.S. Market Price Contracts
as of January 1, 1983
(Year-of-Delivery Dollars)
Year
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
Reported
Price Per
Pound 1/303
51.27
53.49
55.93
61.05
62.84
65.50
70.74
75.05
72.39
76.85
Percent of
Commitments with
Reported Floor Prices
74
93
94
92
91
90
100
100
100
100
Quantity of
Uranium with
Reported Prices
(Thousand MT U30g)
2.4
2.5
2.6
2.4
2.4
2.1
2.0
1.8
2.2
2.2
Source: U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity
(Pre-Publication Release), July 21, 1983.
2-11
-------
Table 2.7. Average Annual Spot Price for Uranium
(current dollars)
Year
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
(a)j|UEXC
Source :
Spot Price(a)
($ per Ib. U308)
6.24
6.48
5.95
6.41
11.45
23.68
39.70
42.20
43.23
42.57
32.93
25.00
20.16
10 average annual price.
American Metal Market,
Metal Statistics,
for selected years.
2-12
-------
2.2 Supply
Major sources of supply of uranium for domestic consumption are
domestic mining and milling operations, domestic inventories, and imports
of foreign uranium. Besides conventional uranium mills, domestic
yellowcake is produced from solution mining, mine water, heap leaching, or
as a byproduct of another activity (such as phosphoric acid production).
Historically, about 90 percent or more of yellowcake has been produced by
conventional mills. However, the conventional mill share has decreased
considerably in the last few years. In 1980, the conventional share was
85 percent (DOESla), in 1981 it was 81 percent (lX)E82a), and in 1982 it
was 75 percent (DOE83d).
The sharp increases in the price of uranium that occurred in the
mid-1970's stimulated new mining activity. Milling capacity also
increased in the last decade, nearly doubling from about 24,000 MT ore/day
in 1975 to a level of about 46,000 MT ore/day in January 1981. Table 2.8
shows the capacity of conventional mills and the capacity utilization rate
for the years 1975 through 1982. The increased mining and milling
activity coupled with reduced demand projections for nuclear power created
a surplus of uranium in 1980 forcing several mills to go on standby.
During 1981 and 1982, ten mills, accounting for capacity of about
19,000 MT ore/day, ceased operations, while the average capacity
utilization rate for the industry as of September 1982 was only
69 percent. Some mills are operating at as little as 20 percent capacity
(deV82).
Based on projections of the demand for electricity and the expected
expansion of nuclear power, utilities began making commitments to purchase
large amounts of uranium in the mid-1970's. By 1980, utility inventories
were at record high levels, the demand for electricity in general was
lower than the expected level, and concern was widespread over the
accident that shut down the Three Mile Island No. 2 reactor. During the
time leading up to and following these events, a number of nuclear reactor
orders were cancelled. An indication of the high level of inventories is
that utilities sold a portion of their uranium inventories on the spot
market in early 1980 when uranium prices were higher (CRB80). Table 2.9
shows inventory levels on January 1 for 1981, 1982, and 1983. Total
inventories held by all buyers increased by 6 percent from January 1982 to
January 1983, compared to a 15 percent increase from January 1981 to
January 1982. Most of last year's increase is due to increases in
inventories of natural uranium and UF^ as inventories of enriched UFg
and fabricated fuel decreased over the past year. Inventory to meet one
year of the utilities' needs is considered to be adequate (Co79). As of
January 1983, utilities were holding 62,100 metric tons of uranium. This
figure is about four times greater than the estimated 1982 consumption by
utilities of 15,000 metric tons (as measured by deliveries to DOt
enrichment plants - see Table 2.12), and about five times greater than
1982 total domestic uranium production of 12,200 metric tons.
2-13
-------
Table 2.8. Conventional Uranium Mill Nominal Capacity
and Utilization Rates
Year
Nominal Capacity, as of
January 1 of each year
(Metric Tons Ore/Day)
Capacity
Utilization Rate
(Percent)
1975
1976
1977
1978
1979
1980
1981
1982 (Jan.)
1982 (Sep.)
1983
24,180
25,810
28,270
35,520
39,740
44,500
46,300
45,200
31,100
30,600
83
87
75
91
90
NA
NA
NA
69
NA
NA = Not available.
Sources: Nominal capacity as of January 1 for each year is
from U.S. Department of Energy, Statistical Data of
the Uranium Industry, selected years.
Capacity utilization rates for 1975-1979 is from
U.S. Nuclear Regulatory Commission, Final Generic
Environmental Impact Statement on Uranium Milling,
NUREG-0706, September 1980.
Capacity and utilization rate for September 1982 is
from Paul C. deVergie, et al., "Production Capability
of the U.S. Uranium Industry," presented at Nuclear
Assurance Corporation Uranium Colloquium V,
Grand Junction, Colorado, October 6-7, 1982.
2-14
-------
Table 2.9. Uranium Inventories Held by Buyers
(Metric Tons l^Og Equivalent)
Utilities As Of
All Buyers As Of
1/1/811/1/821/1/83 1/1/811/1/821/1/83
Natural Uranium(a) 36,000 41,400 47,800 29,600 34,900 40,600
(Foreign-Origin) (4,500) (4,400) (7,600) (3,100) (3,600) (5,700)
Enriched Uranium(b) 16,600 19,400 17,500 15,100 18,000 17,200
(Foreign-Origin) (600) (700) (1,500) (500) (700) (1,500)
Natural UFc under
Usage Agreements
(Foreign-Origin)
4,900 5,100 4,400
(50) (200) (200)
4,600 5,100 4,400
(50) (200) (200)
Total Uranium 57,500 65,600 69,700 49,300 58,000 62,100
(Foreign-Origin) (5,200) (5,600) (9,300) (3,700) (4,500) (7,400)
(a)lncludes natural UF^, but does not include natural UF^ inventories
at DOE enrichment plants for 1981 and 1982.
(b)includes fabricated fuel.
Source: U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity
(Pre-Publication Release), July 21, 1983 (converted to
metric tons).
Note: Numbers may not add to totals due to independent rounding.
2-15
-------
An additional source of supply of uranium for the United States comes
from imports. Imports of foreign uranium constitute approximately
18 percent of total U.S. consumption, and this percentage is expected to
grow. Section 2.2.2 discusses imports and exports of uranium in detail.
2.2.1 Uranium Mill Location, Ownership, and Operating Status
The focus of this RIA is the conventional uranium milling segment of
the industry. As of January 1983, there were 27 licensed conventional
uranium mills of which only 14 were operating, while ten were on standby.
The conventional mills are located in the western States of Colorado,
New Mexico, Washington, Wyoming, Utah, South Dakota, and Texas. In
addition to the 24 mills that were either operating or on standby, there
were two other licensed mills (Edgemont, South Dakota, and Ray Point,
Texas) which had tailings piles but had not operated for many years. One
other licensed mill (Bokum Resources at Marquez, New Mexico) had been
constructed but never operated and had no plans to operate in the future
due to financial and legal complications. The quantity of tailings
existing at the 26 sites with tailings piles as of the beginning of 1983
was about 175 million metric tons. Table 2.10 gives the location,
ownership, capacity, tons and acreage of mill tailings, and operating
status for each of the 27 conventional mills. The estimates of tons and
acreage of tailings accumulated at each mill site were obtained from
several sources. These included the U.S. Nuclear Regulatory Commission,
the New Mexico Department of health and Environment, the Colorado
Department of Health, the Texas Department of Health, the Washington
Department of Social and Health Services, the South Dakota Department of
Water and Natural Resources, and the U.S. Department of Energy Commingled
Uranium Tailings Study (DOE82b).
Horizontal integration occurs when a company produces more than one
type of product, or when a company purchases or merges with a competitor.
In the late 1940's there were many purchases and mergers of small uranium
mining firms which resulted in the formation of the United Nuclear
Corporation. A subsequent joint venture between United Nuclear and
Homestake Mining Company established a substantial operation, measured by
both reserves and milling capacity (Ta79). A more recent example is Union
Carbide buying a majority interest in the Energy Fuels Nuclear Blanding
mill (NU83).
There are currently 23 companies that own conventional uranium
milling operations. Major oil and mining companies are prominent in the
industry. Kerr-McGee, Atlantic Richfield (Anaconda), Exxon, Getty Oil
(Petrotomics), Phelps Dodge (Western Nuclear), and Newmont (Dawn) mill
uranium. Other large producers include Union Carbide, UNC Resources
(formerly United Nuclear), and Pathfinder Mines (an independent subsidiary
of General Electric). Many of the companies that are prominent in the
uranium industry are also prominent in mining other metals.
2-16
-------
CO
oo
C3N
i — i
«,
rH
X
p
CO
3
C
CO
>-}
MH
O
CO
CO
CO
01
CO
4J
CO
TJ
01
4->
•r-t
!=>
cu
4:
4-1
C
•H
CO
01
4J
CO
rH
•H
S3
rH
CO
P
o
•H
4-t
C
01
>
p
o
CJ
TJ
01
CO
13
O>
CJ
•H
rJ
<4H
O
CO
3
4-1
CO
4J
CO
1
o
rH
.
CN
01
rH
43
CO
H
00
13
•H CO
4-J 3
CO 4J
P CO
CU 4-1
P.CO
O
01
rH
•H
*4-j PL, s~**
o co
CO CU
cu oo P
N C CJ
•H .H <
CO rH ^_,
•H
CO
H
s~^
CO CO
00 P
•4-1 (3 0
O *iH *iH
rH rH
EH -H rH
33 CO 1H
EH S3
TJ X
CU 4-1 ^v
CO iH >^
C CJ CO
CU CO Q
CJ P,--.
•H co eu
•j r-\ t,
r-l *~* W
o
• rH
X rH PH
33* 33 C
T)
CU
P rH 4-1
CO rH 1-1
0) IH CO
CO
^|
(U
o
o
TJ
C
CO
01
E
CO
55
p
O
•H
4-J
CO
0
o
, 1
01
4J
CO
4J
CO
r^t
CU 43
> TJ
•H e
4J CO
CJ 4-1
< CO
m m
vO OO
rH
r-s. o
rH ON
0 0
0 0
rH CM
rH rH
^-^
CO
x^x
00 O
in in
ON CJN
.
a
o
CJ
cu
• TJ
P.-H
O P
O C8
O
^|
cu p
4J o
o p
o s
^
4J
•H
CJ
c
13 CO
O >
C CO
CO P
O O
o
•a
CO
0
rH
o
o
r*1 r^ X
43 43 43 OJ 01 TJ
TJ T) TJ > > 01
13 C 13 -H iH CO
CO CO CO 4-J 4J O
4-1 4-J 4-1 CJ CJ rH
CO CO CO •< < CJ
O O O 00 O 1
•O- O O CN rH
rH CN CO CO CN
ON CN 1 — VO CN 1
I-H co O r^ ON
CM CN rH
000000
O O O O O O
in r-* -tf co I-H o
rH CN in VTJ CO CM
^TJ r** co co oo 1
f^ r*- m in m
,
a
g-i
o
CJ . p.
P. OP
P P CJ O
O CO CJ
CJ CU 00
rH C CO
P CJ -H OJ
0) CO 3 13 CJ
> CU 55 -H P
^ T~^ 33 3
0) cj cu o
CO 3 CU CU CO
CU 55 CO O A! CU
Pi TJ O CO Pi
1 TJ C S3 4J
O 01 O 1 co E
•H 4-1 O P 0) 3
43 iH CO p E J, CJ 5 O C 3
o P oi P co cr
43 3 3 43 rH p
CU 43 i-H E IH CO
co U PQ < 53 S3
o
o
•H
1
u
01
55
•c
01
CO
o
rH
CJ
CO
CM
rH
rH
CM
0
O
in
vO
m
1-1
p>^
4-1
•H
^,
O
_r~!
4J
3
[X,
01
rH
rH
CO
^
CU
cu
CO
CO
01
c
c
cu
EH
4-1
13
O
E
cu
00
TJ
W
CO
4-J
O
^j
CO
O
43
4-1
3
O
CO
^
CU 43 TJ
> TJ 01
vl C CO
4-J CO O
O 4-1 rH
< CO CJ
O O 1-^
vO -3- -3
rH CM
CO O -3
CO OO O
000
O O O
CO rH OO
CN CO
C3N CN O
££ £
^
• c
CJ P
(3 CU
M 4J
CO
p 0)
CO 3
cu I
rH CO
CJ C
3 C
Z co
P 01
OJ 3
0) cr
C CO
0 3
•H CO
TJ *£
C CO
CO C3
c
O 0 -
P CJ 13
> O O
CU C X
43 O X
CJ CJ [3
CO
"iH X
p 4-1 4-1
in -H 13
S3 O -H
0
CO CO PH
C rH
C rH X
CO CO CO
PM PK Pi
CO
CO
X
01
EH
^
cu cu cu 43
> > > TJ
•H -H iH C
4-1 4J 4J CO
CJ CJ CJ 4-J
< > rH CO
00< CO 01
P CO 4J
01 O rH CO
C -H 4-1 rH
w os < a.
OI
rH
00 rH
C3 *H
•H rH >
TJ CO CO
13 CO 43 JJ 53 33
43
CO
4J
a
p*-> r^i
43 43
C C
CO CO
4-J 4-J
CO CO
CO ON
CO OO
rH
CJN CO
CN CN
0 0
O O
-3- 00
i — 1
r^. oo
in r-^
• P
O CO
CJ CU
rH
00 CJ
e 3
•H 55
C
•H 13
01
C 4J
5 CO
CO OJ
Q 3
4J
•H
C
•H
P,
TJ rH
P i-H
O CU
C
O
4J
•H
43
CO
CO
3
^
pO CU OJ
*o t^ I>
C "-t -H
03 J-l -M
4-J U 0
C/3 < <
(^ 00 O
.-H O- CM
.— « CNJ i— 1
••3" ^D LO
m oo -3
O O O
O O O
CJ\ CO OO
CN rH
CJN oo r^.
in in r-*
CJN C3N CT^
^
01
o
p-l
o
CO P
P O
cu 33
p • •«-
4-1 P. X
P p 00
CO O P
PH CJ CU
p co H
CO CU
CJ P R
•H iH -H
P S3 CO
CU 4J
E P P
01
CO CO -H p
rH rH Oi O
rH rH
•H -H p p
33 X CU CO
TJ CU
CO CO 3 PQ
CO CO O ^
O O a,
S5
•H
£
o
I**!
££
^
(U ^ OJ QJ CJ (U
> T3 > > > >
•H C -H -H *H -H
4-1 OJ 4J 4J 4~> 4J
O 4J U O O CJ
<3 co < <3 < TJ "^ CO CO 4-1
•H P CJ CO PQ pq p
Pi CO rH CU
rH >,i-H >, >> CO
P 43 CU -H CU 01 OJ
OJ 00 P 33 rH rH Q
TJ *H UH p p
s a: «H to -H -H T)
O ^ CU CO 43 43 01
p-i '-l O CO CO OS
i
CO
-3-
rH
P
•H
4J
CJ
•O
O
p.
p
CO
4J
4-1
CO
43
P
CO
01
43
4J
^
O
I4H
Jx»
4J
•H
r-H
•H
CJ
CO
U-l
E
3
'H
TJ
CO
P
CO
01
43
4-J
4-1
CO
T>
01
CO
CO
01
CJ
O
D.
CU
O
, — s
CO
>^
CO
"O
cu
o
g
o
o
CN
•.
ON
rH
MH
O
>^
4-J
•H
CJ
CO
a
co
i-H
CO
P
O
4J
•H
TJ
TJ
•
CO
OO
0*1
1 — 1
^
rH
>^
^,
CO
3
p
CO
O
CO
CO
CO
3
4-1
CO
4J
CO
00
p •
•H CU
4J 4-1
CO CO
P TJ
CU
P, CO
O -r-l
4=
CU 4-J
^
•H UH
4-1 O
O
CO CO
CO
p
43
CO TJ
rH P
rH CO
•H 4J
E CO
-------
Concentration ratios for the uranium milling industry are shown in
Table 2.11 for selected years from 1971 to 1982. The peak concentration,
as measured by the eight-firm ratio, occurred in 1975 as this ratio
reached 88 percent. As of January 1982, the eight leading milling
companies accounted for 67 percent of the industry capacity.
Vertical integration can occur in the uranium industry if a company
engaged in other activities required for the generation of nuclear power
merges with a uranium mining firm. For example, General Electric (GE),
the second largest vendor of nuclear reactors, acquired uranium holdings
when it merged with Utah International in 1975. The Department of Justice
required GE to spin off its uranium holdings into an independent
subsidiary, the Lucky MeCorporation, which changed its name to Pathfinder
Mines Corporation in 1978. GE recently sold 80 percent of its interest in
the Pathfinder uranium mills to the French company, Cogema (Wh83). In
addition to vertical integration between nuclear reactor manufacturers and
uranium mining firms, there is also considerable vertical integration
between utilities and mining firms. For example, utilities such as
Commonwealth Edison, Consumers Power Company, Niagara Mohawk, and Southern
California Edison own or exercise substantial control over uranium mining
firms. As noted in Appendix A, approximately 70 percent of uranium is
milled as part of an integrated mining and milling operation. At the
mills, approximately 10 to 15 percent of production is "captive"
production of the owners of later stages of production.
2.2.2 Imports and Exports
A significant factor that determines import levels, and thus affects
the supply of uranium for domestic uses, is United States Government
policy. The Department of Energy is the only domestic processor allowed
to enrich yellowcake (^Og) with the isotope Uranium 235 for nuclear
applications. Imports of uranium to be enriched for U.S. usage were
banned from 1964 to 1976. Foreign uranium was allowed to be enriched in
the U.S. and returned to the country of origin during this period. This
ban, which was effectively a subsidy to the domestic uranium industry, was
partially lifted in 1977 when 10 percent of each U.S. utility's enriched
uranium was allowed to be of foreign origin. An additional 10 percent
allowance is added each year until 1984, when the current restriction on
enrichment of imported uranium is due to expire. However, due to the
depressed condition of the uranium industry, Congress is considering
reducing, or continuing to limit, imports of uranium for commercial uses.
Therefore, this potential Congressional action introduces an additional
element of uncertainty into the uranium market.
The actual use of foreign uranium in the U.S. can be measured by the
amount enriched at the DOE processing plants. Table 2.12 shows the
receipts of uranium at DOE plants classified by origin. In 1982, imports
nearly tripled from the previous year's amount. Commitments for future
2-18
-------
Table 2.11. Concentration in the Uranium Industry by Milling Capacity
(Percent)
1971 1975 1977 1980 1982
2 Firms
4 Firms
8 Firms
35
54
78
39
62
88
34
54
83
27
45
71
26
42
67
Sources: For the years 1971, 1975, and 1977,
June Taylor and Michael Yokell,
Yellowcake, The .International Uranium Cartel,
1979. The years 1980 and 1982 were estimated
from data in U.S. Department of Energy,
Statistical Data of the Uranium Industry,
GJO-100C80), 1981, and GJO-100(82), 1982.
2-19
-------
Table 2.12. Deliveries of Uranium to DOE Enrichment Plants
by Domestic Customers
Year
1977
1978
1979
1980
1981
1982
Source:
Origin (Metric Tons of
U.S. Foreign
12,900 600
10,800 700
14,000 1,400
10,100 1,100
9,100 1,000
12,300 2,700
U3°8) Percent
Total Actual
13,500 4.7
11,500 5.9
15,400 9.4
11,200 9.7
10,100 10.3
15,000 18.1
Foreign
Allowable
10
15
20
30
40
60
U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity
(Pre-Publication Release), July 21, 1983 (converted to
metric tons).
2-20
-------
uranium deliveries by foreign sources also increased substantially in
1982. However, the data show that U.S. utilities as a whole are
purchasing substantially less foreign uranium for enrichment than the
percentage allowed by U.S. policy. In 1981, when the allowable foreign
origin limit of an individual utility's deliveries to enrichment was
40 percent, only 10.3 percent of all utilities' deliveries were of foreign
origin. In 1982, when the allowable limit was 60 percent, 18.1 percent of
all utilities' deliveries were of foreign origin.
The United States also exports uranium to other countries.
Table 2.13 gives historical data on U.S. imports and exports. Until 1975,
the U.S. was a net exporter of uranium, with exports averaging 6 percent
of domestic production. From 1975 through 1977, U.S. imports were greater
than exports. Net imports represented 5 percent of domestic production
during this period. In 1978, the U.S. became a net exporter of uranium
again and remained so through 1980. Net exports averaged about 6 percent
of production from 1978 through 198U. In 1981 and 1982, the United States
once again became a net importer of uranium. Net imports in 1982 were
about half the amount of domestic production. Currently, France and
Taiwan are among the countries purchasing U.S. uranium. However, both
Canada and Australia contain substantial reserves of low cost deposits of
uranium, and South Africa is increasing its production capacity. In
South Africa, uranium is produced at low cost because it is a byproduct of
gold mining. United States production costs are higher due to lower ore
grades, strict mine safety requirements, and smaller sized mines (DOESlb).
Predicting the degree of reliance on imported uranium for future
domestic use is very uncertain. Putting the potential import restrictions
aside, the use of foreign uranium, though economic, appears to be limited
for other reasons. With a significant reliance on imports, U.S.
utilities, and the nation as a whole, may be vulnerable to a Mid-East
oil-type embargo which could result in substantial price increases and
curtailments of supplies. Since nuclear reactors are designed for thirty
to forty years of operation, utilities need a uranium supply for a long
time frame. There is evidence that U.S. utilities would be willing to pay
a premium for U.S. supplied uranium in order to get a reliable supply of
fuel over a long time period (Re81, Wh83), Utility spokesmen, both in
favor and against import restrictions, have often stated that it is
essential to have a stable domestic uranium production industry capable of
meeting electric utilities' needs when called upon (Hu82, Ma82). The
"Buy American" philosophy seems to be a real phenomenon in the uranium
business. It is felt that U.S. mills will set prices due to U.S. buyer
preference for domestic uranium (Ha82). On the other hand, though,
pressure from Public Utility Commissions to minimize costs will force
utilities to purchase uranium that is the most economic. Consequently, we
cannot accurately forecast the role of imports in supplying future uranium
requirements.
2-21
-------
Table 2.13. U.S. Imports and Exports of Uranium
for Commercial Uses
Year
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
Source:
Imports
Exports
(Metric Tons) (Metric Tons)
0
0
0
0
0
0
0
0
0
600
1,600
2,500
2,400
1,400
1,600
3,000
7,800
363
635
726
454
1,905
181
91
544
1,360
500
500
1,800
3,000
2,800
2,600
2,000
2,000
U.S. Department of Energy, Energy Information
Administration, 1982 Survey of United States Uranium
Marketing Activity (Pre-Publication Release),
July 21, 1983 (converted to metric tons).
2-22
-------
2.2.3 Uranium Re se rve s
The United States has the largest known uranium deposits in the
world. Thus, the potential U.S. supply of uranium is more than adequate
to meet demand. Of the total "reasonably assured" world resources at
$30 per pound, the United States has 20 percent, Australia - 17 percent,
South Africa - 14.percent, and Canada - 13 percent (DOE83c). At $50 per
pound reasonably assured resources, this distribution is United States -
24 percent, South Africa - 14 percent, Australia - 13 percent, and
Canada - 10 percent. "Reasonably assured resources" refers to uranium
that occurs in known deposits that could be recovered with currently
proven technology and corresponds to DOE's "Reserves" category (DOE83c).
Table 2.14 shows historical estimates of uranium reserves in the United
States. The reserves are listed by "forward cost" categories, e.g.,
$15/lb. Forward costs include operating and capital costs, in current
dollars, that must be incurred to produce the uranium (DOE80). Not
included in forward costs are all previous exploration and development
expenses, and future income taxes, profits, and the cost of money. It is
common practice in the uranium industry to multiply, the forward costs by
1.7 to obtain full costs (SeBO).
2.2.4 Employment
Overall employment in the uranium industry is shown on Table 2.15,
for the years 1973 through 1982. The growth in employment in the industry
is indicative of the prosperity the industry was enjoying during this
period. From 1973 to 1979 total employment increased more than three-fold.
Detailed employment data for the conventional uranium mining and
milling segments of the industry are shown separately in Table 2.15a for
the year 1982. Total employment totaled 7,013 people for the two segments
in 1982, down 56 percent from a total of 15,991 in 1979. With additional
mills going on standby in 1983, employment has decreased even further.
2.3 Financial Condition
The uranium industry is currently in a period of contraction. The
spot price of uranium averaged only $25 per pound in 1981 and $20 per
pound in 1982, while production costs in the U.S. average about $30 per
pound (BW81, PD&3). Since many domestic operations are unprofitable when
uranium is selling at so low a price, many have closed or delayed mining
and milling projects. The outlook for a rise in prices in unclear.
Uranium prices will rise when more nuclear reactors are built and
licensed, and analysts are unsure when the nuclear power industry will
begin to expand.
Financial data for six companies in the uranium industry are shown in
Tables 2.16 and 2.17, covering the period 1976 through 1982. As a group,
these six companies provide a reasonable financial representation of the
2-23
-------
Table 2.14. Historical Estimates of Uranium Reserves
. _ Thousand MT U-0Q
As of 38
Jan. 1 $15/lb$30/lb$50/lb$100/lb
1970 288
1971 355
1972 472
1973 472
1974 472 575
1975 380 544
1976 390 581
1977 372 617 762
1978 336 626 807
1979 263 626 835
1980 204 585 849 1,018
1981 102 426 714 938
1982 0 186 539 811
1983 0 163 522 806
Note: Reserves reported at $30, $50, and $100/lb include reserves in
all lower cost categories. This table does not include byproduct
uranium.
Source: Statistical Data of the Uranium Industry, U.S. Department of
Energy, January 1, 1983 (converted to metric tons).
2-24
-------
^^^
^^
^J
09
-3
rJ
%
•H
0
2
rC!
it
4«J
d
•H
+J
d
fll
w
rH
rv
?••<
LzJ
i/"\
H
CM
fll
W
__l
r^
rrt
/o
fl
CM
CO
2
rH
00
o>
rH
0
oo
rH
(^
O*
rH
00
Is*
CT>
H
£
O^
rH
vO
fx.
o\
rH
in
pN.
H
^|-
ps.
O>
rH
CO
r-.
H
in
co r>. CM
•*•»•*
CO rH CO
rH
^D ^^ ViO
O CM si"
•*•*•*
-it" *sf CO
H
o> oo m
•* CO H
•sT CO VO
•V «V Wl
•* CO CO
rH
o co in
H * ^o i^
CM r~. CM
ON >o i^x
sr oo co
O CO CM
» A «
CM m CM
f^ OO CO
CTi CM VO
^0 ^^ ^D
*
H CO H
r^* ^o CM
in H CM
in m in
*
rH CO rH
d
o
•rH ^^
4J ^
cd ^ op
M 00 d
o d -H
H -H rH
ex, d H
W S 22
*
<
2
CT.
CO
CO
•\
co
rH
H
r?
n
rH
C^J
cs
o
^
•s
rH
CM
00
("X,
ob"
ro
CM
rH
CO"
rH
CM
r^.
^
(T>
CO
CM
^
iA
O^
O
*
rH
cd
4->
0
H
*
00
d
•H a
d P
a 'H
d a cu
O 3 >4H H
•H iH O td
4-> d
3 cd W CM "
H r) 4-> CO >,
O £3 M Oi M
CO O rH 4-1
<4H O. CO
T3 O 8 T) 3
d H d 73
cd v cd d
CJ T3 M
CO -H d "
• 4J m cd H a
a O 14H 00 3
3 3 O t»,Oi ^H
•H T3 f-l H d
d o •> 4J cd
Cd rl >, CO " >-l
M eu oo 3 o ;=>
3 >^ rl T3 CO
,.0 (U H O^ (J)
4H 5 H rH X!
O 8 W 4-1
Sa M
>« 3 O <4H
(U 4-1 O iH <4H O
o d
M a -P cd co cd
3 3 d r) > • Q f5 -H
CU i-l CO H 4-1
> cu • cu cd
d K* i""> fj 4-t
O O H • tfl
•
CO
d
0
•H
4-1
•H
*"O
cu
A
CO
00
: rH «
d cu en co •> rH
o f-i r~» « o> >>
d en 4-1 H oo t*.
d rH d M rl
TJ iH d 3
cd 00 4J XI «N W d
d u cd
H iH CO iH >>, m >-)
cd J^ r» w M o
(3 ^-i ^^ d cO *
O O rH W 3 4J rH
•H IS C d CO
4-1 CO Tj XI Ol O>
d co ri d
. > co CO M «
CO d >> PlOOSCdrH
rH o o ex,
XI CJ rH 0) O Q CO >,
cd 0, XI M 3 Q H
H x! a 4J 3 -H ed
•H 4J CU O d • 3
id o t-> co cd c/> d
> xi co ocuV4»cd
Cd CU fe f^j i^ }"^ l~5
CO T)
4-> H 3
O 0) rH ••
2 r» CJ 0)
o d o
II U H rl
s~*t s~\ £3
o
2 ^-^ ^-^ c/5
2-25
-------
^N
rrt
*-O
^-N
CM
00
rtN
O »
H
CO
•H
4-1
CO
1
2?
B
•H
3
2
""2
cO
00
f^
H
•H
d
•H
2
a
•»J
•rn
rrt
s
to
5
•»•»
d
•H
4J
01
P.
£**
O
»H
P<
c3
"
2
H
CM
01
T~^
n4
CO
H
4-1
•H
PH
d
8
0
rrj
3
o
M
00
M
OI
-o
d
H
CO
o
H
1 >,
M M
O) O
P. co
3 «fH
co ^
M
5
4-1
O
1 H
.d co
O 0
01 tH
H d
1
OI
4-> 01
d o
•H d
1
CO CO
S.I
O 4-1
<-S 4-1
U
• 0
> p.
r4 P
P.
r< p
01 3
co co
co
0)
d
•H
^r]
<—( ON in CM r^-ll r^ ^ O m vOll
CM CM in m in co co sj- si- m
o o m «* oil vo m -* CM ON!
- " * "H H
H CM H mil nil
1^ ON vO H coll CO ON vD sr CMll
O 00 in vO HI O ON in CO ON!
H CM rH vo|| H CM||
I-H oo CM in voll vo m -* H voll
so in r** cyi CM 1 1 ^o c^o co co ^^11
rH rH ^f 1 1 rH 1 1
•^ r>« -4- CO ^11 i— I vO co ON ON||
o cs co co oil oo vo m H HI
H CM H in|| CMll
^4 ^4 "^4 ^4 ^) CO O^ 00 COll
S5S5S525 ONSJ-CMVO CO
H H H m||
,4J O H OOI>»4-I O
d CJJ53O H H US5JSO H
*iH *rH
S 3E
d
o •
H CO
4-1 CO
3 ON
H H
O
CO •>
H
d >^
cd M
oo 3
4J pj
U cd
3 ^
O
M >,
P, &
,JQ CO
3
g *rj
O d
M H
<4H
3 -H
•H d
d co
CO M
(-1 3
3
m fi
O 4->
r? 0
0)
> CO
0 4J
O cO
01 a
r<
H
•H U
•H
00 4->
d co
•H -H
^ CO
0 4-1
S co
CO ~
01 >.
01 00
^> W
O (U
rH 0
cx r*i
a
0) <4H
O
*n
CO 4-1
rH d
0)
H a
a* a) in
H H CO
,a co &
CO 01
CJ T3 Q
•H 0)
H id •
O. 3 CO
P, H
•< U . !=)
d 50
4-1 -HO
O TJ "
2; 4-1 O 01
O -H O
" £ e 3
-------
Table 2.16.
Financial Information for Selected Companies
in the Uranium Industry
($ in Thousands)
Revenues
Operating
Profit
Assets
Depreciation
Depletion
Capital
Expend .
Year
1976
1977
1978
1979
1980
1981
1982
1976
1977
1976
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
Atlas
15,611
28,152
26,845
38,253
60,148
NA
NA
4,607
8,027
(1,925)
(2,159)
6,142
NA
NA
NA
NA
56,375
79,428
72,834
NA
NA
NA
NA
3,331
4,058
6,212
NA
NA
NA
NA
14,579
21,870
7,453
NA
NA
Conoco
NA
NA
16,488
16,384
34,586
NA
NA
NA
NA
(20,815)
(21,530)
(30,719)
NA
NA
NA
NA
52,491
61,218
62,867
NA
NA
NA
NA
2,876
3,209
3,957
NA
NA
NA
NA
7,213
6,937
7,999
NA
NA
Home stake
22
59
44
42
45
59
63
10
24
20
14
5
15
14
45
42
47
54
83
80
6
5
19
2
2
7
8
12
12
1
,441
,141
,928
,388
,363
,983
,702
,389
,622
,454
,097
(601 )a
,703
,592
,144
,023
,990
,790
,798
,135
,831
192
80
0
17
,980
,339
,953
,036
,628
,961
,533
,521
,036
,025
Kerr-McGee
96
123
115
163
238
201
153
32
22
20
>
>
>
»
>
»
>
>
»
>
800
300
200
400
900
500
100
700
300
100
(200)
30
26
20
215
236
272
288
304
304
312
7
9
13
15
21
16
16
»
>
>
»
>
>
>
»
>
t
i
»
»
>
>
»
»
000
300
000
300
500
000
400
800
500
400
500
300
800
600
300
600
300
NA
NA
34
28
17
14
7
>
>
>
>
>
277
bOO
900
200
300
Pioneer
NA
NA
13,810
20,267
7,829
7,224
419
NA
NA
1,257
(1,004)
(1,082)
(7,855)
(63,871)
NA
NA
51, 119
70,583
84,046
85,859
35,621
NA
NA
8,679
11,253
8,718
5,337
2,096
NA
NA
19,467
23,513
17,567
9,238
3,123
UNC
29
80
133
181
167
102
84
7
28
42
61
12
20
2
87
145
203
279
239
210
209
1
1
5
9
11
6
3
27
54
49
39
46
14
8
,339
,816
,193
,626
,811
,102
,038
,103
,539
,320
,339
,243
,537
,409
,222
,376
,041
,436
,888
,471
,791
,070
,952
,414
,677
,952
,993
,249
,856
,499
,518
,156
,662
,386
,606
NA = Not Available.
(^Includes an $8,075 loss on settlement of uranium litigation, would
otherwise have been (8,075) - 601 - +$7,474.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
2-27
-------
Table 2.17.
Financial Ratios for Selected Companies
in the Uranium Industry
(Percentage)
Operating
Profit/
Revenue
Operating
Profit/
Assets
Depreciation
Depletion/
Revenues
Capital Ex-
penditure/
Revenue
Year
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
197b
1979
1980
1981
1982
Atlas
29.5
28.5
-
-
10.2
NA
NA
NA
NA
-
—
8.4
NA
NA
NA
NA
12.4
10.6
10.3
NA
NA
NA
NA
54.3
57.2
12.4
NA
NA
Conoco
NA
NA
-
-
-
NA
NA
NA
NA
-
—
-
NA
NA
NA
NA
17.4
19.6
11.4
NA
NA
NA
NA
43.7
42.3
23.1
NA
NA
home stake
46.3
41.6
45.5
33.3
16.5U)
9.5
24.5
73.4
54.7
47.6
29.5
13.6OO
6.9
19.3
1.8
.3
-
.04
15.4
8.9
31.3
9.1
4.4
17.7
20.1
27.6
20.1
1.6
Kerr-McGee
33.8
18.1
17.4
-
12.6
13.1
13.1
15.2
9.4
7.4
—
9.8
8.6
6.4
7.7
7.5
12.0
9.5
8.9
8.2
10.6
NA
NA
29.8
17.6
7.5
7.0
4.8
Pioneer
NA
NA
9.1
-
—
-
—
NA
NA
2.5
—
—
-
—
NA
NA
62.8
55.5
111.0
73.9
500.2
NA
NA
141.0
116.0
224.0
127.9
745.3
UNC
24.2
35.3
31.8
33.8
7.3
20.1
2.9
8.1
19.6
20.8
22.0
5.1
9.8
1.1
3.6
2.4
4.1
5.3
7.1
6.8
3.9
95.0
67.4
37.2
21.6
27.8
14.1
10.2
NA = Not Available.
- = Loss Year.
5 percent without litigation.
6 percent without litigation.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
2-28
-------
uranium industry. Tables 2.16 and 2.17 show considerable variations in
the data both within companies and between companies. In general, the
tables indicate the declining financial health of the industry. Hie
financial information has been assembled from corporate annual reports and
Securities and Exchange Commission (SEC) 10-K. reports. Many companies in
the uranium industry have more than one business segment. The information
in the tables is from the business segment that includes uranium, although
other products may also be included, such as other metals. Therefore, the
data should be compared over several years and among several companies to
develop a profile of a typical uranium company.
Capital investment expenditures for the domestic uranium mining and
milling segments are shown in Table 2.18. Total capital expenditures rose
at an average annual rate of 29 percent from 1975 to 1980. Expenditures
for 1982 totaled $92 million, a decrease of 82 percent from the 1980 level
of $515 million. Planned expenditures for 1983 and 1984, estimated to be
only $36 and $32 million, respectively, reflect a continuation of the
decline in capital investment.
2-29
-------
o
•H
CJ
3
0
P4
0
^
•H
d
cd
n
CJ
•H
4-1
CO
co d
H^j
»ri
Oi
''d
0)
3 g
o> cd
H H
PH
s-/
CM
oo
0>
H
H
00
O
CO
cn
H
0\
f*X
CTi
i-l
CO
ON
H
f^
r>»
CT>
H
vO
cr>
r-l
in
CTi
H
vO
H
m
H
CO
CM
Qf>
C*J
^*
CO
vO
r*^
i/^
CM
H
CO
0^
CM
CM
CM
00
d
•H
4-1
S-i
o
O
(S
CO
CO
•a
cd
3
3 cS
•H
S
CTi
O
H
*~H
i_{
o>
m
CM
CM
CO
o
CM
*o
m
H
fN»
^O
H
in
in
CM
CM
CO /^
co co
P d
3 o
4-1 -H
•H H
Tj i~H
d -H
ft
W s— '
CM
CO
vO
CO
CM
cn
H
CM
in
H
m
in
00
P^,
CM
S
o
>4-(
TS
CO
4J
CJ
3
1
O
CO
^i
0)
^
^f
3
co
d
0
ft
3
""C3
0)
co
cd
FQ
• •
s
o
•S
^1
H
CO
3
T)
|_^
a
3
•H
d
cd
f-i
CO
(-J
1 1
IM
o
cd
4-1
a
H
cd
o
•H
4-1
CO
•H
4-1
cd
4-1
CO
„
^»
130
CO
iS
MH
o
4-1 CO
d oo
cd H
ft
Q M
. 3
co d
• cd
3 "-J
co
CJ
M
o
CO
2-30
-------
REFERENCES FOR CHAPTER 2
BW81 Business Week, "UNC Resources: Diversifying Away from Uranium
and Into Tools," McGraw-Hill, Inc., New York, August 24, 1981.
Co79 Combs, George F., The Uranium Market — 1978-1979, Office of
Uranium Resources and Enrichment, U.S. Department of Energy,
October 1979.
CRB80 Commodity Research Bureau, New York, Commodity Yearbook 1980.
deV82 deVergie, Paul C., et al., "Production Capability of the U.S.
Uranium Industry," presented at Nuclear Assurance Corporation
Uranium Colloquium V, Grand Junction, Colorado, October 6-7, 1982.
Di83 Diedrich, Roger, "Estimates of Future U.S. Nuclear Power Growth,"
U.S. Department of Energy, Energy Information Administration,
SR-NAFD-83-01, January 1983.
DOE80 U.S. Department of Energy, Statistical Data of the Uranium
Industry. GJO-100(80), 1980.
DOESla U.S. Department of Energy? Statistical Data of the Uranium
Industry, GJO-100C81), 1981.
DOESlb U.S. Department of Energy, Office of Uranium Resources and
Enrichment, "The Domestic Uranium Industry and Imports of
Uranium," February 23, 1981.
DOE82a U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(82), 1982.
DOE82b U.S. Department of Energy, Commingled Uranium Tailings Study,
Volume II, Technical Report. DOE/DP-0011, June 30, 1982.
DOE82c U.S. Department of Energy, Energy Information Administration,
Projected Costs of Electricity from Nuclear and Coal-Fired Power
Plants, DOE/EIA-0356/1. August 1982.
DOE83a U.S. Department of Energy, Energy Information Administration,
1982 Annual Energy Outlook. DOE/EIA-0383(82).
DOE83b U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activities
(Pre-Publication Release), July 21, 1983.
DOE83c U.S. Department of Energy, Energy Information Administration,
World Uranium Supply and Demand; Impact of Federal Policies,
DOE/EIA-0387, March 1983.
2-31
-------
DOES3d U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(83), 1983.
Ev83 Evered, J. Erich, "Outlook for U.S. Energy Demand and Supply -
The Role of Nuclear Power," presented at Atomic Industrial Forum
Fuel Cycle Conference, Kansas City, Missouri, March 21, 1983.
Ha82 Hahne, F.J., "Future Uranium Prices," presented at Nuclear
Assurance Corporation Uranium Colloquium V, Grand Junction,
Colorado, October 6-7, 1982.
Hu82 Hulse, Richard D., "Uranium Supply - The Roller Coaster Effect,"
presented at Nuclear Assurance Corporation Uranium Colloquium V,
Grand Junction, Colorado, October 6-7, 1982.
Ma82 Martin, Louis H., and Steven P. Kraft, "Uranium Import
Restrictions: A Utility Perspective," presented at Nuclear
Assurance Corporation Uranium Colloquium V, Grand Junction,
Colorado, October 6-7, 1982.
NU83 NUEXCO Monthly Report on the Uranium Market, March 1983.
PD83 Pay Dirt (Arizona Edition), "Union Carbide Negotiating for
Majority Interest in White Mesa," Copper Queen Publishing Co.,
Bisbee, Arizona, March 1983.
Re81 Reaves, M.J., "What Happened to the Uranium Boom?", presented at
Society of Mining Engineers 5th Annual Seminar, Albuquerque,
New Mexico, September 20-23, 1981.
Se80 Searl, Milton, "Energy Resources for Tomorrow," Mining Engineering,
published by Society of Mining Engineers of AIME, Littleton, CO,
January 1980.
Ta79 Taylor, June and Michael D. Yokell, Yellowcake, The International
Uranium Cartel, 1979.
Wh83 White, George Jr., "Uranium, Prices Slump under Inventory Selling
but Firm Up at Year End," Engineering and Mining Journal,
March 1983.
2-32
-------
3. Objectives of Standards and Control Methods
3.1 Goals of Radiation Protection for Tailings Disposal
Standards for the protection of public health, safety and the
environment must be written to address predetermined objectives or goals.
We have identified five goals which describe the purpose in developing
these standards. These goals are:
1. Discourage future uses of tailings, especially in or near
dwellings or workplaces. The past use of tailings as construction
materials has caused increases in the levels of radon decay products in
buildings. People in these buildings have a much greater risk of
radiation-induced lung cancer.
2. Protect the population from radon decay products emanating from
tailings piles. Radon exposures to people living in the vicinity of
tailings piles can be above background and thus lead to increased risk to
these individuals. Also, since radon is a noble gas with a radioactive
halt-life of 3.8 days, any radon released from tailings can travel long
distances before it decays to innocuous levels. As the radon decays, the
decay products expose large numbers of people to very low levels of
radiation. Since any level of radiation exposure presents some risk to
humans, reduction of this risk must be considered regardless of how small
the risk to any one individual.
3. Prevent the surface spread of tailings. Tailings are spread
about the local area by wind and precipitation. This causes radiation
exposure to the local residents from both radon decay products and
external gamma radiation. Tailings can be a significant source of
external gamma radiation at low concentrations in soil. For external
gamma radiation, NCRP #45 (NP75) recommends using a dose conversion factor
of 13.9 mrem per year per pCi of Ra-226 per gram of soil covering a large
area. In addition, the spread of tailings may contaminate surface water
resources. The health risk depends on the amount of dispersed tailings
and varies at the different sites. At some sites it is estimated this may
be a significant risk.
4. Protect groundwater sources. Contamination of groundwater occurs
when water comes in contact with tailings, leaches hazardous or toxic
materials from the tailings, and then moves into groundwater aquifers
through fissures, percolation, or other means. This water contains
nonradioactive contaminants as well as radioactive contaminants. Some
evidence indicates that when a pile is no longer used and dries out, most
of the contamination stops. The health risk depends on the contaminant
concentrations in the water and the uses of the water (human consumption,
livestock watering, irrigation, etc.).
3-1
-------
5. Provide control of the tailings for very long times. Because of
the long lifetimes of the radioactive contaminants (thorium-230, for
example, has a half-life of about 75,000 years) and the presence of other
toxic materials (which never decay), the potential for harming people will
persist indefinitely. Many interrelated factors affect the long-term
performance of tailings disposal methods. They include external
phenomena, such as erosion, earthquakes, floods, windstorms, and glaciers;
internal chemical and mechanical processes; and human activities.
Predictions of the stability of disposed tailings become less certain as
the time period increases. Beyond several thousand years, long-term
geological processes and climatic change will determine the effectiveness
of most "permanent" control methods.
To accomplish the above objectives, we have translated the first four
goals of the standards into categories of regulatory controls. Protection
for long periods of time, goal number five, applies to each of the other
objectives and is discussed in Section 3.3. These controls are listed in
four general classes:
1. discourage misuse;
II. radon control;
III. prevention of the spread of radioactive materials by wind and
surface water;
IV. prevention of groundwater contamination.
It should be understood that some of these classes are interrelated.
For instance, radon control can be achieved by placing a thick earth cover
over the tailings. This method also provides significant control for
groundwater protection and prevention of misuse. Despite the fact that
these classes of control are not mutually exclusive, this classification
appears to offer a reasonable approach for analyzing control methods and
developing regulatory options.
These four classes and the likely methods of providing such controls
are discussed in the following sections. More detailed discussions of
these control methods are presented in the FEIS.
3.2 Control Methods
3.2.1 Discourage Misuse
Materials contaminated with radium-226 and thorium-230 must be
isolated so that they are not readily available for use in the
construction of dwellings and other occupiable buildings. Tailings are a
high grade sand and can be ideal for use in construction or as fill, if
3-2
-------
the material were not a health hazard. There is real potential for harm
if, as happened in Grand Junction, Colorado, people identify a disposal
site as a resource area for sand. (The reader should refer to the FEIS
for more information on the Grand Junction experience.)
Various methods can be used for isolating the tailings ranging from a
simple earthen cover to a deep mine. Greater amounts of material, such as
earth, placed between the tailings and the environment increase the
isolation of the tailings. When considered in this way, greater, or
better, isolation means there is a smaller likelihood that man will
intrude into the disposed tailings.
The readily available method of tailings disposal is covering the
tailings with earth. Other methods are possible but are also more
costly. Therefore, this analysis limits the consideration of isolation
methods to those involving earthen covers. However, it is recognized that
some day other methods providing better isolation may become economically
competitive.
The amount or thickness of soil needed to provide isolation is not
amenable to direct scientific calculation. Perhaps the best approach is
to review the depths to which excavations for common activities are made.
Excavations are routinely made to six to eight feet for public utilities
(water and sewer pipes, power lines', telephone lines). Footings for house
foundations are often placed at an eight foot depth. In colder climates
it is important that water lines and foundations be placed below the frost
depth to avoid freezing problems. Graves are also dug to a depth of six
feet, or more.
3.2.2 Radon Control
Methods for the prevention of radon release into the atmosphere range
from simple barriers, such as earth or plastic sheeting, to higher
technology means, such as incorporation of the tailings in asphalt or
concrete or chemical processing to remove the radon precursors. Radon
control methods considered in this analysis are limited to earth covers.
Plastic and asphalt covers are not considered since they degrade rapidly
in most cases when exposed to the sun. The more advanced methods are not
considered since costs are high and not well established, and their
effectiveness for radon control is questionable.
Earth placed over tailings slows the movement of radon into the
atmosphere by various attenuation processes. When the earth is moist,
attenuation increases. Different soils have different attenuation
properties; these can be approximately quantified in terms of a quantity
called the "half-value layer" (HVL). The HVL is that thickness of cover
material (soil) that reduces radon emission to one-half its value.
3-3
-------
Figure 3.1 shows the percentage of radon that would be predicted to
penetrate various thicknesses of materials with different HVL's. These
values are nominal; the actual HVL may vary significantly. From
Figure 3.1 it can be seen that 3 meters of sandy soil (HVL =1.0 meters)
are projected to reduce the radon released from tailings by about
90 percent. Soils with better attenuation properties would require less
thickness to achieve the same reduction. For example, 1 meter of
compacted moist soil (HVL = 0.3 meters) would be predicted to reduce the
radon release by about 90 percent.
A more complete treatment of radon attenuation based on the work of
Rogers (Ro81) is given in Appendix P of the NRC Generic EIS for mill
tailings. That analysis concludes that the effectiveness of an earthen
cover as a barrier to radon depends most strongly on its moisture
content. Typical clay soils in the uranium milling regions of western
United States exhibit ambient moisture contents of 9 percent to
12 percent. For nonclay soils, ambient moisture contents range from
6 percent to 10 percent. Table 3.1 provides, as an example, the cover
thicknesses needed to reduce the radon emission to 20 pCi/m2s for the
above ranges of soil moisture. Four examples of tailings are shown that
cover the probable extreme values of radon emissions from bare tailings at
existing sites (100 to 1000 pCi/m2s). the most common values lie between
300 PCi/m2s and 500 pCi/m2s.
In practice, design techniques must take account of uncertainties in
the measured values of the specific materials used, the tailings to be
covered, and predicted long term values of equilibrium moisture content
for the specific location, in order to assure meeting any given radon
emission limit over the long-term. The uncertainty in predicting
reductions in radon flux increases rapidly as the required radon emission
limit approaches background. Even at 20 pCi/m^g the uncertainty may
approach a factor of three (Ro83).
3.2.3 Prevention of Spread of Tailings and Control of External Radiation
Methods for control of wind blown and precipitation-carried tailings
include earthen and plastic coverings, chemical and asphalt binders which
are sprayed on the tailings, grading and contouring to eliminate steep
slopes, revegetation, and others. Chemical and asphalt sprays do not last
long on tailings and are more suitable for use during the operating time
of a mill. For this analysis a combination of grading and contouring
slopes, covering with 0.5 meter of earth, landscaping, and continuing
maintenance is considered the minimum control for wind blown and
precipitation carried tailings.
Methods that provide protection from external gamma radiation require
that mass be placed over the source of the penetrating (gamma) radiation.
Thus, a plastic sheet has no effect on gamma levels whereas a layer of
earth is quite effective in reducing gamma levels.
3-4
-------
100
A = SANDY SOIL (HVL = 1.0 M)
B = SOIL {HVL = 0.5 M)
C = COMPACTED, MOIST SOIL
(HVL=0.3 M)
D = CLAY (HVL=0.12 M)
23456
COVER THICKNESS (METERS)
Figure 3.1. Radon Penetration ot Cover vs. Cover Thickness
3-5
-------
Table 3.1. Estimated Earthen Cover Thickness (in meters)
to Reduce Radon Emissions to 20 pCi/m2s
Radon Emission
from Tailings • Percent Moisture Content of Cover
(pCi/m s) _6_ _8_ _10 12
100 1.7 1.3 1.0 0.7
300 2.8 2.1 1.5 1.1
500 3.4 2.6 2.0 1.5
1000 4.1 3.2 2.4 1.8
3-6
-------
The amount or thickness of earth that will attenuate the gamma
radiation to one-half its initial value is also called a half-value-layer
(HVL). As with radon adsorption, the HVL for gamma attenuation depends on
soil composition, compaction, moisture content, and other factors. The
average HVL of compacted soil is about 0.1 meter. Therefore, a soil
thickness of 0.5 meter will reduce the gamma to about 3% of its initial
value from the uncovered tailings and 1 meter of soil would reduce it to
about 0.1% of its initial value.
A typical tailings pile may have a radium-226 concentration of 300 to
500 pCi/g. This produces a gamma absorbed dose rate in air as high as
7,000 mrad/year on top of the -uncovered tailings, assuming a homogeneous
distribution of the radium-226 in the tailings. An earth covering of
1 meter would reduce this absorbed dose rate in air to about 7 mrad/year.
This is slightly less than the total gamma dose from the uranium-238
series under average background conditions.
3.2.4 Groundwater Protection
Uranium mills produce large quantities of radioactive and toxic
materials in their tailings. These tailings have been stored in unlined
impoundments which in many cases were located on permeable soil. Water in
the tailings leaches toxic and radioactive materials from the tailings.
This leachate with dissolved toxic and radioactive materials can seep into
the underlying aquifers, thereby contaminating them. Several of the
dissolved materials have very small removal rates in soils and thus can
travel some distance in the aquifer.
Arsenic, selenium, lead, manganese, molybdenum, and vanadium are
present in varying amounts in the tailings, are highly mobile (small
removal rates in soils), and have been found in groundwater above Federal
and State limits at distances up to 1.5 miles from tailings piles at seven
sites. There are no Federal regulations limiting concentrations in
groundwater per se. In general, EPA's National Interim Primary Drinking
Water Regulations (NIPDWR) are used to assess the toxicity or health risk
of groundwater contamination. This is consistent with the goal
established under the SWDA, as amended, regulations: to preserve the
quality of groundwater for future uses. Arsenic, selenium, and lead are
all assigned limits in the NIPDWR1s. Manganese is assigned a limit in the
secondary drinking water regulations. Molybdenum may be toxic and has
been shown detrimental to cattle.
Corrective actions have already been taken at three tailings pond
sites because of groundwater contamination. New, plastic-lined ponds have
been constructed at the Cotter Mill, Cannon City, Colorado, and the Dawn
Mill, Ford, Washington, to alleviate groundwater contamination. A
groundwater cleansing system has been installed at the Homestake Mill,
Grants, New Mexico. This involves two rows of wells downgradient from the
tailings. Contaminated groundwater is pumped from the first row of wells
and recycled; fresh water is injected into the second row of wells. More
information on groundwater contamination at existing mills is contained in
the FEIS.
3-7
-------
Methods for preventing contamination of groundwater fall into four
groups: (1) placing a barrier between the tailings and the aquifer that
will either prevent the movement of water from the tailings to the aquifer
or will remove the hazardous materials in the water by adsorption;
(2) fixing the tailings into a solid mass that prevents the leaching of
the hazardous materials from the tailings by water; (3) covering and
contouring the pile to minimize precipitation infiltration into the
tailings and to encourage runoff of precipitation; and (4) selecting a
site with characteristics that minimize recharge of the aquifer and
provides natural adsorption process. Since these are not all available
for existing tailings piles, it is important to differentiate between
existing tailings piles and new piles either at existing sites or new
sites.
The protection afforded by an impermeable barrier such as plastic or
an adsorption material such as clay is difficult to estimate, especially
over long time periods. Potential groundwater contamination depends on
the tailings management practices of the mills, including the amount of
water discharged to the tailings pond, the amount of water recycled back
to the mill, the years of operation, and other factors. The potential
contamination also depends on the amounts of various contaminants in the
tailings, the distance between the tailings and the saturated zone (the
aquifer), and the geological and hydrological characteristics of the
intervening materials.
EPA policy for groundwater protection for analogous surface
impoundments is that protection is provided during the operational period
of a tailings pond by an active water management program that includes a
liner on the bottom and sides of the pond. After operations at a tailings
pond cease, long term groundwater protection is provided by a cover that
is installed over the tailings (EPA82).
For existing mills with existing tailings, groundwater under the pond
may or may not be contaminated when these standards become effective. If
the groundwater is not contaminated at a site, use of the pond could
probably be continued with a continuing monitoring program. If the
groundwater is contaminated, corrective actions will be required. In our
view, corrective action in the worst case would require the construction
of a new pond with a liner. The existing pond would be allowed to dry out
and then covered. However, it is possible that moving the entire existing
pile to a new lined pond could be required to provide adequate groundwater
protection.
For new mills, and possibly for future tailings at existing mills,
groundwater protection during operation is assumed to be provided by a
plastic liner, which would cost about the same as a clay liner. Selection
of a site could eliminate the need for a liner, however, if the soil at
the site has proper permeability and adsorption characteristics. The
total disposal system could also be different for these mill sites if
3-8
-------
abandoned surface mines or natural land depressions are nearby. Since the
liner provides groundwater protection only during the operational period
of a tailings pond and since, as explained in Chapter 1, this RIA only
addresses the benefits and costs of the proposed disposal standards, we
have omitted the cost of the liner in the cost-effectiveness analysis of
alternative disposal methods in Chapter 4. In Chapter 5, where we
estimate the industry-wide cost of compliance with the standards over a
projected time period, we include the cost of a liner since that is a cost
that future operations are likely to incur.
3.3 Protection for the Long Term or the Short Term
Mill tailings will be hazardous for a very long time, in the range of
hundreds of thousands of years. This period is determined by the
radioactive half-life of thorium-230 which is about 75,000 years. Methods
providing control for such periods are beyond man's knowledge and
experience. In addition, the presence of permanent contaminants in the
tailings means that their potential hazards will remain forever.
The goal for long term protection is to provide all reasonable
controls for as long a period as the potential hazards remain. Failure of
the controls in this case means the loss of isolation from man and the
environment. Various control methods are examined in this section.
Failures of long term methods can occur by natural phenomena and
through human intrusion, or intervention. Natural phenomena change the
landscape through complex interactions of erosion and deposition,
flooding, climatic changes, earthquakes, vulcanism, and glaciation. Human
intrusion can also take a large number of forms, ranging from common
activities such as construction of dwellings and other buildings, to such
things as drilling, mining, and dam building. Not all of these items
would cause failures of tailings isolation since at some sites these items
may actually increase isolation by, for example, depositing additional
materials or soil on the tailings. Long term protection will vary
considerably from site to site.
3.3.1 Lifetime of Institutional Control
Human institutions can prevent failures of tailings disposal sites.
The problem here is that there is no general consensus on the length of
time institutions remain effective or reliable. In its proposed criteria
for management of radioactive waste (JiPA7&) which have been withdrawn
(EPA81), EPA said that waste disposal plans should limit reliance on
institutional controls to 100 years. The issue of how long reliance can
be placed on institutional controls cannot be settled by scientific or
technical means. Resolution of this issue will be by societal judgment.
It is noted, however, that the tailings will remain hazardous for a much
longer time than man's recorded history.
3-9
-------
Institutional controls are considered active controls in that
continuous monitoring and maintenance actions are performed. For example,
if a cloud burst causes severe erosion of the disposed tailings cover, the
responsible institution would take the corrective actions needed to
restore the cover to its original depth. In contrast, a passive control
method would provide protection by a thick earth cover that is contoured
or graded to promote runoff without erosion. Public health protection in
this latter case relies solely on the disposal system. This is the
passive control approach. In general, the initial costs of passive
controls will probably be greater than those of active controls. However,
because technical or passive controls are more reliable and predictable
over the long term than institutional or active controls, we conclude that
passive controls are the preferred approach. Also because of the long
term hazards involved, the question of how long institutional controls
will remain viable becomes moot. In all likelihood, institutions
established to provide control of the tailings cannot be assumed to last
until the tailings hazards are gone.
Failure of institutional controls does not necessarily imply a
complete breakdown of societal structure. The more likely situation would
be the failure of the individual institution set up to provide control of
the tailings through program reductions, reorganizations, or changes in
priorities or through the loss of special funding mechanisms by
incorporation into general funds, accounting procedures changes, or
others. In short, in this context, catastrophies do not have to be
assumed to have institutional breakdowns.
3.3.2 Human Intrusion
Human intrusion into tailings becomes a serious problem when the
tailings are misused as construction material or fill at occupiable
structures, as discussed in subsection 3.2.1. Intrusion can also increase
erosion which leads to the eventual spread of tailings and increased risk
to man.
The effectiveness of controls in preventing intrusion over long time
periods is difficult to evaluate, at best. Probably the worst scenario is
the identification of a tailings location as a resource area for
construction material by residents of a nearby population center. This
could lead to widespread use of tailings around residences, schools and
other inhabited structures. Any controls which make a tailings location
attractive as a resource area have a potential tor promoting misuse.
Examples are controls such as fences and covers consisting of small-sized
rock. We conclude, therefore, that the disposal site should not be made
attractive through the use of easily removed, valuable materials.
Prevention of intrusion by institutional controls can reasonably be
expected to vary greatly from site to site. Socio-economic conditions of
the area and attitudes of local residents are important factors. These
factors will likely determine the length of time a fence remains an
3-10
-------
effective deterrent to intrusion, even if posted. Annual inspections and
maintenance may help to prevent intrusion since people would recognize the
site is of continuing interest. Periodic controls such as operation of a
sprinkler system for sustaining vegetation may also be an efffective
deterrent, for as long as it continues. In any case, active controls can
only be counted as effective against intrusion for as long as they are
practiced.
Prevention of intrusion for long time periods is more likely to be
successful using passive methods. Thick earth covers, for example, can be
expected to provide significant protection against intrusion as discussed
in subsection 3.2.1. Other passive methods appearing effective against
intrusion are deep mine disposal, below grade disposal, solidification in
a cement or asphalt admixture, or coverings of a tailings cement mix.
3.3.3 Erosion
All surface disposal methods are subject to erosion. Erosion of
stabilized tailings piles can occur as or be caused by sheet erosion,
gully intrusion or erosion, wind erosion, and differential settlement.
Nelson, et al. (Ne83), describe these various modes and discuss long-term
mitigating measures in some detail.
Sheet erosion is caused by unconcentrated water flowing directly over
the surface of the tailings impoundment and the engineering design methods
necessary to control such erosive forces. Sheet erosion is defined as
that erosion which occurs as a result of the impact of raindrops striking
the ground surface or water flowing in small ephermal rills. The amount
of sheet erosion that can occur at a given location depends on the slope
of the land, nature of the cover material, type and density of the cover
material, and rainfall duration and intensity.
Control of sheet erosion can be accomplished by grading the cover to
gentle, flat slopes and placing gravel, cobbles, or rock layers over the
cover, or coarse gravel mixed with finer soil. Such controls can be
considered to duplicate desert landforms that have been stable for
thousands of years and are described as desert pavements or gravel armor.
The design of such controls is quite site specific, however, as emphasized
by Nelson, et al. (Ne83).
Gully erosion is caused by concentrated water flowing over the
tailings that can cut deep channels through embankments or cover materials
and disperse tailings downstream. Gullies can also be initiated off the
tailings area and mitigate upstream into the tailings. The formation of
gullies depends on topographical features, such as slope angle and slope
length, the existence of stable base levels on or near the site,
erodibility of the soil, and the flood flow velocity.
3-11
-------
Control of gully erosion is best provided by prevention of gully
initiation. Topographical features can be altered by providing gentle and
shorter slopes, gradual changes in grade, and establishing base levels
around the site (rock trenches, wing walls, etc.). Soil erodibility can
be reduced by providing larger grained soils (gravel) and/or natural
vegetation. Flood flow velocity can be reduced or eliminated by providing
diversion ditches. Gentle and short slopes can also reduce this
velocity. Depending on a given site's features, it is likely a
combination of these controls will be required.
Wind erosion is caused by suspension of small particles in the air
and by creep of particles moving along the ground surface. Materials most
highly susceptible to wind erosion are fine-grained non-cohesive sands and
silts with diameters in the range of 0.02 to 0.10 mm. Particles less than
0.002 mm, which are classified as clays, are highly resistant to wind
erosion due to cohesion.
Control of wind erosion can best be accomplished by increasing
surface roughness through vegetation and different rock sizes. Measures
taken to control water sheet erosion generally should minimize losses by
wind erosion.
Differential settlement is not erosion itself but can initiate
erosion by channelizing runoff. It can also cause failures by cracking of
cover material and by impounding water in depressions. Factors which
cause differential settlement include differences in compressibility
between different grain sizes of tailings, non-uniformity of tailings in
the impoundment, and variation in compressibility of underlying materials.
Controls for differential settlement are surcharging and grading.
Surcharging involves placing more cover material than necessary over
compressible materials to cause a known amount of settlement within the
material. Grading also places additional cover over compressible
materials, where differential settlement is not expected to be great.
3.3.4 Floods and Other Natural Processes
Natural processes that can destroy the integrity of disposed tailings
piles include floods, winds, and earthquakes. Floods are probably the
greatest hazard to integrity. Methods are available to protect piles
against floods. New piles can be located so as to minimize disruptions
from floods and winds. For existing and new piles, diversion ditches and
embankments can be constructed, rocks can be placed on the slopes of piles
(and on top if needed), and the tailings can be graded to gradual slopes.
Existing piles can also be moved if sufficient protection is not afforded
by these methods. These are all passive controls.
3-12
-------
The time over which controls should be effective is an important
factor in standards for long-term protection. Specifying this time
directs the design of disposal methods that have reasonable assurance of
providing such effectiveness over this period. The design of a tailings
disposal method is similar to the design of other major projects, such as
dams, bridges, causeways, etc., that are subjected to natural disruptive
processes (Ju83) (Ne83) (Co78).
The first design step is to determine the size of the flood that will
be used in the design of the disposal method. This is accomplished by a
probabilistic analysis. For example, a flood of a certain magnitude will
occur periodically, i.e., a 100-year flood is defined as a flood that has
a recurrence rate of 1/100 each year, or 0.01 in any one year. The
probability that a 100-year event (flood) will occur sometime during a
100-year period is 0.63, as is the probability that a 1000 year event
(flood) will occur sometime during a 1000 year period. Thus, the
probability is high that an event with a recurrence time equal to the
period of concern will occur within the period of concern.
However, the recurrence time becomes very long for low probabilities,
regardless of the period of concern. (The recurrence time defines the
size, or design, of the event (flood), i.e., a recurrence time of 10,000
year flood.) For example, for a probability of 5 percent the design event
is 2000 years for a 100-year period of concern, is almost 10,000 years for
a 400-year period of concern, and is 20,000 years for a 1000-year period
of concern. Thus, specifying the period of concern (or the period over
which protection must be provided) determines the size of the event
(flood) for design purposes, given some reasonably low probability that
the event will occur within the period of concern.
The long recurrence times of these design floods preclude the use of
historical data, which are of too short a duration. Rather, the design is
based on the probable maximum flood (PMF), which in turn is determined
from the probable maximum precipitation (PMP) over the area that could
effect the disposed tailings. It is important to recognize that the size
of flood is not proportioned, in general, to the length of the period of
concern. That is, in most cases the PMF is not significantly larger than
projections of floods for only moderately long periods of concern (e.g.,
1000-year floods). Nelson, et. al. (Ne83), discuss this in detail,
especially in regard to size of the drainage basin contributing to the PMF
at specific sites. They conclude, "To provide for a level of risk
consistent with normal engineering practice for 200, 500, or 1000-year
stability periods requires a design storm having a recurrence interval of
several thousand years. Because the PMP is based on site specific
physical meteorological limitations which avoid the inaccuracies
associated with extending limited data bases for long time periods, it is
reasonable and prudent to use a PMF based on the PMP as the design flood."
3-13
-------
3.3.5 Time Period Considerations in this Analysis
Based on the above discussions, we found it necessary to choose a
time period for evaluating the effectiveness of controls. A relatively
short time period of about 100 years was considered first since this was
proposed as the limit for reliance on institutional controls (EPA78). We
concluded that this time period was of little use since both passive
controls and active controls, assuming 100-year institutional contol,
maintained their initial effectiveness for the entire period.
A period of about 1,000 years appeared more reasonable for evaluating
the effectiveness of controls and was selected. Actually this 1,000 year
period can be considered to range from a few hundred years to a few
thousand years, depending on individual site characteristics. This
selection allows the decision makers to choose from a much broader array
of options than just the difference between active and passive controls.
This is due to the expected variation of the effectiveness of controls
over the longer time period.
In general, the effectiveness of controls over time can be rated from
best to least as follows:
BEST o Deep geological disposal
o Below-grade surface disposal
o Above-grade surface disposal, entire area covered with
thick earth and rock cover
o Above-grade surface disposal, entire area covered with
thick earth and slopes covered with rock cover
o Above-grade surface disposal covered with thick earth
LtAST o Above-grade surface disposal with thin earth and
maintained
This ranking assumes the tailings pile is located where erosion
occurs. If tailings are located where soil deposition is taking place,
the assessment will differ significantly as long as deposition continues.
3-14
-------
REFERENCES FUR CHAPTER 3
Co78 Costa, J. R., "Holocene Stratigraphy in Flood Frequency
Analysis," Water Resources Research, August 1978.
EPA78 Environmental Protection Agency, "Criteria for Radioactive
Wastes," 43 FR 53262, November 15, 1978.
EPA81 Environmental Protection Agency, Proposal Withdrawn, 46 FR 17567,
March 19, 1981.
EPA82 Environmental Protection Agency, "Hazardous Waste Management
System," 47 FR 32274, July 26, 1982.
Ju83 Junge, R. W., "An Analysis of Control Standards for the Long-Term
Contaminant of Uranium Tailings," Transcripts of Public Hearings
on EPA's Proposed 40 CFR 192 Rules, Denver, June 1983.
Ne83 Nelson, J. D., Volpe, R. L., Wardwell, R. E., Schumm, S. A., and
Staub, W. P., "Design Considerations for Long-Term Stabilization
of Uranium Mill Tailings Impoundments," Colorado State
University, Report to U.S. NRC, August 1983.
NP75 National Council on Radiation Protection and Measurements,
Natural Background Radiation in the United States, NCRP Report
No. 45, 1975.
NRC80 Nuclear Regulatory Commission, Final Generic Environmental Impact
Statement on Uranium Milling, NUREG-U706, 1980.
Ro81 Rogers and Associates Engineering Corporation, A Handbook for the
Determination of Radon Attenuation through Cover Materials,
prepared for the Nuclear Regulatory Commission, NUREG/CR-2340,
1981.
Ro83 Rogers, V. C., Personal communication, 1983.
3-15
-------
4. Benefit-Cost Analysis
4.1 Overview
This chapter formulates several alternative standards for regulatory
analysis. Each alternative represents a different combination of
regulatory controls which would be required to meet the objectives of the
standard discussed in the previous chapter. Once these alternatives are
determined, we then present two analytical methods of quantitatively
evaluating the benefits and costs of each alternative. The first method
relates the disposal costs for each alternative to the health effect
estimates from radon emanating from the tailings piles. Although this
analysis relates only one category of benefit to the entire cost of
disposal, it attempts to determine if the benefits of control are greater
than the cost of control. In the second benefit-cost methodology, we
develop a weighted index of all categories of benefits and estimate the
relative effectiveness of the assumed engineering control methods in
providing the different types of benefits for each alternative standard.
We then relate the tailings disposal costs of each alternative standard to
the estimated value of this index, to determine, in a relative sense, the
changes in cost required for alternative control levels. Both analyses
are performed on a model pile basis, done separately for existing tailings
and new tailings piles.
4.2 Formulation of Alternative Disposal Standards and Selection of
Control Methods
Based on the public comment of the proposed standards, we have
reformulated the alternative disposal standards and increased the number
of alternatives to be considered. Three types of alternative controls are
examined in combination with five levels of radon emission control. These
three alternative controls are active control of tailings for a period of
100 years, a 1000-year longevity requirement for passive control, and the
1000-year longevity requirement together with radon control during mill
operation for new tailings piles. The five levels of radon emission
control after disposal, expressed in terms of pCi/m^s, are no
requirement, 60, 20, 6 and 2. Thirteen different combinations of controls
have been formulated as alternative standards and these are displayed in
matrix form in Table 4.1. Alternative A is the no control case.
Alternatives Bl, B2 and B3 combine the active control for 100 years
requirement with three levels of radon emission control - no control, 60
and 20 pCi/m^s, respectively. Alternatives Cl through C5 combine the
passive 1000-year longevity requirement with all five levels of radon
emission control after disposal. Alternatives D2 through D5 combine the
radon control requirement during operations for new piles, plus the
1000-year longevity requirement for all piles, with four levels of radon
control after disposal. Under Alternative D, the controls for disposal of
existing piles would be the same as under Alternative C for the respective
level of radon emission control (level 2 through 5).
4-1
-------
Table 4.1. Alternative Standards - Combinations of
Regulatory Controls
2
n , n Radon Control after Disposal (pCi/m s)
Other Controls —-——-3 : 7^i- —-*-— —-
No Radon Requirement 60 20 6
No Controls
Active control
for 100 years
Passive control
for 1000 years
1000-year passive
longevity, plus
radon control
during operations
for new piles
A
Bl
Cl
B2 B3
C2 C3 C4 C5
D2 D3 DA D5
4-2
-------
These alternatives thus consider both active and passive control of
mill tailings and several different levels of radon control. Although
Alternative D adds a non-disposal requirement - radon control during mill
operations - the effect of this operations requirement influences the
selection of the tailings disposal method, as described below.
For each set of alternative standards (B, C and D), we have selected
a disposal technique which we assume for analytical purposes will be
necessary for compliance. All of these disposal techniques represent, in
some degree, undemonstrated technology since none of the tailings piles
has yet been disposed, and the predictability of performance over the long
term is not well established. Within each set of alternative standards,
the disposal technique remains the same for each level of radon control
after disposal. However, the thickness of the earth cover required does
change in order to comply with each radon control level.
In Alternatives Bl, B2, and B3, we assume that active control methods
will provide compliance with the standards. These methods include
maintenance of the earth cover and fence, and irrigation of the vegetative
cover for 100 years. The sides of the pile are graded to a 3:1 (H:V)
slope while the top of the pile is landscaped. Earth cover thicknesses of
0.5, 1.5, and 2.4 meters are assumed for compliance with the three
different radon control levels. A fence is constructed around the pile
after allowing 0.5 km from all sides for an exclusionary zone.
For Alternatives Cl through C5, we assume that the passive control
method of rock cover on the slope plus an earth cover including a 0.5
meter layer of pebbly soil on top of the pile will provide compliance with
the 1000-year longevity requirement. The amounts of earth cover required
to attenuate the radon assumed for these methods are the same as in
Alternatives B and D, as the layer of pebbly soil on top just replaces the
last 0.5 meter of earth cover. The earth cover thicknesses are 0.5, 1.5,
2.4, 3.4, and 4.3 meters for alternatives Cl through C5, respectively.
The sides of the pile are graded to a 5:1 (H:V) slope and no fence is
needed.
Under Alternatives D2 through D5, control of radon during mill
operations is assumed to be met by requiring staged disposal of tailings
below grade. Two pits are constructed initially with tailings pumped to
the first pit until it is full and then pumped to the second pit. When
the first pit is sufficiently dry, the third or fourth pit is excavated,
with the excavated earth used to cover the first pit to the original
ground contour. This process continues sequentially until the end of mill
life and thus minimizes the time over which tailings will be uncovered.
The earth cover thicknesses required are 1.5, 2.4, 3.4, and 4.3 meters for
Alternatives D2 through D5. As stated earlier, this control method is
applicable to a new pile only. However, if the radon requirement during
operations is directed at existing mills, the result may be that future
tailings generated at that mill may have to be placed in a new impoundment
designed for staged disposal. Chapter 5 discusses the economic impacts of
this alternative.
4-3
-------
Tables 4.2 and 4.3 summarize the characteristics of each control
method for existing and new piles, respectively. The FEIS contains a more
detailed description of the control methods.
4.3 Cost Analysis
We developed disposal cost estimates for each control method on a
model pile basis. We have made conservative assumptions for these cost
estimates, so as to accommodate the uncertainties of performance that must
be considered to provide "reasonable assurance" of conformance to the
standards. The reader should.refer to the FEIS for a detailed explanation
on the development of the model pile cost estimates.
For existing tailings, we developed the disposal cost estimates for
three model-sized piles. As of January 1983, there were 26 licensed
uranium mills with tailings piles. An analysis of these piles indicates
that they vary widely in size and, thus, control costs would vary
greatly. Consequently, we grouped the existing piles into model piles as
follows:
a. 2 million ton pile on 122 acres with an average depth of 2.20m
No. of piles in this group = 11
Average toirs per pile = 1.9 million
(Range = 0.0 to 3.2 million tons)
Average area covered = 122 acres
(Range = 47 to 200 acres)
b. 7 million ton pile on 180 acres with an average depth of 5.64 m
No. of piles in this group = 12
Average tons per pile = 7.2 million
(Range = 4.5 to 10.9 million tons)
Average area covered = 180 acres
(Range = 85 to 400 acres)
c. 22 million ton pile on 279 acres with an average depth of 11.25 m
No. of piles in this group = 3
Average tons per pile = 22.5 million
(Range = 19.2 to 27.6 million tons)
Average area covered = 279 acres
(Range = 210 to 328 acres)
For new tailings piles, we developed cost estimates for a single
model pile. This model pile is based on the quantity of tailings
generated by NRC's model mill in their GEIS (NRC80). The NRC model mill
has an ore-processing capacity of 1,800 MT per day. The ore grade is
expected to average 0.1% uranium and the uranium recovery efficiency is
assumed at 93%. The mill is operated 310 days per year (i.e., 85 percent
capacity utilization rate) and the average annual production is 580 MT
yellowcake which is 90% l^Og. The tailings will be generated at a
rate of 1,800 MT per day, or 558 thousand MT per year, or 8.4 million MT
during the assumed 15 year operating period of the mill. The tailings
cover an area of 80 ha with earth embankments around the tailings bringing
the total area to 100 ha. The depth of tailings is about 8 meters.
4-4
-------
co
O)
t>0
C
• H
CO
T3
O
O
(-1
4-1
C
O
CJ
T3
C
CO
cfl
T3
CO
8!
CO
C
a>
4-1
i—i
<
CO
H
CO
0
• H
4-1
CO
• H
r-l
0)
J-J
o
CO
^i
CO
,sz
u
13
O
f;
4-1
0)
IS
r— 1
O
r-l
C
o
CJ
>^
r-l r-l
5 rO -H
in ,Q o
• QJ CO
Pu
c
o
^(i
o
o
p^
o
u
rC
4-1
^1
CO
w
T3
O
,c
4-1
0)
1— 1
o
p4
4-J
c
o
Ol
>
• H
4J
CO
C
M
0)
4J
i-H
60
e
a.
CO
o
CO
-o
a
CO
cy
o
C
cfl
C
QJ
4-1
0
•r-l
CO
*Sr*
p.
O
f— 1
c
o
CO
0)
o
r-l
CO
OJ
^
0
CO
s~\
e
CO
CO
at
C
fM
0
•H
^0
H
C
0
• r-l
g,
•r-l
co
(U
0
•o
M
CO
13
C
CO
4-1
c/>
XXX
CO
co
r-l
cO
a>
000
o o o
X X X X X
X X X X X
CO CO
m in -d-
O r-l £N
ro
cs en
cs co «* m
u O o o
ca co co co
cO cO CO CO
a> at a> ai
WWW
I I I
—I CN CO
WWW
w w w w w
I I I I I
i—i CM ro rj u cj
rH tN CO
(Q (Q (Q
i— i CN co
CJ CJ O
m
CJ
CN co •* in
Q Q Q O
4-5
-------
CO
Ol
0)
CO
•O
O
X
4-1
01
o
i-i
4-1
C
o
o
CO
co
T)
I-l
Cfl
T3
CO
4-1
CO
•r-l
4-1
Cfl
C
I-l
0)
fO
cu
r-l
,£>
cfl
H
M
C
'o.
CO
o
CO
C
CO
iJ
CU
e
• H
(J
O>
-a
CO
rl
4-J O
3
CO O
O r-l
•H CU
jj pQ
CO
• H
)-l C
O CO
CO C
t-l 0)
CO 4-1
-c c
O -H
CO
T> X
O
,jC
4J >, a
01 rH r-l O
X E -Q -rl £H
in f> o
r-l • O> tO C
O PH Q
M
C C
O O co
C_> CU
o o
O r-l
pi to
01
a.
Q
1— 1
to
^
rl £
CU v^
O co
CJ co
.C C
rl O
CO -H
W rC
H
0
-c c
4-1 O
S -*-1
CO
O M
r4 *rH
4-1 CO
C Ol
0 O
CJ
Ol
4-1 I-l
ctf cfl
C *T3
rl C
01 Cfl
_^J 1 J
r-l W
XXX
XXX XXXXX
CO CO CO
I-l M rl
CO cfl CO
^
t— 1
C O 0 O
O O O O
r— 1 i — 1 i — 1
CO
4-1
C
01
J
C XXXXX
cfl
.0
E
1—4
CO
•n XXXXX
4-1
•r-l
C
• I-l
14-1
O i — ii — ii — i i— i i — !< — ii — ii — i
rj co co co wi 10 m u~\ u^i
o
4-1
o
3
I-l
4-J
CO
O rH CN •— 1 CN f> -^
Z K Z & Z Z: & Z:
& III 1 1 1 1 1
1 rH CS CO r-H CN CO »3~ m
•— ICNCO rHCSICO-d-LO
-------
The total cost and unit cost for each control method and model pile
are displayed in Table 4.4.
4.4 Benefits Analysis
The benefits of each control method are the degree to which each of
the goals of the standards is achieved. Most of the benefits are
health-related (erosion prevention avoids contaminating land, and
therefore affects land use). While some can be quantified in terms of
health risk, others cannot. The benefit we are best able to estimate is
the number of lung cancer deaths averted by radon control. We can
estimate the reduction in radon emissions resulting from the placement of
earth covers and then translate the radon emissions reduction into lung
cancer deaths averted by using models for radon inhalation. The other
benefits from tailings disposal are not quantifiable since we do not know
what would take place in the absence of the environmental control.
Consequently, the incremental benefit of the control cannot be estimated.
While we cannot quantify these benefits, we nevertheless can qualitatively
discuss the likelihood that these control methods may provide protection
and the length of time over which they are expected to remain effective.
Several measures of the benefits of control of mill tailings have been
developed. The benefits provided by each disposal method are discussed
in-depth in the FEIS which accompanies this RIA. Table 4.5 summarizes
these benefit measures.
The benefit of prevention of misuse is expressed in terms of the
likelihood that misuse might occur. The likelihood of misuse during the
period of effectiveness of these methods ranges from very likely for the
no control case (A) to very unlikely for the methods requiring 3 or more
meters of earthen covers (C4, C5, D4, and D5).
The benefit of prevention of surface spread of tailings is expressed
on the basis of the number of years over which erosion of the tailings is
prevented. Erosion prevention is estimated to range from 100 years for
the one-half-meter earth cover (Bl) to many thousands of years for the
below-grade methods requiring greater than 3-meter earthen covers.
The benefits of radon control are estimated in terms of the total
number of lung cancer deaths which are avoided and the maximum lifetime
lung cancer risk to an individual living close to the pile. The total
lung cancer death rate from radon emissions from existing tailings piles
at active mill sites is estimated to be about 19 deaths per century for
each pile if no controls are used. For new piles, we estimate the lung
cancer death rate to be 13 deaths per century for each new pile. This
estimate is lower than the average for the existing piles since we believe
that new mills in the future will be located, on average, in less
populated areas than they have in the past. The FEIS presents the basis
for these estimates. The standard alternatives requiring a 20 pCi/m^s
emission limit and a 1000-year longevity requirement (C3 and D3) would
4-7
-------
Table 4.4. Disposal Cost Summary for Model Piles'3'
Control Method
Total Cost
(Millions of 1983 $)
Unit Cost
($/MT of Tailings)
Model Pile Size (MT)
_2 _7 22
2.10 0.91 0.49
3.45 1.49 0.79
4.60 2.00 1.05
1.60 0.90 0.62
2.95 1.50 0.94
4.15 2.04 1.22
5.45 2.64 1.54
6.65 3.17 1.82
Model Pile Size (MT)
8.4
0.15
2.73 (1.36)
3.15 (1.79)
3.63 (2.26)
2.73 (1.36)
3.27 (1.90)
3.75 (2.38)
4.26 (2.89)
4.75 (3.38)
4.81 (3.85)
5.19 (4.23)
5.67 (4.70)
6.10 (5.13)
^a'Cost estimates in parentheses exclude the cost of a liner which
provides groundwater protection during the operational phase of a
tailings pond.
Existing Tailings
Piles:
Bl-E
B2-E
B3-E
Cl-E
C2-E
C3-E
C4-E
C5-E
New Tailings
Piles:
A
Bl-N
B2-N
B3-N
Cl-N
C2-N
C3-N
C4-N
C5-N
D2-N
D3-N
D4-N
D5-N
Model
2
4.2
6.9
9.2
3.2
5.9
8.3
10.9
13.3
Pile Size (MT)
7 22
6.4 10.8
10.4 17.3
14.0 23.0
6.3 13.6
10.5 20.6
14.3 26.8
18.5 33.8
22.2 40.0
Model Pile Size (MT)
8.4
1.3
22.9 (11.4)
26.5 (15.0)
30.5 (19.0)
22.9 (11.4)
27.5 (16.0)
31.5 (20.0)
35.8 (24.3)
39.9 (28.4)
40.4 (32.3)
43.6 (35.5)
47.6 (39.5)
51.2 (43.1)
4-8
-------
"""^
• '
s
4-1
O
^
CO
M\
d3
•H
•H
P
UJ
QQ
"S
(0
TI
o
id
*^
CO
0)
*J
1J
>
4-1
•H
01
00
d
l_3
•N
o
cu
rH
•H
PH
M
CU
04
•d
01
•d
•H
O
•H
4-1
g
01
3
CO
H
cd
cu
v^
CO
f"fr M
o cd
O 0)
H >*
CO
M
4-1 Cd
CO CU
H ^»
•H
fn O
O
•-I
M
01 '-N
o d
d o
<3 IJ
0
60 3
d -d
3 01
.-1 H
co en
CN CM co CO
O O O O
H H H H
d d d d
•H iH iH -H
CM H SJ- H
ca ca
•d -d -d
01 CU Ol
M H M
r** ^ >>
H H rH
01 Ol 01
3 3 3
•H -H iH
>, Ol CO CD
H AS CO CO
^ tj *-H hH
rH CM CO
CO
O O O O O
O O O O O
rH rH 0 0 O
rH H rH
A A
CM i— ( r** cr»
in in oo oo co
en H H H H
1 1 1 1 1
in sr sr oo en
VO O CM CM CM
rH H H rH
^5 ^O CO CTv O^
H H H H i-H
I 1 1 1 1
r^. o CM co co
rH rH rH H
s~^ ^^
m m
o o m oo en
m oo en o> o>
CN co CO sf , >,
rH rH
>-, 01 01
rH X ^
01 iH iH
A! t-.H rH
•H rH d d
>M^1 01 & P
rH >A
*A CO rH W M
•H CU d CU 01
r-7 hH H^ ^ ^
rH CM CO Sf U->
O O CJ CJ O
0 O 0 O
0000
o o o o
rH rH i-l H
A A
sf sf 00 CTt
O CM CM CN
rH H H H
O CM CO CO
I-H rH i-H rH
^•N S~^
^^ "] ^
c^ in oo en
co CTN en en
CO co sf s|-
o o o o
rH H H H
d d d d
•H iH iH -H
sr H CO H
co ca ca
co d d d
*"O cij n} cd
d ca co ca
id 3 3 3
ca o o o
3 43 43 43
04-14-14-1
£ >> >> >^
d d d
s IS S
X >•,
t-l i-H
0) 01
•H iH
rH'rHV'd "3
01 01 3 3
jf3 tD ^ ^
CM co si- m
Q Q Q Q
. m jy ^
01 00 4-1 4-1 -H 4-1 CO
o d o H
d H&l! .Sflff'ac3V
M CU 0) Ol CO 43 •drH cdcupco
3 -d 43diHOoicucdf-i4J>m
CO O B Xtd4ji-)430>diH "
CO g 3OOIOl4-lrHl43lH4->CaO
cd d4-l 0 CU 4-1 CO rd d CM
cd rHriSMdOgdO
Ol M >^rH O O 4J O ClHCO
rH ,43 4-» 4J O
id oon,H>-. OH4-I i-j3co
d H -HcdoMxdoi -d,d4-J4-iai-i3o d
CU CU 43CUMCUd'HiH43ca Olid
M O 4->>3CJOIOIXScOCOOO
: •H4-IOrHOCd'<'Id"
CU Ol 4J d M M - Ol 4-1 CM
Ol 43 rHcdOICUMCU P.'-N cu a a M
•d 4-i -Hdocxcui-iexc/iMoioi
•H 43M P,cdO«
>• e SOIMCO w-HHi-H
S>-i O 4J CU 43 W CO Pt, Q 4-1 01 PP
4-1 M «r-jO.'M4360« OO.
ex-H IH oi
4-1 00 U O.O4-I -d-HrH CUCd-H
d oi mcden cdcddo H4-i
T3 O 4-) & CU iH d 4-1 > -H OlCUCd
OIH cu euco-d o -H M43>f3
H a dOI HididiHHtudo
•H 00 BIO Hd -H-dMiHTar-l
COM d cu o cu o " ex cuMdo
HOI iH Cd O>-HOIC04-lOlc04H
o ex > cuuicd4-io^idHOi
OTJ H 4jfH4->d'dCNd HCfleU
cd d 3 CO T) CU H cd 13 4-1
4-1 cd 01 CO O cOH434JOOI(3cO
43 d • 43 d CO O iH 4-1 >> 01 i
d CU O cO CU H>>CU d O 13 4J
iHr* 4-1 4-lHcUCOH CUCUOOCO
M 01 M i-l 43 4-1 01 M 43 CO 0 -H O)
OIH T) CU ex HOI43O4-IOHH
cu cu ex H 3 43 4-> m 43 cud
dH i COHW op o cu ex 01
•HO 3 CJOOiH4IH>-,>-,d H CU
bpH CO dSHH43rj-HCOiHO)43
d4-i co -d-H -H s-d-dwo
cud as dHoico|ST)4Jdoddcu
O cd-HH-H CUd343oiid>
HO H COOI43OI4-1CUO4J (3 Cfl
0 cd Pp4-i43HHcdOHCUa)OI43
4-1 d 3 4J OIH H a 43 4-1
O T) CO 00 43 01 H 3 4-1 d H)
4-ITt iH 0)d4J'4-ldOICQH -HO
•Hid > f»iHcdd CUO. OHtd-H
•dH -H -H 4J 43 01 4-1 00 dHOaH
Ol 13 4-1 CO 4-1 4>i Cd CO O 4-1 4-1 O)
H-d d CO -H CO 43 Ol 43 -H d H CX
O Ol -H (3XOI4J4J434-1C10OCOCO
•H fi 0) 4J CO CU O CO 0) H
o 4-1 d oi to oi cu o cu H oi >-, cd
d-H cd 4-1 vo a H 4J 4-1 -r) oi d 1 oi
O HCM-HCdCd Ol43CUO>.
010) O 4-1 O
CO H O 4J OCOO4-ld'OCUO
COCU 01 MH OI-HOIOIO-HdOl43H
cd 43 o M ^ 4-1 -n O 4-1 4-1
4-1 d 01 O OHOOIHiHM-l CU
CO Id 004-1 -COO1M0034JCUH43-
4-IH O d CO 43 CX CO CJ CO OI4-J>>
•HO ldO»HH4J HOd>H4J H
4H 4-1 H MOOWcOMCOCUO OlHHOI
01 Cd CO [IH CO 3 4-1 > Ol Cd O) >
SOI 4-1 CUH O 4-1 d CO CO 43 CU >iH
O cd 43 CU 01 eX 01 43 4-1 Ol 0) O 4-1
43d 4-1 4-l>43COcUHd4-l H CO O
Id Cd4-l-HScOcOl04-IOOCdO)OI
IH-H m m -d > cusoicucoo,
OH 0 OOld -Hd-dO-dHiOCO
0. • 43HO-3-H 43 OOCU
CO 0 £t O-H O) -
CO M CX 4J>,-HCXOIHcflr44-lOH4-)
Bd H H H3H43iH4->Hd
•Hbo cu co oicodcnoo-Hco-H4-id 001
4-1 -H a 00 SdOOOdCXOI4J iH-dHO
COCO -Hd O -H d-HIHCOco Ol 4J M
cu oi 4-1 -H H cd co -H 4J ^ oiHHidcu
13 OIH 4J 01 H CO Ol CO 3 -H 3 O CX
01 4-1 -H OIHH-HiHdi-ICUOCUCOO
43m -Hid 43oiiHidX 4343y43cadin
HO I-14J HCXCX4-iOiaNH4-iO4-ic03oO
Id 43 O
4-9
-------
reduce this rate to about 1 death per century for both existing and new
piles. The benefit from a 2 pCi/m^s limit (C5 and D5) would be the
virtual elimination of the radon risk. The lifetime risk to the
individual living close to the edge of the pile is estimated to be 2 in
100 for an uncontrolled tailings pile. This risk is reduced to 1 in 1,000
for a 20 pCi/m^s emission limit and 1 in 10,000 for a 2 pCi/m^s limit.
The benefit of protecting groundwater is the preservation of its
existing quality for future uses. The great majority of the potential
contamination of groundwater is the result of process fluids which are
discharged to the tailings pond during the operating life of the mill.
This potential contamination can be prevented by either the installation
of a liner (before tailings are generated) or the selection of a disposal
site with favorable geological and hydrological characteristics.
Groundwater contamination may also occur after disposal of tailings if
precipitation infiltrates the tailings and then enters an aquifer. As
discussed in Chapter 3, groundwater protection after disposal is provided
by the earthen cover placed over the tailings. The benefit of groundwater
protection is measured by the number of years over which the cover is
expected to prevent contamination. This benefit is estimated to range
from 100 years for the active maintenance disposal methods (B) to greater
than 1000 years for the methods requiring a greater than 3-meter earthen
cover. Groundwater protection during the operational phase of a tailings
pond is covered by the proposed operations standards and, therefore, is
not addressed in this benefits analysis.
One benefit which is not presented in Table 4.5 is the reduction in
radon emissions from tailings piles during the operational period of a
mill associated with Alternative D. This alternative assumes a
staged-disposal system below-grade, which will reduce the amount of time
that tailings remain uncovered and, thus, reduce the cumulative amount of
radon emissions. We do not have sufficient information on the
effectiveness, feasibility and costs of alternatives that would control
releases from operating mills to include this issue in our benefit-cost
analysis. As stated in Chapter 1, we are preparing an Advanced Notice of
Proposed Rulemaking to attempt to collect this information for purposes of
future rulemaking on this issue. We have analyzed the staged disposal
method for its benefits as a long-term disposal system, but we point out
that it has other benefits associated with its use.
4.4.1 Radon Control Benefits Versus Disposal Costs
Since the radon control benefits are the only benefits that we can
quantify, we have compared the disposal cost for each method to the number
of deaths avoided to gain some insight as to the level of benefits
associated with control expenditures. Since radon control is just one of
several benefits to be realized from control of tailings, the results of
this limited benefit-cost comparison can be viewed as determining the
minimum level of benefits which is obtainable. Table 4.6 shows for each
disposal method deaths avoided for 1000 years and the tailings disposal
4-10
-------
Table 4.6. Radon Control Benefits Versus Disposal Cost
Control
Method
Deaths Avoided
for 1000 Yrs
per pile'3)
Existing Tailings
(7 million MT pile):
A 0
Bl 38
B2 57
B3 67
Cl 95
C2 152
C3 181
C4 187
C5 189
New Tailings:
A '0
Bl 26
B2 39
B3 46
Cl 65
C2 104
D2 104
C3 124
D3 124
C4 128
D4 128
C5 129
D5 129
Average
Model Pile Cost Per
Disposal Costs'^) Death Avoided
(106 1983 $) (106 1983 $)
0
6.4
10.4
14.0
6.3
10.5
14.3
18.5
22.2
1.3
11.4
15.0
19.0
11.4
16.0
32.3
20.0
35.5
24.3
39.5
28.4
43.1
.17
.18
.21
.07
.07
.08
.10
.12
.44
.38
.41
.18
.15
.31
.16
.29
.19
.31
.22
.33
Incremental
Cost Per
Death Avoided
(106 1983 $)
.17
.21
.36
.07
.13
.63
1.95
.39
.28
.57
.12
.21
.93
3.15
(d)
(d)
(d)
(d)
'a'These estimates are rounded to the nearest whole number. In
performing the incremental cost per death avoided calculation, the
estimates of deaths avoided were carried to a few decimal places to
allow for a more accurate comparison of the incremental cost of each
control method.
(^'Excludes cost of liner for groundwater protection during operational
phase of mill.
^'Incremental costs and deaths avoided measured from Method A.
measurable incremental (post-disposal) radon health benefit from
previous method, but other incremental benefits, such as prevention of
misuse and control of radon during mill operation, are realized.
4-11
-------
cost, both estimated on a model pile basis. (We recognize that this
analysis ignores benefits beyond 1000 years for some cases.) This
benefit-cost comparison is done for the model new tailings pile and
medium-sized model existing tailings pile.
The disposal methods are listed in ascending order of the number of
deaths avoided by radon control, and both the average and incremental cost
per death avoided is shown for each method. The average cost is simply
the ratio of the disposal cost to the total number of deaths avoided. The
incremental cost is the ratio of the change in disposal cost to the change
in deaths avoided from the previous disposal method. EPA has estimated
from studies of market compensation for small changes in workers' risks
that people would be willing to pay from 0.4 to 7.0 million dollars to
save a statistical life, at the margin (ERC83). Upon examining the
average cost estimates in Table 4.6, we see that all control methods fall
below the lower end of the empirical range. A more appropriate measure of
the benefit-cost tradeoffs of the alternative disposal methods is the
incremental changes in costs and benefits. The estimates of incremental
cost per death avoided by radon control indicate that all control methods
for both existing and new tailings piles fall below the $7 million upper
end of the empirical range. The incremental cost remains relatively
constant at $100,000-200,000 per death avoided through control method C3,
then increases by a factor of 5 to about $600,000-$900,000 per death
avoided for control method C4, and then increases by a factor of 3 to
about $2-3 million per death avoided for control method C5.
There are several limitations to this type of benefit-cost
comparison. A major limitation is the determination of the time period
over which the deaths avoided should be estimated. Since the mill
tailings remain hazardous for thousands of years, the benefits of control
are also realized for thousands of years or as long as the control method
remains effective. The computational problems of estimating cost per
death avoided are evident. The longer the time period considered, the
more favorable the ratio becomes. A related issue is how the future
stream of benefits should be related to costs which are incurred all at
once at time of disposal. Should the present value of benefits and costs
be used or not? Another limitation of this type of analysis is that the
empirical range of the value of a statistical life is based on people's
estimates of the value of reductions in relatively small risk activities
and not a direct estimate of the value of life. Therefore, the
application of this estimated range of life valuation to regulations
concerning human health effects may be questionable. Another limitation
is the degree of uncertainty in the radon death estimates. The FEIS
explains the estimation procedure for the deaths avoided and the sources
of uncertainty. Lastly, this benefit-cost comparison only covers one
category of benefits and, therefore, ignores the attainment of other
benefits for the same expenditure.
4-12
-------
To address the first limitation, we have estimated the incremental
cost per death avoided for the alternative radon emission limits (Cl
through C5) under four different sets of assumptions. By examining these
different incremental cost estimates, one can gain more perspective on
under what set of conditions does a level of control become acceptable.
These different cases are as follows:
o Nationwide deaths avoided over a period of 1000 years
(Table 4.6)
o Regional deaths avoided over a period of 1000 years
o Nationwide deaths avoided over a period of 100 years
o Regional deaths avoided over a period of 100 years
A comparison of the incremental costs for each control level under
these scenarios is presented graphically in Figure 4.1 for the medium-
sized model existing pile. Also highlighted on this figure is the .4 to
7 million dollar empirical range for expenditures per statistical life.
The results of this display indicate that Alternative Standards Cl, C2,
and C3 fall below the upper end of this range for every scenario. The
incremental cost per death avoided for Alternative C4 (6 pCi/m^s) is
within the range for three of the scenarios, but is significantly higher
for the regional health effects - 100 year case. Alternative C5 is within
the range when estimates of nationwide or regional deaths for 1000 years
are used. As the curves further indicate, the incremental cost increases
substantially in a relative sense once one goes beyond C3 to C4. Although
it is difficult to interpret these data, a few conclusions can be made.
First, radon control as far as 20 pCi/m^s is justified on benefit-cost
grounds over a variety of conditions. Second, control to 6 pCi/m^s may
or may not be justified according to one's view on what health factors
should be considered. Also, on a relative basis, C4 is about 5 times as
costly as C3.
4.4.2 Effectiveness Index
Even if each of the benefits could be quantified in some manner,
there still would be no common numerical basis for expressing each
estimation. To perform a benefit-cost analysis of disposal methods, there
is a need for an expression of the combined benefit of each method. While
we cannot quantify these benefits, we believe that we can quantify, on a
relative basis, the effectiveness of disposal methods in providing each of
the classes of control. This quantification of the effectiveness of
disposal methods can serve as a gauge for the benefits estimation. To
meet this need, we have developed an effectiveness index which provides a
numerical measure of the overall effectiveness (or benefit) of each
disposal method.
4-13
-------
50
40
30
20
10
9
8
7
6
5
Regional Deaths
for 100 years
Nationwide Deaths
for 100 years
o
Q
PI
oo
ON
CO
a
o
•H
g
T3
0)
•H
O
4J
CO
01
Q
C
O
-o
CO
CO
O
u
0)
1
.9
.8
.7
.6
.5
.4
.3
.2
.1
.09
.08
.07
.06
.05
.04
.03
Regional Deaths
for 1000 years
Nationwide Deaths
for 1000 years
.02
.01
None
Specified
60
20
Alternative Radon Emission Standards
Figure 4.1. Incremental Cost per Radon Death Avoided
for Alternative Standards
4-14
-------
The formulation of the effectiveness index depends on (1) the
relative effectiveness of disposal methods in achieving each class of
control; and (2) judgmental weighting factors for each control class. For
each tailings disposal method (see Table 4.3), a rating from zero to ten
is assigned for each of the control classes. The rating corresponds to
the degree of effectiveness of the disposal method in providing the
control; zero represents no effectiveness, while ten stands for 100
percent effectiveness. Independently, each of the control classes must be
assigned a weighting factor. This requires a judgment on the relative
importance of each of the goals of the standards when compared with one
another. After the numerical weights are established, a weighted average
effectiveness index for each disposal method is calculated.
This estimation procedure yields a single measure of the overall
benefit of each disposal method. The remainder of this section explains
in detail how the effectiveness index is calculated and describes the
assumptions upon which it is based.
The disposal methods are rated for their likelihood of effectively
providing each of the classes of control for approximately 1000 years
duration. Due to the long time period, we have relied heavily on our
judgment in developing these ratings. Much of this judgment has already
been discussed in Chapter 3. Although these ratings may be questioned
when viewed in an absolute sense, we feel that they have more validity
when viewed in a relative sense. For example, it is extremely difficult
to estimate how effective a 1-meter earth cover is in preventing misuse
for 1000 years. However, we can be certain that a 3-meter earth cover has
a greater likelihood of preventing misuse than a 1-meter cover. It is in
this relative sense that the effectiveness index is used in this RIA.
Table 4.7 presents the effectiveness ratings for each disposal method
and class of control.
Prevention of Misuse
The basis for the relative rankings of the disposal methods in
providing long-term isolation was discussed in Chapter 3. We feel that a
thick earth cover plus a substantial rock cover or placement below-grade
is necessary to isolate the tailings for 1000 years. Therefore, we rated
the methods with 100-year maintenance of the cover as providing only 10
(for Bl and B2) or 20 percent (for B3) effectiveness since, after the
maintenance stops, the earth cover will not be effective in preventing
misuse over the next 900 years.
The highest rated method was below-grade disposal with the thickest
earth cover (4.3 meters - Alternative D5) assigned a rating of 10. Each
preceding below-grade alternative (D4, D3, and D2) received a rating one
point lower than the succeeding method to reflect the incremental
effectiveness of the cover thickness. Therefore, D4 received a 9, D3 an
8, and D2 a 7 rating. Alternatives Cl through C5 were similarly ranked,
with C5 assigned a rating of 9 since we believe that, for a given cover
4-15
-------
Table 4.7. Effectiveness Index for Control Methods
by Class of Control
Control
Method
A
Bl
B2
B3
Cl
C2
C3
C4
C5
D2
D3
D4
D5
Prevent
Misuse
0
1
1
2
4
6
7
8
9
7
8
9
10
Radon Control
0
1
3
5
4
8
9
10
10
8
9
10
10
Prevent
Spread of
Tailings
0
1
2
3
7
9
10
10
10
10
10
10
10
Water
Protection
0
1
1
2
3
5
6
6
7
5
6
6
7
Weighted
Average 'a)
0
1.0
1.8
3.1
4.3
6.9
7.9
8.6
9.2
7.5
8.3
9.0
9.6
weights for this average are as follows:
I. Prevention of misuse - 40 percent
II. Radon control - 30 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Groundwater protection - 15 percent
4-16
-------
thickness, disposal below-grade will be more effective in preventing
misuse than disposal above-grade with rock cover. Consequently, ratings
of 8, 7, 6, and 4 were assigned to Alternatives C4, C3, C2, and Cl,
respectively.
Radon Control
The effectiveness ratings for radon control for each alternative
are based on the emission limits required by each alternative in
relation to the assumed average radioactivity content of tailings piles
(400 pCi/m^s). These percentage reductions in radon emissions are shown
for each alternative in Table 4.5. Due to the longevity requirement for
Alternatives C and D, we assume that the control of radon emissions will
•be effective for the entire 1000-year period. Therefore, Alternatives C4,
D4, C5, and D5 were rated a 10. Alternatives C3 and D3 were assigned a 9,
while Alternatives C2 and D2 received a rating of 8. Alternative Cl was
rated a 4. For Alternative B, once the maintenance period is over, we
expect that parts of the cover will erode away over time. We assigned
Alternatives Bl, B2, and B3 ratings of 1, 3, and 5, respectively.
Prevention of Surface Spread of Tailings
As discussed in Section 3.2, the spread of tailings by wind,
precipitation and surface water is effectively eliminated by 1 meter of
earth. Also, a 1-meter earth cover reduces external gamma radiation to
background levels, or to levels caused by the radioactive materials in the
cover soil itself. Therefore, disposal methods which are expected to
maintain at least a 1-meter cover for 1000 years were rated either a 9 or
10. Alternative Cl, with a 0.5-meter cover and rock on the slopes, was
assigned a 7. Alternatives Bl, B2, and B3, the active maintenance
methods, were rated 1, 2, and 3, respectively.
Water Protection
Protection of groundwater from contamination by the process fluids
during mill operation is provided by placing a clay or plastic liner
between the tailings and the ground surface. Selection of a disposal site
in clay soils and at a substantial distance from aquifers can also provide
groundwater protection and eliminates the need for a liner. Other methods
include promoting runoff of precipitation and minimizing drainage into a
tailings pile. However, these other methods are highly dependent on the
site characteristics.
After mill operation, groundwater can still be contaminated by
precipitation entering the tailings pile and then reaching the
groundwater. Surface waters may also become contaminated if the runoff
from tailings piles picks up enough hazardous material and reaches bodies
of surface water. We estimate that the potential water contamination
occuring after mill operation is very slight in comparison to the
potential contamination due to the discharge of process fluids.
Nevertheless, a thick earthen cover is required to prevent any additional
water contamination.
4-17
-------
Since we are only concerned in this RIA with water protection after
disposal, the effectiveness ratings are based on the thickness of the
earth cover. For a given cover thickness, we rated Alternatives C and D
equally. Disposal below-grade may maintain the integrity of the earth
cover longer than above-grade disposal, but water has a more.likely chance
of penetrating a pile below-grade than one above-grade which has been
designed for run-off. We have assumed that these factors offset each
other and, therefore, result in the same ratings for each method.
Alternatives C5 and D5 received the highest rating, a 7, while
Alternatives C3, C4, D3, and D4 were rated a 6. Alternatives C2 and D2
were assigned a rating of 5, and Cl received a 3. The active maintenance
methods were rated a 1 (Bl and B2) or a 2 (B3).
Benefit Weighting Factors
The selection of the weighting factors for the classes of controls is
required in order to express a measure of the overall benefit. If all of
the health-related objectives of these standards could be stated on a
quantitative risk basis, then combining the estimation of individual
benefits would be a straight-forward summation of the individual
benefits. However, as stated earlier in this chapter, we cannot express
each of the benefits in health-risk terms. Therefore, we need an
alternative means of combining the benefits.
The benefit weighting factors are a quantitative expression of the
relative importance of each class of control. After considering the
public comment on the proposed standards, we have changed the numerical
weights from those presented in the RIA for the proposed standards. The
new weighting factors are as follows:
I. Prevention of misuse - 40 percent
II. Radon control - 30 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Water protection - 15 percent
Two alternative weighting schemes which are different than the one
displayed above were also devised and are evaluated in the sensitivity
analysis presented in Section 4.4.3.1.
4.4.3 Cost-Effectiveness Analysis
In a broad sense, the purpose in performing a benefit-cost analysis
is to direct the allocation of resources in the most efficient way
possible. In applying benefit-cost analysis to government regulations,
the intent is to ensure that, first, the benefits attributed to the
regulation outweigh the costs, and, second, that the proposed form of the
regulation yields the greatest net benefit when compared to other
regulatory alternatives. Underlying the analysis is the assumption that
the benefits can be expressed on a comparable, monetary basis with the
4-18
-------
costs. In the development of environmental regulations, benefit-cost
analysis is often rejected because this monetization of benefits is not
feasible. In this section, we employ a modified form of benefit-cost
analysis, cost-effectiveness analysis, to determine a level of control for
tailings disposal that represents a reasonable balancing of costs and
benefits. We do not monetize the benefits, but we do quantify the overall
benefit or effectiveness of each disposal method and relate this measure
to the total costs in a systematic manner.
The total cost and effectiveness index for each disposal method is
presented in Table 4.8 for the three model existing tailings piles and the
model new tailings pile. As explained earlier, the liner costs were
excluded from the disposal cost estimates used in this analysis since the
liner requirement is due to the operations standards and is not part of
the tailings disposal system. Similarly, the benefits provided by a liner
during the operational phase of the tailings pond have not been considered
in this cost-effectiveness analysis. We have only considered the
effectiveness of the cover in providing water protection after disposal.
The disposal methods are listed in order of ascending value of the
effectiveness index. These same data are presented graphically in
Figures 4.2 through 4.5.
Upon examining these estimates, it is apparent that some disposal
methods are totally dominated by others in that they have both a lower (or
equal) effectiveness rating and higher cost. Clearly, one would not
select such a method (on the grounds of benefit-cost analysis) when there
are others that would provide greater or equal benefit at lower cost.
Therefore, these methods are eliminated from further consideration. These
methods are represented by the points located below the curves in
Figures 4.2 through 4.5.
In Table 4.8, we have calculated the average and incremental costs of
each disposal method. The average cost is the ratio of the total cost to
the effectiveness index. The incremental cost is the ratio of change in
cost from the preceding method to the change in the effectiveness index.
The incremental cost measure is the cost of the incremental benefit that
each method provides. According to economic theory, we would select the
method in which the marginal cost equals the value of the marginal
benefit. However, as stated above, we cannot make this determination
since the monetary value of the effectiveness index cannot be estimated.
Despite the inability to determine the point where marginal cost equals
marginal benefit, these data can be used to determine a reasonable level
of control.
For the 2 million MT model existing tailings pile, the incremental
cost remains relatively constant from Cl to C2, and then more than doubles
from C2 to C3. Beyond C3, the incremental cost increases by an additional
50 percent. Control methods Bl, B2, and B3 are eliminated from
consideration since they are dominated by Cl. Method C2 is clearly
preferable to Cl, while the estimates indicate a noticeable relative cost
increase beyond C2. This analysis does not shed any light on whether the
cost increases of tighter controls are worth incurring, but rather, it
4-19
-------
Table 4.8. Cost-Effectiveness 'of Control Methods
Control
Method
2 million MT
A
Bl
B2
B3
Cl
C2
C3
C4
C5
7 million MT
A
Bl
B2
B3
Cl
C2
C3
C4
C5
Effectiveness
Index
Existing Pile
0
1.0
1.8
3.1
4.3
6.9
7.9
8.6
9.2
Existing Pile
0
1.0
1.8
3.1
4.3
6.9
7.9
8.6
9.2
22 million MT Existing Pile
A
Bl
B2
B3
Cl
C2
C3
C4
C5
0
1.0
1.8
3.1
4.3
6.9
7.9
8.6
9.2
Total Cost
(10 1983 $)
Average
Cost
Incremental
Cost
0
4.2
6.9
9.2
3.2
5.9
8.3
10.9
13.3
0
6.4
10.4
14.0
6.3
10.5
14.3
18.5
22.2
0
10.8
17.3
23.0
13.6
20.6
26.8
33.8
40.0
Eliminated from consideration
Eliminated from consideration
Eliminated from consideration
.7 .7
.9 1.0
1.1 2.4
1.3 3.7
1.4 4.0
Eliminated from consideration
Eliminated from consideration
Eliminated from consideration
1.5
1.5
1.8
2.2
2.4
1.5
1.6
3.8
6.0
6.2
10.8
10.8
Eliminated from consideration
Eliminated from consideration
0.8
2.7
6.2
10.0
10.3
3.2
3.0
3.4
3.9
4.3
4-20
-------
Table 4.8. Cost-Effectiveness of Control Methods (cont.)
Control
Method
Effectiveness
Index
Total Cost
(10 1983 $)
8.4 million MT New Pile
A
Bl
B2
B3
Cl
C2
D2
C3
D3
C4
D4
C5
D5
0.0
1.0
1.8
3.1
4.3
6.9
7.5
7.9
8.3
8.6
9.0
9.2
9.6
1.3
11.4
15.0
19.0
11.4
16.0
32.3
20.0
35.5
24.3
39.5
28.4
43.1
Average
Cost
Eliminated
Eliminated
Eliminated
2.7
2.3
Eliminated
2.5
Eliminated
2.8
Eliminated
3.1
4.5
Incremental
from
from
from
from
from
from
Cost
consideration
consideration
consideration
2.3
1.8
consideration
4.0
consideration
6.1
consideration
6.8
36.8
4-21
-------
Bl
B2
B3
4 6 8 10
Disposal Cost (Millions of 1983 Dollars)
12
14
Figure 4.2. Cost-Effectiveness of Control Methods
Existing Tailings, 2 Million MT Pile
4-22
-------
0)
•a
c
in 5
to J
01
a
u
a
w 4
Bl
B2
B3
8 12 16 20
Disposal Cost (Millions of 1983 Dollars)
24
Figure 4.3. Cost-Effectiveness of Control Methods
Existing Tailings, 7 Million MT Pile
4-23
-------
C5
6 12 18 24 30
Disposal Cost (Millions of 1983 Dollars)
36
42
Figure 4.4. Cost-Effectiveness of Control Methods
Existing Tailings, 22 Million MT Pile
4-24
-------
D4
D3
D2
D5
12 18 24 30
Disposal Cost (Millions of 1983 Dollars)
36
Figure 4.5. Cost-Effectiveness of Control Methods -
New Tailings, 8.4 Million MT Pile
4-25
-------
points out at what level additional gains in effectiveness start becoming
increasingly more expensive. For the other model piles (both existing and
new), the results are nearly identical - low incremental cost up to C2 and
high incremental cost beyond C2. The changes in incremental cost for each
model tailings pile can be seen more clearly in Figure 4.6 where the
incremental cost for each disposal method is plotted.
This analysis, though, does not address the disposal methods that
existing mills should consider for their future tailings. The regulatory
requirement which determines how existing mills should dispose of their
future tailings is the groundwater protection provision of the proposed
operations standards. In Chapter 5, where we estimate the economic
consequences of alternative disposal methods for existing and new piles,
we address the issue of disposal of future tailings at existing mills from
two extremes. On the one hand, we assume that all existing mills can add
to their existing tailings piles indefinitely and dispose of the entire
pile at one time. On the other hand, we assume that all existing mills
must start new piles immediately with installation of liners. The
industry-wide costs and economic impacts of each of these cases is
estimated in Chapter 5 for alternative levels of control. In reality, the
industry response to the groundwater protection requirement of the
operations standards, regarding the implications for disposal of future
tailings at existing mills, should be somewhere between these two
extremes. In Chapter 6, we present the rationale for the groundwater
protection requirement.
4.4.3.1 Sensitivity Analysis
Alternative Weighting Factors
As discussed in Section 4.4.2, the effectiveness index, and therefore
the cost-effectiveness analysis, depends very heavily on the judgmental
weighting factors for each of the classes of control. In this section, we
perform a sensitivity analysis of these weighting factors. Two
alternative weighting schemes were devised which represent significant
diversions from the original scheme. The effectiveness index was
recalculated for each of these distributions.
Table 4.9 presents the original set of weighting factors (Scheme A)
and the two alternative distributions (Schemes B and C). Relative to
Scheme A, Scheme B represents a substantial shift (25 percentage points)
in relative importance to water protection from the other three control
classes. Scheme C, on the other hand, represents a significant shift
(relative to the original weighting factors) to prevention of misuse (20
percentage points) from the other classes. The effectiveness index
resulting from these different sets of weights is also shown in Table 4.9.
We performed the same cost-effectiveness analysis with the
alternative weighting schemes. The results for the medium-sized model
existing pile and model new pile are displayed in Tables 4.10 and 4.11 for
Schemes B and C, respectively. These estimates exhibit the same
relationship of cost and effectiveness as the original weighting scheme.
4-26
-------
10
o
Q
O
O
Key:
• 2xl06 MT Existing Tailings Pile
7xl06 MT Existing Tailings Pile
22xl06 MT Existing Tailings Pile
• 8.4xl06 MT New Tailings Pile
J
Bl
Cl
C2 C3 C4 C5 D5
A A. A A A
4 6
Effectiveness Index
10
Figure 4.6. Incremental Cost of Alternative Control Methods
4-27
-------
Table 4.9. Sensitivity Analysis of Weighting Factors
for Effectiveness Index
Classes of Control Alternative Weighting Factor Schemes (%)
Misuse
Radon
Surface Spread
Water
Control Methods
Bl
B2
B3
Cl
C2
C3
C4
C5
D2
D3
D4
D5
A
40
30
15
15
A
0.0
1.0
1.8
3.1
4.3
6.3
7.9
8.6
9.2
7.5
8.3
9.0
9.6
B
30
20
10
40
Effectiveness
B
0.0
1.0
1.5
2.7
3.9
6.9
7.3
7.8
8.5
6.7
7.6
8.1
8.8
C
60
20
10
10
Index
C
0.0
1.0
1.5
2.7
4.2
6.6
7.6
8.4
9.1
7.3
8.2
9.0
9.7
4-28
-------
Table 4.10.
Cost-Effectiveness of Control Methods -
Alternative Weighting Scheme B
Control
Method
7 million MT
A
Bl
B2
B3
Cl
C2
C3
C4
C5
8.4 million
A
Bl
B2
B3
Cl
C2
D2
C3
D3
C4
D4
C5
D5
Effectiveness
Index
Existing Pile
0.0
1.0
1.5
2.7
3.9
6.3
7.3
7.8
8.5
MT New Pile
0.0
1.0
1.5
2.7
3.9
6.3
6.7
7.3
7.6
7.8
8.1
8.5
8.8
Total Cost
(10 1983 $)
Average
Cost
Incremental
Cost
0
6.4
10.4
14.0
6.3
10.5
14.3
18.5
22.2
Eliminated from consideration
Eliminated from consideration
Eliminated from consideration
1.6 1.6
1.7 1.8
2.0 3.8
2.4 8.4
2.6 5.3
1.3
11.4
15.0
19.0
11.4
16.0
32.3
20.0
35.5
24.3
39.5
28.4
43.1
Eliminated
Eliminated
Eliminated
2.9
2.5
Eliminated
2.7
Eliminated
3.1
Eliminated
3.1
4.9
from
from
from
from
from
from
consideration
consideration
consideration
2.6
1.9
consideration
4.0
consideration
8.6
consideration
5.6
49.0
4-29
-------
Table 4.11.
Cost-Effectiveness of Control Methods -
Alternative Weighting Scheme C
Control
Method
7 million MT
A
Bl
B2
B3
Cl
C2
C3
C4
C5
8.4 million
A
Bl
B2
B3
Cl
C2
D2
C3
D3
C4
D4
C5
D5
Effectiveness
Index
Existing Pile
0.0
1.0
1.5
2.7
4.2
6.6
7.6
8.4
9.1
MT New Pile
0.0
1.0
1.5
2.7
4.2
6.6
7.3
7.6
8.2
8.4
9.0
9.1
9.7
Total Cost
(10 1983 $)
Average
Cost
Incremental
Cost
0
6.4
10.4
14.0
6.3
10.
14.
18.
.5
.3
.5
22.2
Eliminated from consideration
Eliminated from consideration
Eliminated from consideration
1.5 1.5
1.6 1.8
1.9 3.8
2.2 5.3
2.4 5.3
1.3
11.4
15.0
19.0
11.4
16.0
32.3
20.0
35.5
24.3
39.5
28.4
43.1
Eliminated
Eliminated
Eliminated
2.7
2.4
Eliminated
2.6
Eliminated
2.9
Eliminated
3.1
4.4
from
from
from
from
from
from
consideration
consideration
consideration
2.4
1.9
consideration
4.0
consideration
5.4
consideration
5.9
24.5
4-30
-------
Incremental costs are constant (or even lower) for control method C2,
increase by a factor of 2 for method C3, and double again beyond C3.
Consequently, we conclude that the level of control determined by the
cost-effectiveness analysis is not affected by different weighting factors.
Alternative Time Period of Consideration
Up to this point, we have only been concerned with providing
long-term protection from the hazards associated with uranium mill
tailings. Long-term, in this sense, is assumed to be about 1000 years.
How is this analysis affected if we alter our goal of providing long-term
protection and only concern ourselves with protection for a shorter time
period? This section presents the cost-effectiveness analysis of the same
disposal methods but within the context of protection for a 100-year
period rather than the long-term. The methodology is the same, but the
effectiveness parameters have necessarily assumed different values.
In Table 4.12, we have reassigned effectiveness ratings for each of
the disposal methods to reflect each method's effectiveness in providing
the four classes of control for 100 years. In comparison to the 1000-year
case (Table 4.7), each disposal option has higher (or in some cases, the
same) ratings which shows it is relatively more effective in providing
protection for the shorter period than the longer period. The major
change from the 1000-year case is in methods Bl, B2, and B3, which call
for maintenance of the tailings pile for 100 years, the entire duration of
the time period now under consideration. While these disposal methods
provide little long-term protection, they do provide a substantial amount
of protection for 100 years. Although, by definition, the pile is
maintained for 100 years, this method does not provide 100 percent
protection from misuse since it does not call for continuous policing of
the entire tailings pile against intrusion.
Assuming the original benefit weighting factors, we calculate the
effectiveness index for each disposal method (see the last column of
Table 4.12). We then perform the cost-effectiveness analysis of disposal
methods. Table 4.13 shows the results of this analysis for the 7 million
MT model existing pile and the model new pile. For each of the model
piles, the results indicate that methods C2, C3 and C4 should be
eliminated from further consideration since they are dominated by other
methods. This analysis shows, therefore, that if we are only concerned
with providing protection for 100 years, then the standard should probably
reflect active maintenance controls. For the model existing pile, the
incremental cost decreases to nearly zero going from method Cl to Bl,
increases to a level of $2.1 with method B2, then doubles going to B3.
Beyond B3 the incremental cost skyrockets. For the model new pile, the
incremental cost is reduced by 50 percent going from Bl to B2, then goes
back to the Bl value when you reach method B3. Beyond B3, the cost
similarly increases substantially. The results of this sensitivity
analysis indicate that if controls are only required for 100 years, then
the control levels that warrant further consideration are B2 and B3.
4-31
-------
Table 4.12 Effectiveness Index for Control Methods by Class of Control,
100-Year Protection Case
Control
Method
A
Bl
B2
B3
Cl
C2
C3
C4
C5
D2
D3
D4
D5
Prevent
Misuse
0
8
9
9
5
7
9
9
9
8
10
10
9
Radon Control
0
4
8
10
4
8
10
10
10
8
10
10
10
Prevent
Spread of
Tailings
0
10
10
10
9
10
10
10
10
10
10
10
10
Water
Protection
0
4
6
7
4
6
7
7
8
6
7
7
8
Weighted
Average'3'
0
6.5
8.4
9.2
5.2
7.6
9.2
9.2
9.3
8.0
9.6
9.6
9.7
weights for this average are as follows:
I. Prevention of misuse - 40 percent
II. Radon control - 30 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Water protection - 15 percent
4-32
-------
Table 4.13.
Cost-Effectiveness of Control Methods
100-Year Protection Case
Control
Method
7 million
A
Cl
Bl
C2
B2
B3
C3
C4
C5
Effectiveness
Index
MT existing pile
0.0
5.2
6.5
7.6
8.4
9.2
9.2
9.2
9.3
Total Cost
(10 1983 $)
0
6.3
6.4
10.5
10.4
14.0
14.3
18.5
22.2
Average
Cost
Incremental
Cost
1.2 1.2
1.0 0.1
Eliminated from consideration
1.2 2.1
1.5 4.5
Eliminated from consideration
Eliminated from consideration
2.4 82.0
8.4 million MT new pile
A
Cl
Bl
C2
D2
B2
B3
C3
C4
C5
D3
D4
D5
0.0
5.2
6.5
7.6
8.0
8.4
9.2
9.2
9.2
9.3
9.6
9.6
9.7
1.3
22.9
22.9
27.5
40.4
26.5
30.5
31.5
35.8
39.9
43.6
47.6
51.2
Eliminated
3.5
Eliminated
Eliminated
3.2
3.3
Eliminated
Eliminated
4.3
4.5
Eliminated
5.3
from
from
from
from
from
from
consideration
3.3
consideration
consideration
1.9
3.3
consideration
consideration
94.0
12.3
consideration
76.0
4-33
-------
REFERENCES FOR CHAPTER 4
ERC83 Energy and Resource Consultants, Inc., "Valuing Reductions in
Risk: A Review of the Empirical Estimates," prepared for the
U.S. Environmental Protection Agency, February 1983.
NRC80 U.S. Nuclear Regulatory Commission, Final Generic Environmental
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
4-34
-------
5. Industry Cost and Economic Impact Analysis
5.1 Industry Cost Analysis
5.1.1 Overview
The purpose of this cost analysis is to estimate the industry-wide
cost of mill tailings disposal for alternative combinations of disposal
methods which would implicitly be required for compliance with alternative
tailings disposal standards. The analysis takes into account the mix of
existing tailings, future tailings generated at existing mills, and future
tailings generated at new mills. Each combination of disposal methods
across these three industry categories is referred to as an economic
impact case.
An important limitation of this analysis involves the site-specific
nature of mill tailings disposal. There are many parameters which
influence the selection of a disposal method and its cost of
implementation, the values of which vary from site to site. To accurately
estimate the cost of compliance for each economic impact case would
require an in-depth engineering study of each site. Instead, we have
taken a generic approach in determining likely disposal methods and their
costs. We emphasize that the costs of this analysis were developed to
achieve consistency among the cases to aid in the selection of proposed
standards of general application.
It is important to recognize the differences between these three
industry categories. Existing tailings may require different treatments
than new tailings to achieve a given level of control. In the case of new
tailings (at either an existing or new mill), there is an inherent
advantage to integrating tailings disposal with the waste management
practices of the mill. The range of controls for existing piles are
limited by the realities of the situation, where the quantity,
composition, and shape of the pile must be considered in developing
remedial action programs. For disposal of future tailings, new mills have
an advantage over existing mills since tailings management can be factored
into the decision on locating the mill. There are also important
differences in the financial considerations faced by existing mills and
new mills. Mills with existing tailings have the burden of financing the
disposal of existing tailings in addition to financing the disposal of
future tailings. Also, existing mills generally have fewer remaining
years of plant life over which to finance tailings disposal than new
mills. The additional burden of existing tailings disposal cost and the
relatively less remaining plant lifetime may result in existing mills
experiencing greater economic handicaps than new mills.
5.1.1.1 Formulation of Economic Impact Cases
We developed 25 economic impact cases for the industry cost analysis,
each of which corresponds to one of the 13 alternative standards presented
in the previous chapter. The concordance of alternative standards,
5-1
-------
economic impact cases, and control methods by- industry category is defined
in Table 5.1. We recognize that many other combinations are possible, but
we feel that the 25 cases designated for study are viable from a
regulatory perspective, provide a sufficient degree of variation, and keep
the scope of the analysis manageable in terms of the number of cases to be
considered.
The 25 impact cases fall into two general groups according to the
treatment of future tailings at existing mills. In one set of cases
(1 through 13), this industry category is treated exactly like the
existing tailings category and., thus, the same disposal methods are
assumed for each. In the other set of cases (26 through 37), future
tailings at existing mills are treated the same as future tailings at new
mills. Consequently, for these cases we assume that existing mills will
separate their future tailings from the tailings which already exist and
start new piles. In the first set of cases, this separation of tailings
at existing mills is not required.
The cost for a protective liner is included in the disposal cost
estimates for new piles for every impact case (except Case 1) even though
the liner requirement is not due to the proposed disposal standards, as
explained in Chapter 1. We included the liner cost in this analysis in
order to estimate the complete economic impact related to mill tailings
disposal, regardless of which regulatory provision is responsible for its
use.
5.1.1.2 Estimation Methodology
Three types of model entities were used in this analysis. Model
existing tailings piles and a model new tailings pile (described in
Chapter 4) were developed to estimate the costs of alternative disposal
methods. Model uranium mills were developed to analyze the affordability
of the tailings disposal costs by the mills. Section 5.1.2.2 presents a
summary description of the model mills while an in-depth discussion is
found in Appendix A.
For existing tailings, the cost for each disposal method was
estimated for three models of existing tailings piles. The estimated cost
of disposal for the model existing piles is assumed to apply to each of
the piles in that size group. The summation of these costs yields the
total cost for disposal of the existing tailings inventory. In light of
the aforementioned caveat, we realize that this cost estimation may be
inappropriate for representing the disposal cost of a given pile.
However, for representing the average cost for a group of similiarly-sized
piles, we feel that this methodology is justified in that some sites will
undoubtedly cost more while others cost less.
To estimate the cost of disposal for future tailings, we assume that
mill operators will set aside funds each year to cover the cost of
disposal for the tailings generated in that year. The industry-wide
annual cost of disposal is determined by applying an appropriate unit cost
of disposal ($/MT of tailings) to the units (MT) of tailings generated in
5-2
-------
Table 5.1. Alternative Standards and Control Methods,
by Industry Category and Economic Impact Case
Alternative
Standard
A
Bl
Bl
B2
B2
B3
B3
Cl
Cl
C2
C2
C3
C3
C4
C4
C5
C5
D2
D2
D3
D3
D4
D4
D5
D5
Economic Impact
Case
1
2
26
3
27
4
28
5
29
6
30
7
31
8
32
9
33
10
34
11
35
12
36
13
37
Existing Mills ,
Existing Tailings
-
Bl-E
Bl-E
B2-E
B2-E
B3-E
B3-E
Cl-E
Cl-E
C2-E
C2-E
C3-E
C3-E
C4-E
C4-E
C5-E
C5-E
C2-E
C2-E
C3-E
C3-E
C4-E
C4-E
C5-E
C5-E
Existing Mills ,
Future Tailings
-
Bl-E
Bl-N
B2-E
B2-N
B3-E
B3-N
Cl-E
Cl-N
C2-E
C2-N
C3-E
C3-N
C4-E
C4-N
C5-E
C5-N
C2-E
D2-N
C3-E
D3-N
C4-E
D4-N
C5-E
D5-N
New
Mills
A-N
Bl-N
Bl-N
B2-N
B2-N
B3-N
B3-N
Cl-N
Cl-N
C2-N
C2-N
C3-N
C3-N
C4-N
C4-N
C5-N
C5-N
D2-N
D2-N
D3-N
D3-N
D4-N
D4-N
D5-N
D5-N
5-3
-------
that year. Therefore, the cost of disposal for future tailings is assumed
to occur at the time the funds are collected and not at the time the
disposal activities take place.
We developed a baseline (no EPA standard) projection of uranium
industry activities based on the latest DOE Energy Information
Administration projections. The industry activities projected include
industry demand, annual inventory adjustments, imports, domestic
production by conventional mills segmented by existing and new mills,
domestic production by nonconventional sources, and the annual average
delivered price of l^Og. Appendix B explains the development of these
projections. The industry demand projection is the same for all economic
impact cases. However, we have assumed that the standards may have an
impact on the relative shares of future industry production supplied by
conventional mills, nonconventional sources, and imports. The projection
of annual mill tailings generated at conventional mills, segmented by
existing and new mills, is a function of the amount of existing mill
capacity projected to operate in the future. To determine projected
capacity of existing mills, we have performed a mill closure analysis for
each impact case. This analysis investigates the relationship between the
disposal cost for mill tailings and the mill operator's decision on
whether they can profitably continue production. Since each impact case
results in different disposal cost estimates, the mill closure analysis
was performed for each case. The analysis was conducted for several model
mills and provided an estimate of the existing industry capacity that can
be expected to remain in operation. Appendix A presents an in-depth
description of the mill closure analysis.
In the baseline case, estimates of conventional mill capacity in
operation, on standby due to market conditions, and permanently closed are
made on a yearly basis in relation to the industry demand estimated to be
supplied by the conventional mill sector. New mill capacity is introduced
only after all the capacity on standby has been reopened. Once the
schedule of existing and new mill capacity is established, the annual
production at each is calculated according to their respective yearly.
capacities. In cases where regulatory closures occur, additional (above
the baseline case) standby capacity is reopened to avoid any shortfall in
conventional mill production. However, if the number of regulatory
closures is greater than the standby capacity, then a shortfall in
conventional mill production takes place. This shortfall is assumed to be
met by either additional imports or nonconventional production, either of
which would not result in additional mill tailings being generated.
Additional (above the baseline case) new mill capacity is assumed not to
be added in response to regulatory closures through the year 1989.
However, after 1989, if a shortfall in conventional mill production still
exists, then new mill capacity is assumed to be added. This constraint on
new mill capacity from 1983-1989 recognizes that it takes a certain amount
of lead time before a new mill can become operational. Appendix B
explains this methodology in much more detail and presents the annual
projections of industry production for each impact case, segmented by
existing and new mills.
5-4
-------
For future tailings at new mills, the unit cost of disposal
($/MT of tailings) from the model new pile cost analysis is applied to the
annual projections of industry production at new mills to derive the
annual industry cost of disposal.
The unit cost of disposal of future tailings at existing mills is
derived from both the cost estimations for the three model existing piles
and the model new pile, depending on the individual impact case. If the
case allows existing mills to add future tailings to their existing piles
(Cases 1 through 13), then the unit cost of disposal for the future
tailings is assumed to equal the incremental unit cost of disposal
estimated from the costs of the three model existing piles. If the case
requires existing mills to start new piles for future tailings (Cases 26
through 37), then the unit cost of disposal for existing mills, future
tailings, assumed the same value as that derived for the model new pile.
Once the projections of industry production and the estimations of
unit costs by category have been made, then the calculation of the
aggregate cost of compliance to the uranium milling industry can be
performed. As stated earlier, applying the unit cost of disposal to the
quantity of tailings generated each year provides an estimate of the
annual cost of disposal for future tailings, derived separately for
existing mills and new mills. Since the existing tailings inventory has
been estimated as of the end of 1982, future tailings are defined as the
tailings generated from 1983 through the year 2000.
For existing tailings, we assumed that the entire industry disposal
cost will be incurred over the five-year period, 1983 through 1987. We
allocated the total cost in equal amounts to each of the five years. This
does not mean that disposal activities will necessarily take place during
this time frame, but rather that this is the time over which we assumed
the money to pay for the disposal will be raised.
These calculations result in the development of three categories of
yearly flows of disposal costs from 1983 to 2000: existing mill tailings,
future tailings generated at existing mills, and future tailings generated
at new mills. The yearly flows of industry costs are presented for each
impact case in Appendix C. A present worth analysis of the costs was also
performed for each case. The present worth estimates were calculated for
three alternative discount rates: 10, 5, and 0 percent.
5.1.2 Cost Estimation
Following the procedure explained above, we have estimated the
industry-wide cost of each impact case for each industry category. The
sum of the costs for the three industry categories represents the total
cost for the case. The total cost is expressed in several ways according
to different scenarios for the discount rate.
5-5
-------
5.1.2.1 Existing Tailings
Table 5.2 presents the total disposal cost for the 26 existing
tailings piles. These costs were derived by multiplying the appropriate
model pile cost (from Chapter 4) by the number of piles in that model-size
category. Alternative standards C and D result in the same costs since
the standards require the same controls on existing piles. One
observation from these cost estimates is that alternatives Cl, C2, and C3
cost approximately the same in the aggregate as alternatives Bl, B2, and
B3, even though different control methods were assumed for each. As
stated above, we assume that the costs are to be funded in five equal
increments over the period 1983 to 1987.
5.1.2.2 Future Tailings
For future tailings at both existing and new mills, the annual
industry disposal cost was derived by multiplying the appropriate unit
cost of disposal by the industry production projected for each year.
Table 5.3 presents for each impact case the industry unit cost of disposal
for existing and new mills. These costs are expressed on the basis of
dollars per metric ton of t^Og (converted from unit costs on a
tailings basis) and are applied to the industry l^Og production
estimates presented in Appendix B.
For Cases 2 through 13, the industry unit cost for existing mills is
a weighted average of the incremental unit costs for the three model
existing tailings piles estimated for each control method. The
incremental unit cost for each model existing pile was derived by
estimating the additional cost of adding one million MT of tailings to
each of the piles. This additional cost was estimated by first
calculating the total disposal cost for each control method for a 3, 8,
and 23 million MT pile and then subtracting from these estimates the model
pile costs presented in Chapter 4 for a 2, 7, and 22 million MT pile.
This difference in cost, divided by one million tons, yields the
incremental unit cost for each control method. The same surface area of
the three model tailings impoundments was used for these calculations
since it was assumed that tailings could only be added to existing piles
in a vertical manner without requiring compliance with the primary
groundwater protection standard, that is, placing a liner beneath the
tailings. Horizontal expansion of existing piles would require liners,
the cost of which should approximate the cost for starting new piles,
which was estimated for each alternative disposal standard in Cases 26
through 37. Table 5.4 shows the total cost estimates for the 3, 8, and
23 million MT piles for each economic impact case where tailings are
adding to existing impoundments. The table also shows the incremental
unit cost for each model pile size, as well as the weighted average
incremental unit cost. The weights used were 35 percent for the 2 million
MT pile, 45 percent for the 7 million MT pile, and 20 percent for the
22 million MT pile. These weights represent an estimate of the relative
shares of future tailings at each of the existing pile size categories,
calculated according to the generalized matrix of the 24 existing mills
presented in Table A.I.
5-6
-------
Table 5.2. Total Disposal Cost for Existing Tailings (26 Piles),
By Alternative Standard and Economic Impact Case
(Millions of 1983 Dollars)
Alternative
Standard
A
Bl
B2
B3
Cl
C2
C3
C4
C5
D2
D3
D4
D5
Economic Pile Size: 2
Impact (106 MT)
Case # of Piles: 11
1
2,
3,
4,
5,
6,
7,
8,
9,
10,
11,
12,
13,
26
27
28
29
30
31
32
33
34
35
36
37
-
46
76
101
35
65
91
120
146
65
91
120
146
7
12
-
77
125
168
76
126
172
222
266
126
172
222
266
22
3
-
32
52
69
41
62
80
101
120
62
80
101
120
Total
Cost
-
155
253
338
152
253
343
443
532
253
343
443
532
5-7
-------
Table 5.3. Industry Unit Costs for Disposal of Future Tailings
(1983 dollars)
Alternative
Standard
Economic
Impact
Case
Existing Mills
New Mills
($/MT Tailings)($/MT U308) ($/MT Tailings) ($/MT U308)
Bl
Bl
B2
B2
B3
B3
Cl
Cl
C2
C2
C3
C3
C4
C4
C5
C5
D2
D2
D3
D3
D4
D4
D5
D5
2
26
3
27
4
28
5
29
6
30
7
31
8
32
9
33
10
34
11
35
12
36
13
37
0.09
2.73
0.12
3.15
0.15
3.63
0.37
2.73
0.42
3.27
0.47
3.75
0.52
4.26
0.57
4.75
0.42
4.81
0.47
5.19
0.52
5.67
0.57
6.10
97
2935
129
3386
161
3902
398
2935
452
3515
505
4031
559
4580
613
5106
452
5171
505
5579
559
6096
613
6558
0.15
2.73
2.73
3.15
3.15
3.63
3.63
2.73
2.73
,27
,27
,75
3.
3.
3.
3.75
4.26
4.26
4.75
4.75
4.81
4.81
,19
,19
,67
.67
6.10
6.10
2935
2935
3386
3386
3902
3902
2935
2935
3515
3515
4031
4031
4580
4580
5106
5106
5171
5171
5579
5579
6096
6096
6558
6558
5-8
-------
CO
W)
d
• H
•i-l
CO
f— 1
d
• H
-a
^
o
4J
CO
O CO
0 4-1
d
4-1 CU
•H B
d *o
P g
ft O
CO (X
4J B
C3 J— 1
CU
§60
rj
V*l *H
U 4J
d co
M •!-(
X
M-l W
O
d 4->
0
• H
4-1
CO
>
• H
\-t
01
Q
•
-*
lO
CD
i— 1
f*>
CO
H
4-1
CO <^
O CO
U 00
4J -H
•H i— 1
d
5 en
l-i oo
cj ON
C._i
1 '
t i ^^
4J
CO
O
CJ ^
l-l
co en
CO 00
O ON
CX-H
CO
•MO
O O
i— (
^H ^^
CO
4J
O
H.
U
•H 4-1
B u
O CO
d ex
o B
0 M
U
CO
cu cu
4J 60
J2 W
00 ^
1 ft\
•iH U,/
cu >
d
o
•H
i-t
•H
B
CM
CM
E-1
d
o
•H
l-l
f — [
• H
B
f-
f_|
s
d
0
•H
i-i
•H
B
CM
C_<
^
d
o
• H
i— 1
• i-l
B
cn
CN
E~t
^
rj
o
• l-l
1— 1
• H
e
oo
F— I
33
p.
O
• l-l
r \
• l-l
B
en
cu
CO
CO
o
o*^ CN i/~\ r**- CN r"** CN r^
Of— HI— iro-^^u^u^
^-HCNi— ir^I^-OOCNCN
^^r-Hr-Ht— !•— I^HCNCN
C^ CO lO C7^ <}" CT\ CO 0s*
OI-HI— icO*^*^LOiA
CT>CNvDP^— i
CX
U"^
cu
CO CX
CO O
• i-l CN
£*
4J "O
M C0
0
m •*
0)
"XJ ^^
CU -H
CO f^i
3
cog
Sg
•H -H
CU i-l
IS "-1
• H
cu B
tf]
£H r*^
X1"*!
CO
> —
5-9
-------
For "Cases 26 through 37, the industry unit cost for existing mills is
the same as the industry unit cost for new mills since these cases assume
that future tailings at existing mills will be disposed in the same manner
as future tailings at new mills. The industry unit cost for new mills in
Table 5.3 is the appropriate unit cost for the model new pile (from
Chapter 4). The average unit cost for the model new pile may understate
the actual disposal cost for future tailings for those mills whose future
generation is less than that assumed for the model new pile (8.4 million
MT). The understatement of cost will occur if the economy of scale
relationship that we observe for the existing tailings piles is applicable
to new piles. Since we have assumed one model new pile size, we have only
one data point and, therefore, cannot accurately test for scale
economies. Nevertheless, for.representing an industry average unit
disposal cost, the model new pile cost appears reasonable since some
existing mills will generate more than 8.4 million MT of tailings and,
therefore, partially offset the diseconomy of scale from the mills with
limited future production.
Mill Closure Analysis
We performed a mill closure analysis for each economic impact case
for two purposes. First, we need to examine the economic impact of the
alternative standards on an individual facility basis to determine the
distributional effects. Section 5.2, Economic Impact Analysis, analyzes
this issue. Second, we need to know if the standard will cause any shifts
in how the industry demand will be supplied. Specifically, we need to
know if there will be an effect on the amount of uranium produced at
conventional mills since this determines the quantity of future mill
tailings that need to be disposed. Also, industry production at existing
mills versus new mills may differ by impact case according to the results
of the mill closure analysis. Consequently, the industry cost estimates
may be affected by the results of mill closure analysis.
The mill closure analysis is based on the use of a discounted cash
flow (DCF) technique which indicates whether or not a project is justified
on economic grounds. The DCF analysis compares, on a model mill basis,
the discounted cost of disposal for each case to the discounted cash flow
over the life of the project. We assume that the entire cost of disposal
for both existing and future tailings is absorbed by the mill with no
price pass-through. Considering the disposal costs for both existing and
future tailings may overstate the financial impact if one assumes that the
mills have already assumed the liability for the disposal of existing
tailings. This latter situation appears to be the case since, as part of
the mill's licensing requirements, they must develop a tailings disposal
plan with cost estimates and arrange a financial assurance mechanism which
will cover the cost of disposing of the tailings. However, the tailings
disposal plan developed for licensing may not be in compliance with the
EPA standard. Therefore, the costs for disposal may be higher than the
cost estimates made for licensing. For purposes of estimating the impact
5-10
-------
on future industry production, we have included the cost of both existing
and future tailings in the mill closure calculation. In the economic
impact section, we discuss the effect of only considering future tailings
on mill closures.
The cash flow (pre-tax) for this analysis is defined to be 20 percent
of revenues (15 percent operating profit plus 5 percent depreciation and
depletion). If the discounted cash flow is greater than the discounted
cost of disposal, then we conclude that the model mill will continue
operation. If the reverse is true, then the mill closes. The effects of
varying the cash flow and cost absorption assumptions on the mill closure
analysis are discussed in the sensitivity analysis section of Appendix A.
For the mill closure analysis, model mills are distinguished by three
parameters: capacity of the mill, remaining operating life of the mill,
and the size of existing tailings pile. Three mill capacities (900, 1800,
and 3600 MT ore per day), three operating lives (5, 10 and 15 years), and
three sizes of existing piles (2, 7, and 22 million MT) are assumed.
These assumptions result in 27 (3x3x3) possible model mills for the
analysis. After examining the characteristics of the licensed uranium
mills, we have placed each of them in one of 16 model mill categories. A
separate analysis was performed for each of the 16 model mills and for
each impact case. Table 5.5 summarizes the results of the mill closure
analysis, while Appendix A presents«a detailed description of the
methodology and results of the analysis.
Projections of Industry Production and Disposal Costs
Based on the DOE/EIA projection of industry demand and several
computer runs from DOE's uranium industry model (EUREKA), we have
estimated, year-by-year, the industry uranium production by conventional
mills. This projection, made on an annual basis from 1983 through 2000,
is shown in Table 5.6, accompanied by a projection of delivered uranium
prices. The methodology, which is explained in depth in Appendix B,
considers the following: reduction of inventories, penetration by
imports, domestic production by nonconventional sources, the obsolescence
of existing capacity (permanently retired due to economic reasons), the
industry's annual average capacity utilization rate, premature mill
closings (temporary reductions in capacity due to market conditions),
reopening of mills from standby, and the introduction of new mill
capacity. Based on the new and existing mill capacities and the industry
average capacity utilization rate, annual industry production is
calculated for both new and existing mills. Upon considering the mill
closures (Table 5.5) due to the disposal costs for each case, additional
closures may result which, in order to meet the industry demand, forces
changes in the baseline projection of mills reopening from standby, the
addition of new mill capacity, and the schedule of imports and
nonconventional production. Separate tables for each impact case (or
group of cases resulting in the same number of mill closures) showing the
yearly changes to each of these parameters are also presented in
Appendix B.
5-11
-------
Table 5.5. Summary of Mill Closure Analysis^3)
Economic Impact Model Mill
Case Closures
1-8, 10-12, 26-31, 34 No Closures
9, 13, 32, 33, 35, 36 1 small mill
37 2 small mills
'a'Based on assumptions of 100 percent cost absorption,
20 percent cash flow margin, and includes the disposal
costs for both existing and future tailings.
5-12
-------
Table 5.6. Baseline Projection of Industry Demand,
Production by Conventional Mills,
and Delivered Uranium Price,
1983-2000
Year
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Industry Demand
103 MT UsOg
12.7
15.9
17.1
17.7
16.3
20.0
17.7
18.1
18.4
18.3
19.0
19.7
20.4
20.7
21.3
23.0
25.1
26.9
Conventional Production
103 MT U308
7.5
6.3
7.3
7.8
6.7
7.4
7.6
9.5
9.2
10.2
10.3
10.0
10.5
10.0
9.3
9.7
10.2
11.3
Average Delivered
Price (1983 $ per
pound of 1)303)
29.10
36.59
42.54
68.47
82.87
92.99
92.09
87.84
81.93
74.66
75.24
77.06
79.14
80.39
93.32
89.26
83.86
79.91
Source: Appendix B.
5-13
-------
By applying the industry unit disposal costs (Table 5.3) to the
estimates of production at new and existing mills (Appendix B tables) we
derive the annual disposal cost for future tailings at new and existing
mills. Appendix C presents the yearly flows of these disposal costs,
along with the existing tailings disposal costs, for each impact case.
The cumulative costs for each economic impact case are presented in
Table 5.7.
As Table 5.7 shows, we have made two cost estimates for each
alternative standard. They differ in that the first case assumes that all
future tailings at existing mills are added to existing impoundments,
while the second case assumes' all future tailings at existing mills are
placed in new impoundments. Therefore, we have estimated two possible
outcomes of the same disposal standard. As explained in earlier chapters,
different outcomes of the same disposal standard are possible because of
the groundwater protection standard during operations. When viewed from
the aggregate industry level, the two outcomes estimated in this analysis
are extremes, with the likely outcome falling somewhere between these
extremes.
To determine where between these extremes the most likely outcome
would take place, we would need to know, on an individual site basis,
several things. Regarding tailings management, we need to know the
remaining capacity of existing impoundments, whether or not the
groundwater is contaminated, and, if so, whether or not a corrective
action program can be implemented which would allow additional tailings to
be added to the existing impoundments. Compliance with the groundwater
protection requirements and the development of corrective action programs
involve determinations to be made by the regulatory agencies after the
situation has been monitored. Also, some of the mills currently on
standby may have to dispose of the existing tailings if the mill remains
closed for an extended period and put the tailings from any future
production in new impoundments. Clearly, this information is not
currently available. Even if it were, however, we would then need to make
a projection on the future uranium production and tailings generation for
each existing mill and any new mills which may be started in the future.
While we feel we can make a reasonable projection of overall industry
activity, we are in no position to distribute this projection over
individual facilities.
NRC has estimated that, for their licensed mills in Utah and Wyoming,
about 75 million MT of tailings capacity is remaining. We, thus, believe
that at least 125 million MT of remaining tailings capacity is available
at existing mills industry-wide. In our baseline projection, we estimate
that about 150 million MT of tailings will be generated at existing mills
out of a total of 175 million MT of future tailings. However, assuming,
like we do in impact cases 1 through 13, that all future tailings at
existing mills are placed in existing impoundments may not be likely from
a tailings management perspective even if the existing impoundments can be
modified to accommodate all 150 million tons. This is because our
5-14
-------
Table 5.7. Cumulative Industry Disposal Costs, 1983-2000
(millions of 1983 dollars)
Alternative
Standard
A
Bl
Bl
B2
B2
B3
B3
Cl
Cl
C2
C2
C3
C3
C4
C4
C5
C5
D2
D2
D3
D3
D4
D4
D5
D5
Economic
Impact
Case
1
2
26
3
27
4
28
5
29
6
30
7
31
8
32
9
33
10
34
11
35
12
36
13
37
Industry Costs, Undiscounted
Existing
Tailings
0
155
155
253
253
338
338
152
152
253
253
343
343
443
443
532
532
253
253
343
343
443
443
532
532
Future
Tailings
4
84
474
98
549
114
632
124
474
145
570
165
653
186
744
215
829
184
837
201
906
221
989
252
1065
Total
4
239
629
351
802
452
970
276
626
398
823
508
996
629
1187
747
1361
437
1090
544
1249
664
1432
784
1597
Present Worth
Costs
(10% discount rate)
1
141
319
219
424
288
524
157
316
240
433
314
537
397
651
474
755
249
546
323
644
406
755
483
855
5-15
-------
projection of conventional production is sufficiently low so that the last
increment of standby capacity is not reopened until 1991. It is highly
unlikely that a mill currently closed and reopening eight years later
(perhaps under a different operator) will be allowed to add tailings to
the impoundment existing today. Consequently, even before considering the
impact of compliance with groundwater protection requirements, the amount
of future tailings at existing mills that are placed in existing
impoundments should be less than 100 percent. Regarding groundwater
protection, we noted in Chapter 3 that two mills have already constructed
new lined ponds to alleviate groundwater contamination. As stated above,
we do not know at this time how typical an outcome this will become. For
purposes of estimating the most likely cost associated with each
alternative standard, we have assumed that two-thirds of the future
tailings at existing mills will be placed in existing impoundments and
one-third in new impoundments. This assumption applies uniformly to each
alternative standard. Table 5.8 presents the results of this calculation
for all the alternative standards.
5.2 Economic Impact Analysis
5.2.1 Introduction
The purpose of this section is to present an analysis of the economic
impacts associated with the costs of the various cases. The intent is to
present the methodology for estimating the impacts and the range of
results for all cases. In Chapter 6, we summarize the economic impacts
associated with the proposed standards. For discussion purposes, the
economic impacts are presented at three separate levels: the uranium
industry level, the regional level, and the macroeconomic level. Although
the three levels are presented separately, they are closely interrelated.
There is a significant amount of uncertainty in predicting the future
course of the uranium industry. The initial source of the uncertainty is
the schedule of installed reactor capacity from which the demand for
uranium can be derived. The conditions surrounding this uncertain
forecast were discussed in Chapter 2. Given a reliable uranium demand
scenario, though, it is still highly uncertain how this demand will be
met. Due to lower cost foreign uranium deposits and public utility
commission objectives on the one hand, and potential import restrictions
and utilities' "Buy American" policies on the other hand, we cannot
accurately determine how much of this demand will be provided by foreign
sources versus domestic sources (see Chapter 2). Regarding domestic
production, we do not know for certain how long existing mills will
continue to remain in operation. Mills have closed for a variety of
reasons, including exhaustion of economically-produced ore deposits,
financial problems, and a pessimistic long-run outlook on the uranium
industry by the parent corporation compared to other business ventures.
If we had information on each mill's existing contracts, we might be in a
better position to estimate their remaining lifetimes. However, even this
5-16
-------
Table 5.8. Total Cost of Alternative Standards
(millions of 1983 dollars)
Alternative Total Cost, Present Worth Cost
Standard Undiscounted (10% discount rate)
A 4 1
Bl 369 200
B2 501 287
B3 624 367
Cl 393 210
C2 540 304
C3 671 388
C4 815 482
C5 951 568
D2 654 348
D3 779 430
D4 920 522
D5 1055 607
5-17
-------
information would not be conclusive since some mills with long-term
contracts have still shut down and are honoring their contracts by making
purchases on the spot market from buyers with excess supply. These
uncertainties also prevent us from making an accurate projection of
uranium prices.
The Department of Energy, Energy Information Administration, is the
best source of information within the Federal Government about the future
of the uranium industry. By the use of surveys and quantitative models,
they have made several forecasts of uranium industry activities according
to various scenarios. Based on information obtained from DOE/EIA which
was expressly prepared for this EPA study (see Appendix B), we developed a
projection of the industry which takes into account the working down of
existing excess inventories, imports, retirements of capacity due to
exhaustion of ore deposits, variable capacity utilization rates, premature
closings due to market conditions, and additions of new capacity.
Industry average delivered uranium prices were also projected. These
projections of uranium industry activity are necessary so that we can
measure the economic impacts of the alternative standards. The impacts
estimated in this chapter are intended to show the incremental effects of
tailings disposal and are not intended to be a prediction on what we think
the future of the industry will be like. Based on all these
uncertainties, we do not feel that accurate long-run predictions of the
uranium industry can be made.
5.2.2 Uranium Industry Impacts
5.2.2.1 Production Cost Increases and Potential Price Effects
One method of estimating the economic impact at the uranium industry
level is to examine the percentage increase in production cost represented
by the additional costs of tailings disposal. This cost increase would
vary by individual mill since the production capacity, remaining lifetime,
and size of existing tailings pile each affect the amount of the disposal
cost. On a relative basis, the larger cost increases would result in
those cases represented by small capacity, few years of remaining
lifetime, and large quantities of existing tailings. Table 5.9 shows the
range in percentage production cost increases across the model mills for
each impact case, assuming a base production cost (excluding profit) of
$30 per pound of l^Og. Cost increases for the least impacted model
existing mill vary across impact cases from 0.7 to 11.8 percent. The cost
increase for the most impacted existing mill varies from 10.4 to
45.8 percent. Alternatively, the estimates of cost increases were
arranged to show the range across all cases for each model existing mill,
as presented in Table 5.10. The percentage cost increase is estimated to
range from 2.2 percent to 45.8 percent for a small model mill. For a
medium-sized model mill, the percentage cost increase ranges from
1.2 percent to 18.4 percent. For a large model mill, the percentage cost
increase ranges from 0.7 percent to 26.2 percent. For a model new mill,
the percentage cost increase ranges from 0.3 percent to 10.2 percent.
Appendix A (Tables A-9, A-10, A-llc, and A-12) shows the complete results
for all model mills.
5-18
-------
Table 5.9. Range of Production Cost Increases
across Model Mills by Economic Impact
(percents)
Existing Mills
Alternative
Standard
A
Bl
Bl
B2
B2
B3
B3
Cl
Cl
C2
C2
C3
C3
C4
C4
C5
C5
D2
D2
D3
D3
D4
D4
D5
D5
Economic
Impact
Case
1
2
26
3
27
4
28
5
29
6
30
7
31
8
32
9
33
10
34
11
35
12
36
13
37
Model with
Lowest Production
Cost Increase
0.0
0.7
5.0
1.0
6.1
1.4
7.2
1.2
4.9
1.6
6.2
2.0
7.2
2.4
8.4
2.8
9.5
1.6
8.7
2.0
9.6
2.4
10.7
2.8
11.8
Model with
Highest Production
Cost Increase
0.0
10.4
14.8
16.9
21.9
22.7
28.5
10.8
14.6
17.6
22.3
23.7
29.2
30.5
36.8
36.6
43.5
17.6
24.9
23.7
31.6
3,0.5
39.1
36.6
45.8
New Mills
Production
Cost Increase
0.3
4.5
4.5
5.3
5.3
6.1
6.1
4.5
4.5
5.5
5.5
6.2
6.2
7.1
7.1
7.9
7.9
8.0
8.0
8.7
8.7
9.4
9.4
10.2
10.2
'a'Assumes a base production cost (excluding profit) of
$30 per pound of
5-19
-------
Table 5.10. Range of Production Cost Increases
across Economic Impact Cases by Model Existing
(percents)
Size of Existing Tailings Pile
2 million MT
5 yrs 10 yrs 15 yrs
Small Mill
Low 5.9 3.2 2.2
High 31.5 20.0 16.5
Medium Mill
Low NA 1.7 1.2
High NA 15.1 13.3
Large Mill
Low NA NA 0.7
High NA NA 11.8
7 million MT
5 yrs 10 yrs 15 yrs
10.4 4.9 NA
45.8 26.6 NA
NA 2.5 1.7
NA 18.4 15.5
2.7 1.3 0.9
19.1 14.3 12.8
20 million MT
5 yrs 10 yrs 15 yrs
NA NA NA
NA NA NA
NA NA NA
NA NA NA
4.5 2.2 1.5
26.2 17.6 14.9
(^Assumes a base production cost of $30 per pound of
NA = Not Applicable.
5-20
-------
For some cases and model mills, the production cost increases are
quite large. In light of the depressed condition of the uranium industry
and the threat from foreign competition, it is highly unlikely that all of
the costs of tailings disposal can be passed on to customers. However, it
is possible that part of the control costs could be passed-through in the
form of higher prices since: (1) all of the existing mills and new mills
are subject to control costs (although control costs may vary across the
industry, the industry as a whole should pass-through at least a part of
the control costs), (2) as discussed in Chapter 2, the demand for uranium
is inelastic with respect to price, and (3) a substantial part of 11303
production is purchased under long-term contracts which have cost
escalation clauses, including cost increases due to regulations.
The model existing mill with the lowest cost increase for each case
is a large mill with 15 years remaining lifetime and a small existing
tailings pile. This model mill may be viewed as the industry price
leader, in that existing mills will probably be unable to raise their
prices above those of the least impacted mill and remain competitive.
Alternatively, the cost increase for a new mill may also constrain the
amount of the disposal cost that can be passed on to customers by existing
mills since new mills will only be constructed and operated if they can
cover all the costs of production. Therefore, we feel that the most
likely potential price increase taking place as a result of tailings
disposal will fall within the range of the production cost increases
estimated for the least impacted model existing mill and the model new
mill. This most likely price increase range is indicated for each impact
case from the production cost estimates in Table 5.9.
In cases where there are large increases in production costs, the
competitiveness of the domestic industry with respect to foreign industry
could be reduced and thereby lead to increased imports. Also, in the case
of significant differential cost increases for small mills, this could
lead to shifts in the size distribution of the industry away from smaller
mills toward larger mills.
5.2.2.2 Mill Closures
For those cases where the production cost increases are substantial,
part or all of the disposal costs may have to be absorbed by the mills.
This could lead to closures of some mills. Assuming the conditions of a
medium cash flow margin (20 percent) and no pass-through of the control
costs, the number of mill closures may range from zero to two small model
mills for Case 37 (see Table 5.5). Appendix A presents the complete mill
closure results and includes variations in the cash flow margin and price
pass-through assumptions.
In addition to the no pass-through scenario, we have analyzed the
effects of two different levels of price pass-through on the mill closure
analysis, a one dollar and a two dollar per pound increase in the price of
11303. These limited pass-throughs of the disposal cost represent
5-21
-------
increases of 3.3 to 6.6 percent, assuming a base yellowcake price of
$30 per pound. These price increases approximate the range in the
production cost increases estimated for the least impacted model existing
mill and the model new mill, as shown in Table 5.9. Therefore, these
pass-through levels are reasonable representations of the average industry
response to the requirements of the impact cases.
For the six cases which result in one small model mill closure under
conditions of no pass-through and a 20 percent cash flow margin, a $1 per
pound pass-through will eliminate the closure for one of the cases, while
the $2 per pound pass-through will eliminate the closure for three more
cases. For Case 37, the two small mill closures under no pass-through and
a 20 percent cash flow margin are reduced to one closure with either a $1
or $2 per pound pass-through.
As discussed earlier in this chapter, mills must develop tailings
disposal plans as part of their licensing requirements. They must also
implement a financial assurance mechanism whereby funds will be available
for tailings disposal in the event that a mill closes prematurely. One
can reasonably assume, then, that the mills have already assumed the
financial liability for the tailings which have accumulated to date. The
costs for existing tailings can be viewed as a fixed cost of production,
to be paid regardless of whether a mill continues operating or not. The
decision to continue operating in the future may, therefore, be based on
the incremental cost of disposal of future tailings only. If a mill's
future cash flow can cover the variable cost of production, including the
incremental cost of future tailings disposal, then we would expect the
mill to continue operating or at least not close for tailings-related
reasons. We alternatively performed the mill closure analysis by zeroing
out the cost for existing tailings and only including the cost of future
tailings in the closure calculation. The results of this estimation
indicate that none of the model mills would close. Further discussion of
the mill closure issue is presented in Chapter 6 where the economic impact
of the standard is described.
5.2.2.3 Methods of Raising Capital
In some cases the disposal costs involve considerable sums of money.
This may require firms in the industry to raise additional capital in
order to meet these costs. Most of the firms in the industry are large
corporations that will have access to a wide variety of financing
alternatives and capital markets. Raising capital for pollution control
expenditures is similar to raising capital for other expenditure programs;
therefore, standard procedures for raising capital are applicable.
Examples are the sale of common stock, corporate bonds, and commercial
paper, or the firm can seek commercial bank loans. In some cases, the
firms may be able to finance control expenditures with retained earnings.
5-22
-------
5.2.2.4 Ability to Raise Capital
The ability to raise capital is dependent upon a firm's current and
projected financial condition. If a firm is considering an investment
that is projected to be profitable and it has a good credit rating based
on past performance, capital generally will be available. Undoubtedly,
some firms will find it easier to raise capital than will others. If an
investment is not projected to be profitable, then there is no economic
incentive to raise capital, even though the firm may have the ability to
do so.
The financial condition of a firm can be assessed through a
combination of factors. They include sales, profitability, liquidity, and
leverage. Table 5.11 shows the sales for most of the existing firms in
the industry. Sales are shown for the total company and the business
segment within the company that includes the milling of uranium. The
percentage of the company's total sales provided by the uranium milling
segment is also shown. In some cases the uranium milling segment may also
include other products. A company's total sales is one indicator of a
company's ability to raise capital because larger companies are likely to
have access to a broader range of methods to raise capital than smaller
companies. The dollar volume of sales by the segment that includes
uranium milling, together with the percentage of the company's total sales
that are provided by this segment, are additional indicators of a firm's
ability to raise capital. For example, if the uranium market is depressed
and a firm depends on uranium milling for a high proportion of its
business, then such a firm is more likely to experience difficulty in
raising capital than another firm that is less dependent on uranium
milling. In approximate terms, Table 5.11 suggests that, based on sales,
there are two groups in the industry. One group has sales that are many
billions of dollars, with a small percentage of those sales provided by
uranium milling. The second group has sales that are considerably less
than the first group and are relatively more dependent on uranium milling.
Another important measure of a firm's ability to raise capital is its
debt in relation to its total capitalization, which is called leverage.
If a firm has a high percentage of debt to total capitalization, then the
firm has little leverage and is probably less able to raise new capital
than is a firm with higher leverage. One method providing insight into a
firm's ability to raise capital to pay for disposal costs is to estimate
the change in a firm's long-term debt to total capitalization percentage
that would result from these disposal costs, assuming that the cost is
financed totally with debt.
We performed a capital availability analysis for the individual
companies in the uranium industry. The computation of the debt
capitalization ratios, before and after control costs, forms the basis of
this analysis. The difference in these ratios is an indication of the
degree of difficulty each company might have in obtaining the necessary
capital for tailings disposal. The companies are grouped according to
their degree of difficulty, based on appropriate cutoff points. The
analysis is explained below.
5-23
-------
p^
JJ
CO
3
c
n
§
c
CO
u
S3
d)
.c
4->
•si
S-
-H^
g'g
(X E
J-5
g£
U-*
CD
(V
,— 1
CO
CO
.
"~
in
OJ
t~*
,O
rt
4
(D
CO
to
o
EC
CO
U
• H
4J 0
4-< 0-1
rK P
4-1
(U
W
f-i CD
CO O
4) 3
•0 0
0) V.
&
C
o
X
X
W
O
CJ
C
0
U
CO
CO
f— 4
iJ
<
•o
0 !-<
4J -H
e M-i
4J -i-4
<: &
a
CO )-<
nl
U r-l
QJ 0
II
J-i
CO
Ol
co oo m co \c o^<3- OO CO CN CN
•-H CM co CN «-H
o o o o o o
00 •— i Is- CN CN I-H
u"i CN co m •— i
p~ ' i -
vT1 LO ^ O 00 O
c^ m <$• csi to •
00 u"1 -^ cxt O *— i
co ro co m CN v
v£> 00 O —< O
.-H •— 1 — 1
oo c^ co P-* m o
CO vD lO CO O «-H
en r*. i/~» o CJN
*i) ^i CN w» v
CN vD I OQ CJ
i— lOiAvo^o OOCN coc-imooc^
•-H CN OO CO
00 O\ O <— 1 CN OO O O •— i CN CO CK O •— 1 CN
p^r-cococo r-r^-oooooo r-r^oooooo
ON O*> Cy\ CTv ON O'v C^ C^ C^ ^ ON O^ O^i C^ ON
CO CO
j_i -,
to 5o > >
D- E ^
3 5 3 C 5 C
^ C -H C to > M cd 6
O
O -i-i
C )-<
CJ
z
&
T3
m n n
•O -H
C r-1 JS
4-1 0
en
r^
•c c
CO O 1-1 VJ
T3 -H >
C l-H .— 1 01
4-1 O U O
CO v^
o
cxO
(—1
<
o
• H
ca
iJ
Ol
Phelps
Dodge
(Western
Nuclear) Pione
4J
C ^^
g i
I CO
0) O
z ^-
^ o
or*-ooo cor^-uor— IT-H i^jCNvoor--
f^^H^^HvO muOCNOOOC' CNCNCNfOcO
mrvoooNr- ^H t— i CN CN CM
CO
omovor^ oocNoocN 00 CO O f^-
--icyNcO'-<
r^.oor^.cNr^ < — i^cooio
OvD >
cx a) QJ eu
§CO Pi Prf
to to
U N
3 33 C 3 C
i— ( C -H f3 CO > J-4 CO g
O 0) l-i
-------
The starting point in the calculations begins with the no-control
cost situation. The financial data used for this analysis is for the
entire company, not just a subsidiary or a segment of the firm involved in
the uranium business. By considering the resources of the entire company,
a more realistic appraisal of the ability to raise capital is possible
because the total financial resources of the firm can be used to secure
credit. The parent corporation for each uranium mill is listed in
Appendix D. The debt ratio is calculated for each company by dividing
long term debt by its total capitalization (sum of long term debt and
shareholders equity). This result represents the debt ratio before
control costs. These ratios for 1982 are presented for each company in
the first column of Table 5.12. An example of the calculation is as
follows: The Atlantic Richfield Company (ARCO) shows long term debt of
$3,500.8 million in 1982 and shareholders equity of $9,868.3 million.
Total capitalization is, therefore, $13,369.1 million. The debt ratio is
26.2 percent ($3,500.8 million divided by $13,369.1 million).
In order to estimate the impact of control costs for a specific firm,
two assumptions were made. First, the control costs that are used are the
existing tailings costs associated with the model mills - they are not
firm specific. The costs for each firm are those model pile costs that
are applicable for the particular size of the tailings pile which we have
estimated for each mill. Table A-3 in Appendix A lists the existing mills
by the size of the tailings pile. Second, we assumed that the control
costs occur entirely in a single year.
The control costs to be considered in this analysis are those
associated with control methods C3 and C5. Method C5 is the most
expensive control technique for existing tailings piles and represents a
"worst case" scenario. These model pile costs (millions of 1983 dollars)
are as follows:
Tailings Pile Size
Control Method
C3
C.5
2 (10 MT)
8.3
13.3
7 (10 MT)
14.3
22.2
22 (10 MT)
26.8
40.2
In order to compute the debt ratio after control costs, the
costs of control must be added to both the debt amount and to total
capitalization. As an example, for ARCO, using the controls associated
with C3, it can be seen from Table A-3 that the Anaconda (a subsidiary of
ARCO) pile is of the 22 million metric ton size and has control costs of
$26.8 million. This amount is then added to the debt amount of
$3,500.8 million, resulting in $3,527.6 million. The total capitalization
is now $26.8 million plus $13,369.1 or $13,395.9 million. Dividing
$3,527.6 million by $13,395.9 million results in 26.3 percent, or an
5-25
-------
rt
w*
Q
*H
it
(0
N
*Jl!
CO
4J
tfj
rt co
FT
0 0)
_, rH
^0 %H
4J ^
•° id
«3
0 Cfl
H
" M
.3 c
W -H
S. V
J? n
^0 >H
* u
3 13
rH ^
*•* o
fX **^
rH 4"J
CJ W
prf
.
CM
^
in
01
^^
CO
H
ui
CO
o
CJ
rH
0
t-l
4J
C
o
CJ
M
a)
^J
<
CO
^ 1
CO
0
CJ
rH
O
t-l
d
o
o
0)
p
o
01
PQ
CO
C rH
•H O O
•H P
4) 4-1 4-1
^ co W C
^O Q] p^ O
^/ CU CJ
P 4-1
O X> rC
C 0) 4-1
M O -r-l
C
0
rH »rH
CO 4-J
4J CO
O N in
—•v. r - t *^
in -^. I-H
^^ 4-1 ca t-i
,04-10
Q) T-I MH
0 CX
CO
CJ
CO
C rH
•H O O
•H rJ
CU 4-1 J~>
^ CO crj C
•^> O) CJ
r-l 4-1
0 Xi ,C
C CU 4-1
M O .H
B
O
rH *iH
CO 4-1
4-1 CO
O N en
en — . rH
s-> 4J Cd l-(
42 4-1 O
0) 0> -H
•^ ^^ (1^1
CO
CJ
d
o
rH -H
CO 4-1
4J CO
O N CM
*^^ EH »H CO
i— 1 ^ rH ON
\^ 4J CO i-H
43 4-1
0) -H
O CX
CO
CJ
y*V
»— 1
\^/
I
in
««-^
,—^
in
CJ
^,
4J
0)
}_(
Ol
(X
N— '
s~^
»H
s-x
1
^^
^-v
en
O
^^
4-1
d
o
IJ
0)
P-I
X-N
4J
B
CJ
p4
0)
£j
^•^
4-1
d
o
r^
O)
pi |
^
•
CX
o
o
•o
41
4-1
CO
T3
•H
rH
0
(0
d
o
o
CS
0
•*
vD
CM
rH
O
en
vO
CM
ON
CO
CM
CM
vO
CM
0
CJ
TJ
1— 1
01
• H
14-1
£.
o
• H
C^4
0
• H
4J
d
CO
rH
4-1
r** rH rH VO 1^
cn o o —i o c
CM
r- cn m i— i <)• vo
en r^ -^ o CM *^
CM en in in I-H
f^ i-H rH O *d"
vO O O -H O O
i — i
r» en in in d~ in i — i
CM - M » 4J
co 41 o o) d d
CO 13 43 CJ 0) O O
CO d CJ O d E E
rH CO v_/ d O E 5
4J 4-J O -H O 4)
-------
cd
N
*f":
^ i
*£.
o
*J -H 0
" U **— '
*"j
_o ^
«E
P
•H **"'
cO
£ *
•*• o
14H
2 M
•H .
*jr 4J
°3
.
CN
"1
.
XI
cd
H
4J
co
0
u
^H
o
IH
4J
e
o
CJ
0)
14H
•<
co
4-1
0
O
r-H
O
tH
4J
C
o
CJ
01
tH
o
U-l
Ol
to
00
C I-H ^
•H O O --I
• r-l )H ^->-
01 4-1 4-1 |
^^ oo f s~.
C o) 4-1 m
M O 'H CJ
O
CO 4J /-N
4J CO 4-1
o to in (3
in ^ I-H o
^ 4J Cd IH l-l
XI 4-1 O O)
0) .H MH PH
O CX ^
o
co
£ t— 4 ^^
•H O O ^H
• H IH ^
0) 4-1 4J |
/-v (0 0) C /-N
C5 S ^ u ^
IH 4-1
0 fl f, r*.
C 01 *-" «O
l-l (D >H 0
3 ^-^
c
0
l-l •!-(
Cd 4-1 x-v
4-1 W 4J
O N CO C
/*"^ F i ', \ C_3 OJ
CO ~~. I-H O
v — 4J CO IH IH
XI 4J O 01
01 *iH (IH PH
P 0. v^
cd
0
C
o
^ i-H -H
•-H Cfl 4J x-v
v^ 4J CO 4J
Ol O N C
^~- 60 H -i-l 01 "i-l PH
^C C5 O i N— s
cfl
0
C
0
1-1 -1-1
CO 4J /-v
4-1 Cfl 4-1
O N CN C
-— r . | /v» M)
s~^ t"1 "iH CO V
i— I ~-> i— 1 ON O
v_> 4J Cd •— I IH
XI 4J Ol
01 .H PH
o a ^
CO
0
•
Ct
IH
O
U
*o
01
4J
cd
•a
• H
i— 1
O
co
C
O
0
•-H m CN
O 1-1 O
ON vO "-H
ON CO O
•-H CN
-H ON «t
o o oo
CO
ON O VD
ON CO *— I
•-H CN CO
/•**
CO
\^s
ON -H CO
O 00 00
i-H »-H CO
00 i-H CO
ON CM OO
•— 1 CN CO
•
a
13 IH
01 O
4-1 U
•H
• 6 <->
O -rH -iH
O i-J MH
• H
§fj
CO
O 60 PH
i-H
>N <1 C
4-1 0
4-1 O -iH
01 -rH C
O pj D
i-H
o
CN
00
»H^
i-H
O
CN
00
o-
ON
00
•*
i-H
00
<}•
.
o
CJ
C
o
CO
•H
•o
W
•
14-1
•H
i-H
cd
O
C
IH
01
Xi
4-1
3
O
W
i-H
O
V40
ex
IH In
01 O
CO CJ
CU
01
CN
d
CN
CN
CO
1—4
O
1— 1
CN
CO
VD
ON
CN
O
CM
CO
•
ex,
j_(
0
a
01
*o
• H
Xi
IH
Cd
CJ
C
O
•H
C
o
r» r-
CN O
CN CO
in .-H
*Hf «H^
r-^ in
** o
CM ^H
N
CU
>
«H
ca
CO
4-1
p
Ol
CO
01
IH
a.
Ol
IH
O
•H
4-1
CO
IH
01
60
CO
IH
01
CO
01
XI
H
,•— V
i-H
" —
.
i-H
OO
ON
i— I
P
• H
O
u
o
P
o
CJ
T3
01
^t
• H
3
cr
u
cd
,p
o
• iH
Xi
3
4J
P
O
a.
3
O
IH
O
MH
CN
oo
ON
i-H
P
CO
•— i
00
1 — 1
CO
IH
Cfl
OJ
^
CU
4J
p
O
MH
CO
•iH
0
•rH
4-1
CO
IH
4J
fN
01
•o
0)
60
cd
rH
0)
^
CO
01
X!
H
CN
— '
•
CN
00
ON
r-H
0
4-1
ON
j^
ON
i-H
Q
tH
14H
T3
o
• rH
Ol
cx
^
cd
o>
^
IH
3
O
<4H
01
4-1
CO
4J
P
01
CO
01
IH
cx
Ol
14
Ol
60
cfl
IH
Ol
^
CO
01
H
CO
1 —
5-27
-------
increase of 0.1 percent in the no-control debt ratio. In this particular
case, because AROO is such a large company, the addition of the control
costs causes a very small impact on ARCO's debt level. The results of
these calculations are shown in column (3) of Table 5.12 while column (5)
presents the debt ratios using C5 as the basis for control. Three
companies, Union Carbide, Exxon, and Western Nuclear (Phelps Dodge), each
have two mills, so the appropriate control costs are summed for the two
mills and then added to the no-control values. For mills that are
jointly-owned by two companies, the control costs were split equally and
assigned to each company.
The results of these calculations can be better understood by
examining the change in the ratios due to tailings disposal costs. These
differences are shown in columns (4) and (6) as percentage point changes.
It is also helpful to compute an average debt ratio over a period of
five years in order to eliminate the effect of an unusually low or high
value for any given year. Such an unusual value does represent the
financial situation of a firm for that particular year, but may not
represent the norm. An average value smooths out these aberrations, the
results of which are shown in column (2).
After examining the results of Table 5.12, it is possible to divide
the companies into three groups, according to the degree of difficulty
that they would have in obtaining capital. The first group consists of
those firms who would experience little or no difficulty in obtaining the
necessary capital. Their debt ratios increase by less than five
percentage points, and their debt ratios with controls are below
40 percent. The second group of companies may have some difficulty in
raising the required capital as their debt ratios increase significantly
in either absolute amounts or compared to historical levels. The firms in
the third group are having financial problems and would probably be unable
to raise the necessary capital. This grouping of companies is shown in
Table 5.13.
The cutoff points of a five percentage point difference in the debt
ratio and the 40 percent debt ratio level have been derived by examining
the financial data of the firms in the industry over the last five years.
It is evident that for most firms in the industry the debt ratios are
below 40 percent and the addition of control costs causes the debt ratio
to increase by less than five percentage points. A historical review of
the financial data shows that changes of about five percentage points are
not uncommon. Those firms that exceed these limits generally do so to a
great degree so that this cutoff point appears to clearly divide the firms
according to impact.
The majority of the companies fall into the first group, with minimal
or no impact as a result of either disposal method. These companies are
for the most part very large diversified firms. The increase in the debt
ratio with controls (either C3 or C5) is readily manageable, generally
less than five percentage points. The debt ratios for these firms do not
5-28
-------
Table 5.13. Capital Availability Analysis: Grouping of Firms
by Degree of Capital Availability Problems
(percentage points)^a)
GROUP 1; Minimal or No Impact in
Meeting either C3 or C5
Increase in
Debt Ratio with
Controls (C3)
Increase in
Debt Ratio with
Controls (C5)
Commonwealth Edison
Standard Oil Co. (Ohio)
Standard Oil of Cal. (Chevron)
Exxon Corp.
Getty Oil Co.
Southern Calif. Edison Corp.
Conoco, Inc.
Union Pacific Corp.
Atlantic Richfield Co.
General Electric Co.
Newmont Mining Corp.
Union Carbide Corp.
Rio Algom Limited
Phelps Dodge
Kerr-McGee Corp.
Pioneer Corp.
UNC Resources
0
.1
.1
.1
.1
.1
.1
.4
.1
.9
.5
.8
1.0
1.7
0.1
.1
.1
.1
.1
.1
.2
.2
.1
.7
.2
1.5
.7
1.1
1.6
2.7
GROUP 2; Some Difficulty in Meeting
C3 and Significant Problems
in Meeting C5
Atlas Corp.
Homestake Mining
16.7
7.3
23.7
10.5
GROUP 3: Significant Problems in
Meeting Either C3 or C5
American Nuclear Corp.
Reserve Oil & Minerals Corp.
Federal Resources Corp.
14.9
75.5
67.3
19.5
83.1
71.0
(^Percentage point changes are taken from Table 5.12.
- = negligible impact (below .1 percentage points).
5-29
-------
exceed 40 percent in either case, a level generally considered to be
reasonable. The two utility companies, Commonwealth Edison and Southern
California Edison, have ratios that exceed 40 percent before controls.
However, because utility companies have a stable revenue stream, they are
able to incur relatively high levels of debt. Therefore, these debt
ratios can be considered as typical of their industry.
The two companies in Group 2 may have difficulty in obtaining the
necessary capital. Homestake Mining Co. has had a strong profitability
record during the past five years, and they have used almost no long term
debt. Their highest debt ratio was in 1982 and it was extremely small,
1.6 percent. They have a large tailings pile which would result in debt
ratios of 8.9 percent for C3 and 12.1 percent for C5. The Atlas
Corporation presents a similar situation. Their debt ratio changes from a
no-control ratio of 0 percent to 16.7 percent with C3, and 23.7 percent
with C5. Both of these debt levels represent a large increase. Although
the debt ratios for the two companies are roughly the same as, or below,
many companies in the industry, for a company that has historically
preferred to carry very little debt, the financial community may hesitate
to extend this level of debt. However, an examination of their financial
statements shows that a significant portion of the control costs could be
financed with retained earnings, which would reduce their need for
external financial markets. It should also be noted that Homestake1s
major activity is gold production. Therefore, their financial health
rests mainly on the status of the gold market. Assuming that the
company's financial outlook remains good, by using a combination of
retained earnings and debt, they should be able to obtain the necessary
capital.
The last group, Group 3, consists of three companies, all of which
are experiencing financial difficulties even in the absence of control
costs. Their financial difficulties are made worse by the addition of
control costs. These companies, American Nuclear, Federal Resources, and
Reserve Oil and Minerals, derive their major source of revenues from the
production of uranium and have been directly affected by the declining
uranium market. Federal Resources and American Nuclear, partners in the
Gas Hills, Wyoming, mill, have experienced net losses during fiscal 1982
(Federal Resources had a net loss in 1981 as well) and both had declines
in sales from the previous year. Reserve Oil and Minerals Corp. has had
net operating losses for four consecutive fiscal years, 1979 through
1982. During fiscal year 1981 they also had negative net worth. Reserve
Oil is a partner with the Standard Oil Company of Ohio in the Seboyeta,
New Mexico, mill. For all three companies, the impact of control costs
results in excessively high debt ratios as shown in Table 5.12. These
companies are in such poor financial health that any significant amount of
external financing is not feasible, and financing by retained earnings is
also impossible.
5-30
-------
5.2.3 Regional Impact
In Chapter 2, we stated that uranium mining and milling occurs in the
western States of Colorado, New Mexico, Texas, South Dakota, Utah,
Washington, and Wyoming. Therefore, the economic impact of controls will
be concentrated in western United States. The economic impacts associated
with a mill closure depend on the characteristics of the site and the
region where the mill is located. In our generic analysis, we have not
identified specific mills that are subject to potential closure due to the
EPA standards. Consequently, it is impossible to accurately estimate the
extent of the impacts that could arise. Nevertheless, we analyzed the
regional impact by using a model region. We assumed a model region that
is characteristic of the regions where the mills are located. The model
region is likely to differ, in some characteristics, from any specific
actual region. The boundary defining the area receiving the majority of
the potential economic impact is an 80 kilometer (50 mile) radius around
the mill. Table 5.14 describes the population characteristics of the
model region, broken down into two subregions - a circular inner subregion
with a 40 kilometer radius around the mill, and an outer ring from 40 to
80 kilometers around the mill. Table 5.15 describes the assumed economic
characteristics of the region. The regional impact estimation procedure
assumes that mill closures due to control costs are permanent, although,
as described in Appendix B, there are some mills that may close
temporarily based on market conditions and then reopen when market
conditions improve.
If mill closures occur, the potential impacts include reduced
employment, reduced tax receipts, and reduced property values. The
effects of a mill closure go beyond the loss of employment at the mill and
the revenues of the mill, for they have repercussions on the economy of
the region. The total economic impact of mill closures on a region is
composed of three effects: direct, indirect, and induced effects. The
direct effects include the employment at the mill, the revenue of the
mill, and the taxes paid by the mill. The indirect effects are the
reduced expenditures by other businesses for materials used in the
production process. The induced effects are reduced expenditures made by
all households for final goods and services, which reduces the level of
commerce in the entire region, and to a minor extent, commerce outside the
region.
The direct effects of any particular impact case can be estimated by
reviewing the number of model mill closures associated with the case and
summing the effects for each closure. For example, if lost employment due
to model mill closures is of interest, and three model mills are projected
to close, then the direct loss of employment is simply the sum of the
employment for the three model mills. The total employment effect
(direct, indirect, and induced) can be estimated by applying a multiplier
to the direct effect. Multipliers are developed for estimating the total
5-31
-------
Table 5.14. Demographics of the Model Uranium Mining and Milling Region
Distance from Area
Mill (Km) (Km2)
Inner Subregion
Outer Subregion
Total Region
0-40 5
40-80 15
0-80 20
Source: U.S. Nuclear Regulatory
,000
,000
,000
Population % Increase Current
1960 1976 1960-1976 Labor
1,920 2,200
47,560 55,100
49,480 57,300
Commission, Final Generic
15
16
16 20,
Envi ronment al
Force
-
-
800
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
5-32
-------
Table 5.15. Economic Characteristics of the Model Region
Industrial Sector
Manufacturing
Wholesale and Retail
Trade
Government
Services
Transportation and
Public Utilities
Finance, Insurance,
Real Estate
Contract Construction
Mining
Agriculture
Total
'a'Source: U.S. Nuclear
Environmental Impact
% Employed
By Sector^9)
5.0
18.7
21.8
13.1
7.5
3.0
8.8
11.2
10.9
100.0
Sector
Sector Payroll (b)
Employment (million 1982 $)
1,040
3,890
4,534
2,725
1,560
624
1,830
2,330
2,267
20,800
18.39
51.20
60.32
38.66
33.06
8.68
43.43
52.44
43.84
350.02
Regulatory Commission, Final Generic
Statement on Uranium
Milling, NUREG-0706
>
September 1980. The original NRC distribution was adjusted to include
agriculture.
payroll equals average wage in sector times sector employment.
Average wage was obtained from U.S. Department of Commerce, Bureau of
the Census, Statistical Abstract of the United States, 1982.
5-33
-------
economic impact on a region resulting from a change in income or
employment in a specific industry. The values assumed for a multiplier
may change according to the characteristics of the region and the industry
investigated. A multiplier of 2.21 is used to represent the total impact
on employment and 1.97 to represent the total impact on payroll earnings
in the Western United States(EMJ81).
The impacts on employment and payroll in the model region are
presented in Table 5.16. The direct impacts on employment resulting from
a mill closure range from a decrease of 70 employees for a small model
mill to 280 employees for a large model mill. Total employment impacts
range between 155 and 619 employees resulting from the closure of a small
or large model mill, respectively. Because of the relatively small size
of the work force in the model region, the unemployment rate will be
impacted significantly, with a range of increases in the rate from 0.7 to
2.9 percent, depending on the size of the model mill closure.
The total impact on the region's payroll ranges between $3.2 million
and $12.5 million, depending upon the size of the model mill. In relative
terms, the impact on the region's payroll is larger than the impact on the
region's work force, ranging from a decrease of 1.1 to 4.3 percent. This
larger impact on the area's payroll is due to the larger than average
wages and salaries received by the employees in the uranium mining and
milling industry.
Additional short-run impacts on the region would include reduced tax
receipts, reduced property values, and reduced personal income. However,
over the long-run, these short-run problems should be mitigated as the
regional economy adjusts to the mill closures and returns to equilibrium.
Long-run transition mechanisms that restore equilibrium include the
mobility of the work force and the influx of new industry.
5.2.4 Macroeconomic Impact
The impacts discussed in previous sections are also applicable at the
macroeconomic level. However, most of these effects may be difficult, or
even impossible, to discern. For example, even if the potential
employment losses may be significant for the uranium industry and
significant for a particular region under some cases, the effect on the
national unemployment rate is not likely to be perceptible. One potential
impact that could be discernible at the national level is imports of
ur ani urn.
For the most costly impact case (Case 37), we estimate that two small
model mills may close. These model mills represent about 600 MT of annual
U30g capacity. In our industry simulation methodology (Appendix B
analysis), we assume that in response to closures due to tailings
disposal, capacity from standby is reopened to avoid a shortfall in
conventional mill production. In our baseline projection, we estimate
5-34
-------
Table 5.16. Direct, Indirect, and Induced Impacts on the Model Region
Resulting from a Single Model Mill Closure
Model
Mill
Small
Medium
Large
Model
Mill
Size
(MT)
900
1,800
3,600
Mill
Employees3
70
140
280
Total
Impact
on Work
Force'3
155
309
619
% of
Region1 s
Work
Force
0.7
1.5
2.9
Total Mill
Payroll
(Million $)c
1.6
3.2
6.3
Total Impact
on Payroll
(Million $)d
3.2
6.3
12.5
Percent
of Area
Payroll
1.1
2.1
4.3
cross-section of model mills assumes no economies of scale with
respect to the utilization of labor. Employees per metric ton of capacity
was calculated using data from U.S. Department of Energy, Statistical Data
of the Uranium Industry, 1980. Mill employees equals model mill capacity
times employees per metric ton of capacity.
employees times 2.21.
^c'Total mill payroll equals mill employee times average yearly salary per
employee. Salary per employee was obtained from U.S. Department of Commerce,
Bureau of the Census, Census of the Mineral Industries, 1977.
mill payroll times 1.97.
5-35
-------
that in 1983, there will be 4,900 MT U30g on standby. Since the
amount of regulatory closures, (assumed to occur in 1984), are only 12
percent of the standby capacity in the previous year, there will be no
shortfall in production over the period 1983 through 1989. After 1989, a
shortfall in production is assumed to be avoided by additional new mill
capacity (above the baseline projection) becoming operational. With no
shortfall in production being projected, there will be no impact on the
level of imports.
5.2.5 Government Subsidy
The Federal and State Governments have assumed the financial
responsibility for reclamation of tailings piles at all inactive uranium
mill sites under the Uranium Mill Tailings Radiation Control Act of 1978
(UMTRCA). The apparent reason for their assuming financial responsibility
was that the mills at these sites had been operating under contracts with
the Federal Government, primarily for supplying uranium to be used for
defense purposes. UMTRCA was enacted into law after the life cycles of
those mills had been completed, leaving no opportunity for tailings
disposal control costs to be recovered through product price increases.
If tailings control requirements had been imposed earlier, the mill owners
would have been able to pass the control costs to their customers, i.e.,
the Federal Government. Thus, the government would have ultimately paid
the control costs.
Many of the active mills also operated under contracts with the
Federal Government between 1943 and 1970. Therefore, some of the existing
tailings inventories at these sites also resulted from government
contracts. The tailings resulting from these government contracts are
referred to as being commingled with the tailings resulting from the
mills' commercial business. The Department of Energy National Defense
Programs Authorization Act of 1981 authorized DOE to assess the commingled
tailings situation and report back to Congress by October 1981 with
recommendations for dealing with them. DOE submitted this report to
Congress in June 1982 (DOE82).
According to the DOE study, commingled tailings are located at 13
licensed mill sites. As of the end of 1981, there were approximately 125
million MT (138 million short tons) of tailings at these 13 sites, of
which about 51 million MT, or 41 percent, are believed to be defense
related. The DOE estimate of defense-related tailings represents about
29 percent of all the tailings (175 million MT) which we estimate have
accumulated at all the licensed mills as of January 1983 (see Table 2-10).
Efforts are underway in Congress to provide financial assistance to
mill owners whose sites contain commingled tailings. These efforts are
based on the grounds that since the Federal Government agreed to pay for
the stabilization of tailings at inactive sites which resulted from
government contracts, the government should help pay for the stabilization
5-36
-------
of tailings at active sites which also resulted from government
contracts. Whether or not a subsidy is justified has no effect on the
development of the EPA standards and, therefore, is not discussed in this
RIA. However, we have estimated the potential size of a subsidy for the
different economic impact cases based on our tailings disposal cost
estimates and DOE's estimate of the quantity of tailings resulting from
government contracts.
To determine the amount of the subsidy for each case, we multiply an
appropriate unit cost of disposal ($ per ton of tailings) by the
51 million MT of defense-related tailings estimated by DOE. The unit cost
is derived by dividing our total cost estimates for disposing of all 26
existing tailings piles (from Table 5.2) by the estimated total quantity
of tailings at these piles, 175 million MT. These estimates are presented
in Table 5.17. Ignoring the no disposal case (Alternative Standard A),
the subsidy estimates range from 45 million dollars for Case Cl to 158
million dollars for Cases C5 and D5.
Since the EPA standards are indifferent toward the establishment of a
subsidy program, we have not investigated the ways in which such a program
could be implemented. Also, we have not analyzed the impact that
subsidies would have on the individual mills. If a subsidy program is
implemented for the sites with commingled tailings, then the economic
impacts resulting from tailings disposal would be diminished for those
sites.
5-37
-------
Table 5.17. Subsidy Estimates for Commingled Tailings
By Alternative Standard
(millions of 1983 dollars)
Alternative Standard Amount of Subsidy
A
Bl 46
B2 75
B3 100
Cl 45
C2 75
C3 102
C4 131
C5 158
D2 75
D3 102
D4 131
D5 158
5-38
-------
REFERENCES FOR CHAPTER 5
DOE82 U.S. Department of Energy, Commingled Uranium Tailings Study,
Volume I, Plan for Stabilization and Management of Commingled
Uranium Mill Tailings, DOE/DP-0011, June 30, 1982.
EMJ81 Engineering and Mining Journal, "Can Changes be Made that Will
Encourage Mine Development?" May 1981.
5-39
-------
6. Selection of Standards
There are two major parts of the standards, as discussed in
Chapter 1: control of releases from tailings during processing
operations, and permanent control of tailings through final disposal.
Since most of the requirements for operations are already in existence,
through regulations promulgated under the AEA, the CWA, and the SWDA (as
required under the Act), alternative standards for operations are not
considered in this analysis. However, these existing standards (which are
supplemented in these standards by a few additional criteria specific to
uranium tailings) are summarized in section 6.1 to show that all
identified environmental threats from tailings are or will be controlled.
Comments received on the proposed standards during operation are reviewed
and responded to in section 6.1.
Section 6.2 deals with standards for disposal and includes a summary
of material presented in this RIA and in the FEIS.
6.1 Operations Standards
Particulate Emissions
Radioactive particulate emissions from uranium mill tailings piles
during the operational phase of the mill are currently controlled by EPA1s
Uranium Fuel Cycle Standards (40 CFR Part 190). These standards limit the
annual radiation dose to members of the public to 25 millirem to the
whole body or any organ (except the thyroid, which is limited to
75 millirem) as a result of discharges to the general environment from
uranium fuel cycle operations. Uranium mills, including the tailings
piles, are included in uranium fuel cycle operations, as defined in the
standards.
The American Mining Congress has previously petitioned EPA to relax
these standards at milling operations, and this petition is still under
consideration. No significant new comments were received concerning the
existing standards for particulate emissions.
Radon Emissions
Control of radon emissions from uranium mill tailings is not
currently included in EPA standards. Radon and its decay products were
excluded from 40 CFR Part 190 because, at that time, considerable
uncertainty existed about the feasibility of controlling radon emissions
from tailings piles. EPA concluded that the problems associated with
controlling radon emissions were sufficiently different from those of
other radionuclide emissions associated with the uranium fuel cycle to
warrant separate consideration at a future time. Radon concentrations in
air in unrestricted areas resulting from emissions from uranium mill
tailings are currently limited by NRC's Standards for Protection Against
Radiation (10 CFR Part 20). These standards, which are derived from the
Federal Radiation Protection Guidance (25 FR 4402), limit the radon
6-1
-------
concentration in air in areas to which individual members of the public
have access to 3 pCi/1. Areas in which unlimited permanent residence by
large numbers of people is possible are limited to one-third of this
value, or 1 pCi/1, by Federal Radiation Protection Guidance.
The proposed rule required that the regulatory agency apply the ALARA
principal in establishing management procedures and regulations to control
radon from operating mills. This approach was proposed because EPA
concluded that numerical standards to control radon were not reasonable
during operations. This is because practical methods for reducing radon
emissions during operations of existing mills and piles (which are limited
in effectiveness to a factor of 2 or 3) are of different effectiveness,
depending on site-specific characteristics, and because there are large
variations in the effectiveness possible at different stages of the growth
of a given pile. The primary means for controlling radon emissions from
existing tailings piles during operations is to keep the tailings as wet
as possible and optimize the speed at which tailings are disposed.
Some commenters indicated that the provisions of the proposed rule
were inadequate to assure that the public would be protected. They argued
that EPA has the responsibility under both UMTRCA and the Clean Air Act to
provide suitable health protection to all members of the public. They
suggested that directly requiring certain tailings management practices
would (rather than depending upon the NRC to require them as implemen-
tation of ALARA) provide greater public health protection than the
provisions of the proposed rule. For example, they note that "staged" or
"phased" disposal of tailings and good water management practices should
be required by EPA standards.
EPA has concluded that it may be desirable to provide greater
assurance that radon releases will be minimized during milling operations
than is provided by the proposed rule. The Agency has not performed
sufficient analysis of work practice and tailings management techniques to
determine whether they are always suitable for this purpose and which
alternatives are best. Therefore, the Agency is publishing, in a separate
Federal Register notice, an Advance Notice of Proposed Rulemaking under
the Clean Air Act for consideration of standards for the control of radon
emissions from uranium tailings piles during the operational period of a
uranium mill. The ANPR will enable the Agency to gather information on
the feasibility, effectiveness, and cost of various alternatives that
would control radon releases from operating mills. This will enable EPA
to be better informed when judging whether standards are needed, and if
so, what the most suitable requirements should be.
Discharges to Surface Waters
Wastes are currently discharged to surface waters at only one site.
Such discharges are not necessary in most uranium mining regions because
annual natural evaporation is greater than precipitation. Liquid wastes
can therefore be stored in a pond, lined to prevent seepage into
groundwater, and allowed to evaporate.
6-2
-------
EPA is continuing to implement the requirements of the Clean Water
Act. EPA's programs for new source performance standards (NSPS) are now
aimed principally at control of toxic pollutants. Regulations are now in
effect which define best practicable technology (BPT) for wastewater
discharges from existing mills and new source performance standards (NSPS)
for control of discharges from new mills using the acid leach, alkaline
leach, or combined acid and alkaline leach process for the extraction of
uranium (40 CFR Part 440). As an example of these regulations, the NSPS
requires that "There shall be no discharge of process wastewater from
mills using the acid leach, alkaline leach, or combined acid and alkaline
leach process for the extraction of uranium or from mines and mills using
in-situ leach methods."
Several commenters from Virginia and Illinois expressed concern
regarding the applicability of the standards to wet sites, i.e., locations
where annual average precipitation exceeds annual average evaporation.
EPA stated in the Federal Register notice accompanying the proposed
standards that if uranium mining and milling is conducted in wet regions,
the adequacy and appropriateness of the standards may have to be reviewed,
particularly the water protection requirements. Based on this statement,
the commenters were concerned that EPA intended to apply less stringent
standards for tailings control at wet sites.
Our remarks concerning wet sites in the Preamble for the proposed
standards were mainly intended to acknowledge that U.S. uranium mills are
in arid and semi-arid areas, and that we have little operating experience
with control measures needed to comply with the standards under wet, as
opposed to under dry, conditions.
The final standards should provide adequate environmental and health
protection for uranium milling in all regions of the United States. The
basic groundwater protection provisions during operations have been
modified to provide for protection against the "bathtub" effect
(accumulation of water in the wastes) at sites in wet regions. These
provisions are identical to those that were developed at EPA for national
application to hazardous waste sites. The New Source Performance
Standards, 40 CFR 440.34, protects surface water by prohibiting discharges
from new mills except for the amount by which precipitation may exceed
evaporation. Any discharged water must satisfy concentration standards
corresponding to use of the best available demonstrated treatment
technology. In addition, specific limits are established under these
standards for discharges of zinc, radium-226 (dissolved and total),
uranium, and total suspended solids.
EPA believes these and the other provisions of the final standards
will provide adequate protection for wet and dry areas, considering
differences in both net precipitation and population density.
6-3
-------
Groundwater Protection
The Act requires that the standards for nonradiological hazards
protect human health and the environment in a manner consistent with the
standards required under subtitle C of the Solid Waste Disposal Act
(SWDA), as amended (Section 275b(2)). The Act also directs the NRC to
develop regulations to implement these standards that are in conformance
with the SWDA (Section 84a(3)). Specifically, this section directs the
NRC to "...insure that the management of any uranium tailings conforms to
general requirements established by the Commission, with the concurrence
of the Administrator, which are, to the maximum extent practicable, at
least comparable to requirements applicable to the possession, transfer,
and disposal of similar hazardous material regulated by the Administrator
under the Solid Waste Disposal Act, as amended."
Standards for nonradiological hazards under subtitle C of SWDA are
part of a comprehensive regulatory program to protect human health and the
environment from hazardous waste disposal in or on the land. This program
includes identification and listing of hazardous materials, a manifest
system to track hazardous materials from cradle to grave, controls for the
transportation of hazardous materials, standards for owners and operators
of hazardous waste treatment, storage and disposal facilities, and a
permitting system for the treatment, storage, and disposal of hazardous
waste. EPA's role for control of hazardous materials from uranium
tailings under this Act is limited to setting standards and does not
include a regulatory responsibility. That responsibility is vested in the
NRC and the States as the licensing agencies under Title II of the Act.
The purpose of the SWDA groundwater protection regulations is to
assure that groundwater quality is compatible with the various uses to
which it may be put, so that reasonable assurance exists that human health
and the environment will be protected. To accomplish this, the
fundamental goal of the regulations is to minimize the migration into the
environment of the hazardous component of the waste placed in land
disposal units. EPA's strategy for achieving this goal has two basic
elements. The first element is a liquids management strategy for disposal
units that is intended to minimize leachate generation in the waste
management units, to provide an impermeable barrier between the waste unit
and the subsurface, and to remove leachate from these units before it can
enter the subsurface environment. This is the "first line of defense" in
the sense that it seeks to prevent groundwater contamination by
controlling the source of the contamination. The second element of the
general strategy is a groundwater monitoring and response program that is
designed to remove leachate from the groundwater if it is detected. The
monitoring and response program serves as a backup to the liquids
management strategy and would be established by regulations set by the
NRC, with the concurrence of the Administrator, upon promulgation of these
standards by EPA.
6-4
-------
Numerous comments were received regarding the proposed standards for
groundwater protection. These comments are classified as: (i) Shared
responsibilities between EPA and NRG; (ii) Choice of liner material;
(iii) Alternative concentration limits; (iv) Timing of corrective actions;
(v) Nonhazardous materials contamination of groundwater; and
(vi) neutralization of tailings. Each class is discussed below.
(i) Shared Responsibilities between EPA and NRC
EPA recognized, in proposing these standards, that the Act
establishes a shared responsibility between EPA and NRC for assuring
groundwater protection. EPA attempted to reach a balance on this issue by
assigning health protection standards-related responsibilities to EPA and
technical/engineering implementation-related responsibilities to NRC.
This is consistent with the traditional role of each agency over the past
three years. Thus, EPA proposed to retain authority to allow deviations
from standards through a concurrence role for exemptions and alternative
standards for specific sites.
Regarding the technical/engineering responsibilities, EPA chose to
impose only one requirement - that new tailings impoundments or additions
to existing impoundments install a liner to provide groundwater
protection. We believe this requirement mandatory since it is the primary
standard under the SWDA regulations. Other than this requirement (and the
choice of lining materials, alternative concentration limits, and the
timing of corrective actions, as discussed below), EPA delegated to NRC
the responsibility for exemptions to the liner requirement and the
approval of monitoring schemes. We believed this was a reasonable split
of the shared responsibilities for groundwater protection.
NRC commented that it believed EPA's nondegradation policy for
groundwater protection was overly restrictive and that EPA's proposed
retention of a concurrence role for exemptions and alternative standards
for groundwater appeared to be in conflict with the proviso in
Section 275b.(2) of the AEA, as amended, that no EPA permit (under SWDA)
is required. The NRC suggested that a consistent reading of
Sections 84a.(3) and 275b.(2) allows EPA some latitude in formulating a
groundwater protection standard that is less rigid and more realistic for
uranium mill tailings impoundments than the proposed standards. In
support of their opposition to the combined EPA concurrence role and the
nondegradation standard, the NRC stated they will be required to consider
exemptions in practically every case, not just occasionally.
EPA has a basic goal of protecting groundwater resources for future
uses and has applied this throughout its rules affecting activities that
may pollute groundwater. The circumstances surrounding this rulemaking do
not appear to be significantly enough different from previous cases to
warrant modifying this approach. Therefore, EPA has concluded the goal
for protection of groundwater, i.e., nondegradation, should be retained in
this rule.
6-5
-------
The proposed retention of an EPA role in issuing alternative
standards or exemptions for groundwater was based on EPA's responsibility
to establish standards that would assure health protection. EPA believes
this responsibility cannot be delegated. However, EPA is modifying the
concurrence role for issuing alternative concentration limits (see below)
which will reduce the administrative burden for noncompliance situations.
(ii) Choice of Liner Material
In proposing to adopt the SWDA primary standard, the liner
requirement under Subpart K of 40 CFR 264, EPA recognized that the plastic
liner requirement might not be a suitable choice at all tailings
impoundments. Consequently, comments were solicited regarding this
requirement in the April 29, 1983 notice.
Some commenters responded that they knew of no liner technology
capable of achieving the goal of the liner requirement, i.e., no seepage
of hazardous constituents into the soils underlying an impoundment, or
groundwater, or surface waters. Others testified that clay liners could
be expected to perform as well or better (in terms of reliability against
catastrophic failure) as plastic liners in protecting groundwater. Still
others testified that double liners, incorporating both clay and plastic,
were the appropriate control technology.
We have concluded that this technical controversy is not yet resolved
and that it would be inappropriate for EPA to make a judgment on the exact
mechanism to be used for achieving containment of leachates. We,
therefore, have "left the existing SWDA requirement unchanged. This
requirement, which requires a non-porous liner, also contains detailed
provisions (264.221(b)) which will permit use of other means for
containing leachates if it can be demonstrated that groundwater will be
protected (i.e., meet the standards established by this rule).
(iii) Alternative Concentration Limits
Several commenters stated that groundwater beneath tailings piles
would exceed the standards at essentially all existing sites. Thus, the
groundwater standard would be exceeded in nearly all cases. A major
reason for this problem is that many of the piles have been in use for
years, extending back to the period before NRG increased regulatory
requirements in the late 1970's to require liners.
EPA recognizes that incorporation of the SWDA rule specifying
non-degradation at the edge of the waste (the tailings) would make most
existing piles not in compliance. This would require exemptions or
alternative standards or the initiation of corrective actions for most
piles.
6-6
-------
An important difference between requirements under UMTRCA and SWDA is
that the title to the land which is used as a disposal site under UMTRCA
must be transferred to the United States or the State in which such land
is located. The SWDA has no such requirement. Since the government will
control land used for tailings disposal, EPA believes there is sufficient
justification to provide flexibility regarding the point of compliance.
Therefore, we have changed the rule to allow NRC to issue alternative
concentration limits without requiring EPA concurrence when the secondary
standards are met within 500 meters, or the disposal site boundary,
whichever is less from the edge of the tailings at existing sites.
(iv) Timing of Corrective Actions
Some concerns were expressed regarding the proposed requirement to
put corrective actions for restoration of groundwater quality into
operation as soon as practicable, and in no event later than one year,
after a noncompliance determination is made by the regulatory agency. The
major concern appears to be that it may take longer than one year to
devise and implement an effective corrective action. The geohydrological
characteristics also vary greatly from site to site. This can also
influence the timing of corrective actions.
Based on these considerations, EPA concluded that it would be
appropriate to extend the time limit for implementation of corrective
actions to eighteen (18) months. However, the requirement for submlttal
of an application for a license amendment within 180 days to establish a
corrective action program, as required under the SWDA rule 264.99(i),
remains unchanged.
(v) Nonhazardous Materials Contamination of Groundwater
Comments were received on two different aspects regarding the
contamination of groundwater by nonhazardous materials. (They include
chlorides, sulfates, manganese, and total dissolved solids, among
others.) At high concentrations, these materials can make water unfit for
use for other than health-related reasons.
One comment on these materials was that several of them are more
mobile than hazardous materials. Thus, they precede hazardous materials
in contaminating groundwater. Groundwater monitoring for these materials
allows the prediction of future groundwater contamination by hazardous
materials. This detection scheme would, therefore, provide an early
warning of groundwater contamination and allow early corrective actions to
be taken, thereby effectively preventing ground contamination by hazardous
materials.
EPA agrees with this comment. Analyzing water samples for substances
from tailings that are expected to be the most mobile in a given
groundwater environment is a very useful site-specific monitoring
6-7
-------
requirement. The regulatory agencies may establish such requirements
whether or not EPA sets standards for nonhazardous substances. Therefore,
we did not set standards for substances that do not endanger human health.
A second view held that much of the groundwater in the western States
is already contaminated with nonhazardous materials to an extent that it
is unsuitable for use. These are primarily shallow aquifers (or uppermost
aquifers) which would be the first to be contaminated by tailings piles
materials. Since these groundwaters are already contaminated, it was
argued that there is no need to prevent additional contamination.
This comment would require changing the groundwater protection policy
EPA has established under the SWDA rules. These standards are required to
be consistent with the SWDA rules to the extent reasonable under UMTRCA.
We do not believe this rulemaking is the appropriate forum to reconsider
basic EPA policy on groundwater protection.
(vi) Neutralization of Tailings
Some commenters recommended that EPA require neutralization of
tailings as a method to protect groundwater. Neutralization is chemical
treatment that would make the tailings neither acid nor alkaline. When
neutral, most constituents in the tailings precipitate or react with
surrounding material (earth at the bottom of the impoundment) and thereby
are less prone to move through the earth and into groundwater.
EPA conducted a study of tailings neutralization in 1980, as
discussed in the DEIS. Two major problems were identified regarding
neutralization. First, some of the hazardous constituents in tailings
form complex compounds that remain mobile, i.e., they do not react with
surrounding material but remain in solution, over wide ranges of
acidity/alkalinity conditions. Selenium, arsenic, and molybdenum - all
constituents of tailings - behave this way. It is not clear that adequate
control can be achieved, even given careful operation of the
neutralization process, considering the large volumes of tailings.
Second, the costs of neutralizing the tailings are significant, about
the same as installation of a liner. Most of the cost is due to the need
for a sludge storage lagoon. Also, neutralization would not preclude the
need for a liner.
EPA is limited in its authority under the Atomic Energy Act and
UMTRCA to establishing generally applicable environmental standards.
Generally, this does not include requirements for specific control
methods, such as neutralization.
In view of these issues, EPA concludes that requiring neutralization
of tailings was inappropriate through these standards. We note that the
standards do not prohibit such treatment, but leave this decision to the
regulating agencies.
6-8
-------
6.2 Disposal Standards
6.2.1 Over vi ew
The radioactivity and toxic materials in tailings may cause cancer
and other diseases, as well as genetic damage and teratogenic effects.
More specifically, tailings are hazardous to man primarily because:
(1) radioactive decay products of radon may be inhaled and increase the
risk of lung cancer; (2) individuals may be exposed to gamma radiation
from the radioactivity in tailings; and (3) radioactive and toxic
materials from tailings may be ingested with food or water. The first of
these hazards is by far the most important.
The radiation hazard from tailings lasts for many hundreds of
thousands of years, and some nonradioactive toxic chemicals persist
indefinitely. The hazard from uranium tailings, therefore, must be viewed
in two ways. Tailings pose a present hazard to human health. Beyond this
immediate but generally limited health threat, the tailings are vulnerable
to human misuse and to dispersal by natural forces for an essentially
indefinite period. In the long run, the future risks to health of
indefinitely extended contamination from misused and dispersed tailings
overshadow the short-term danger to public health. The Congressional
report accompanying UMTRCA recognized the existence of long-term risks and
expressed the view that the methods used for disposal should not be
effective for only a short period of time. It stated: "The committee
believes that uranium mill tailings should be treated...in accordance with
the substantial hazard they will present until long after existing
institutions can be expected to last in their present forms..." and, in
commenting on the Federally-funded program to clean up and dispose of
tailings at the inactive sites, it stated "The committee does not want to
visit this problem again with additional aid. The remedial action must be
done right the first time." (H.R. Rep. No. 1480, 95th Congress, 2nd
Session, Pt. I, p. 17, and Pt. II, p. 40 (1978).)
Based on a review and analysis of the risk to public health and the
environment posed by uranium mill tailings, EPA concludes that the primary
objective of standards for control of hazards from tailings through air
pathways is isolation and stabilization to prevent their misuse by man and
dispersal by natural forces, such as wind, rain, and flood waters. The
second objective is to minimize radon emissions from tailings piles. A
third objective is the elimination of significant exposure to gamma
radiation from tailings.
The primary objective of standards for control of hazards from
tailings through water pathways is to prevent loss of process water
through seepage, prior to closure. A secondary objective is to avoid
surface runoff and infiltration both before and after disposal.
Various methods are available to achieve these objectives. EPA has
reviewed disposal methods and concluded that earth covers were likely to
be the method used in most cases. The descriptions and costs of
alternative levels of control have been presented in earlier sections of
6-9
-------
this RIA and the FEIS. After reviewing these alternatives, EPA concludes
that a radon emission limit of 20 pCi/m2s, which should be effective for
1,000 years, is reasonable and provides an ample margin of safety for
protection of health. The rationale for this selection is discussed
below. Groundwater is protected at dry sites by the thick earthen cover
needed to achieve these limits. At wet sites, a cover that is less
permeable than the liner is required to protect groundwater.
6.2.2 Basis for Selection
Comments on the proposed disposal standards are discussed below under
three headings: (i) Standards based on current population data,
(ii) Passive vs. institutional controls, and (iii) Radon emission limit.
(i) Standards Based on Current Population Data
During the review of the standards for the inactive sites by certain
Federal agencies, questions were raised regarding the appropriateness of
the disposal standards for general application to all 24 inactive sites.
Some reviewers suggested that less restrictive standards might be
appropriate for sites that are in currently sparsely populated areas.
Other reviewers suggested that we consider a radon standard that applies
at and beyond the fenced boundary of such a site, i.e., a standard that
relies in part on institutional maintenance of control of access. EPA
requested public comments on these issues for the inactive sites
(48 FR 605, January 5, 1983). These issues are most simply stated as
(1) Should the degree of radon control after disposal depend in part on
the size of the current local population, and (2) Should implementation of
the disposal standards be permitted to depend primarily or in part on
maintenance of institutional control of access (e.g., by fences)? We also
specifically requested comments on these issues in the April 29, 1983
notice of proposed rulemaking for active mills. The majority of
commenters who addressed this issue opposed any relaxation of the
standards at remote sites. Many raised the "equity" consideration, in
which the primary concern is the fairness of protecting a few people less
just because of where they live.
In 1983 EPA counted the number of people living close to all the
active and inactive mill sites. Of the 52 sites surveyed, only 7 had no
people living within 5 kilometers (3 miles). Another 6 sites had 10 or
fewer people living within 5 kilometers. Collectively, however, the mill
sites have a normally distributed continuous range of local populations,
and it is difficult to distinguish a special set of sites. The definition
of a remote site is therefore difficult to achieve, unless it is done
arbitrarily. In addition, demographers have concluded that it is not
possible to determine that a population at a specific location will remain
low in the future, if it is low now.
6-10
-------
The motivation for considering relaxed standards at "remote" sites is
to reduce the cost of disposal. Our analysis shows that the potential
cost savings of less restrictive standards at such sites is small. We
estimate that, even for the case of no radon control at all sites (case
Cl) and with no provision for the added costs of institutional control
through fencing, land-use control, and land acquisition (to avoid
unacceptably high individual doses to nearby residents), only 44 percent
of the cost of disposal at the level required by these standards would be
potentially recoverable. We have examined the added costs required for
institutional control and conclude that they may vary from about 10 to 50
percent of the costs required by these standards, depending mostly on the
cost of land acquisition at specific sites. We have concluded, therefore,
independent of other considerations, that when these significant costs for
institutional control are added and any net saving is applied to only
those sites that might be defined as "remote," the potential total cost
saved is not significant enough to warrant separate standards.
Finally, with regard to the Agency's legal authorization to establish
a separate level of protection at remote sites by issuing two sets of
standards, EPA is aware of no basis upon which it could provide some
persons less protection than is afforded to others where the only
difference between them is choice of residential location. We are also
aware of no site that is uninhabited and can also reasonably be assumed
will remain uninhabited. We conclude, therefore, that relaxed standards
for "remote" sites are not feasible on demographic or legal grounds, and
are not attractive, in any case, on the basis of cost-effectively
achieving the various public health and environmental goals of this
rulemaking.
(ii) Passive vs. Institutional Controls
As noted above, EPA requested comments on whether a radon limit
applied at the boundary ("fenceline") of the Government-owned property
around a tailings pile would be an appropriate form of standard for the
sites with low nearby populations. Such a standard could be satisfied
largely by institutional methods, i.e., by acquiring and maintaining
control over land. The proposed disposal standard, however, can be
satisfied only by generally more costly physical methods (such as applying
thick earthen covers) that control the tailings and their emissions, with
minimal reliance on institutional methods. EPA also requested comments on
the adequacy of such a radon "fenceline" standard to meet the objectives
of the UMTRCA.
Comments on this issue ranged from strong support of passive
stabilization requirements for periods greater than 1,000 years to
protection for only a few decades with reliance on institutional controls.
6-11
-------
EPA's position is that protection from the long-term hazards
associated with radioactive waste should primarily rely on passive control
methods. We also note the intent of Congress as stated in the
Congressional report accompanying UMTRCA: "The committee believes that
uranium mill tailings should be treated in accordance with the substantial
hazard they will present until long after existing institutions can be
expected to last in their present forms." In addition, the costs of land
acquisition to limit maximum individual exposures can easily negate any
potential saving through use of thin covers. However, institutional
control can play a useful secondary role in supplementing passive controls
and in assuring, during the early period of disposal, that passive
controls are adequate to achieve their design objectives.
(iii) Radon Emission Limit
Reliable quantitative estimates of health effects from tailings can
be made only for radon emissions and windblown particulates. Health
effects from misuse of tailings and contamination of water cannot be
quantified reasonably because of the extremely high degree of uncertainty
associated with the likelihood that misuse and contamination might occur
and the wide range in the degree to which people are exposed to radiation
and toxic substances. (For example, tailings used as fill in unoccupied
areas would not result in direct human exposure. Using tailings as fill
for residential buildings very significantly elevates radiation exposure
and risk. The degree to which people might be exposed to contaminants
from tailings through waterborne pathways is subject to similarly high
uncertainties.) The health effects from radon and its decay products are
much greater than from particulates, even when external radiation and food
chain contributions are included in the particulate estimates. Therefore,
only quantitative estimates of effects from radon emissions will be
discussed further here. However, based on historical circumstances of
misuse of tailings, we believe that the effects from misuse or water
contamination could potentially be comparable to those from radon
emissions if long-term protection is not afforded.
The primary concern of commenters who thought the proposed radon
emission standard was too lax was over the risk to nearby individuals.
The estimated added lifetime risk of fatal lung cancer for someone living
permanently near a model pile is 1 in 1,000 at a 20 pCi/m2s emission
level. (Based on our 1983 survey, we conclude that such a person is
likely to be 0.5 to 1.0 km from the edge of a pile. The survey identified
a few dozen such individuals at existing piles that are expected to
continue in place.)
Commenters who thought the proposed radon emission standard is too
strict contended that the cost of compliance would be too high in view of
the small contribution radon from tailings makes to a population's total
exposure to atmospheric radon. They also generally believed EPA had
overestimated the health effects of radon.
6-12
-------
In Chapter 4, we examined the cost per radon death avoided for
alternative control levels from several viewpoints. This range of
viewpoints included the length of time over which health effects should be
related to costs and whether low-risk nationwide population effects should
be included with high-risk regional population effects in making
benefit-cost comparisons. We conclude that the incremental cost per radon
death avoided at a 20 pCi/m2s emission limit is a reasonable expenditure
under all scenarios. The range of incremental costs per death avoided at
this control level is from $130,000 (nationwide health effects estimated
for 1000 years) to $2.5 million (regional health effects estimated for
only 100 years). For the next, more stringent, level of control,
6 pCi/m2S) the incremental costs are higher: $630,000 to $12 million
per radon death avoided. For the next, less stringent, level of control,
60 pCi/m2S) the incremental costs are lower: $70,000 to $1.4 million.
Whether or not the expenditure for a control level is acceptable depends
on one's view of the relevant factors to be considered in valuing the
benefit stream. On a relative basis, the incremental cost increases by a
factor of 5 for going from the 20 pCi/m2s limit to 6 pCi/m2s, and
increases by only a factor of 2 for going from 60 pCi/m2s to
20 pCi/m2s.
Selecting a limit for radon emission from tailings involves four
public health objectives, in addition to reducing health effects from
radon released directly from the pile. These may all be achieved by using
a thick earthen cover, which serves to inhibit misuse of tailings, to
stabilize tailings against erosion and contamination of land and water, to
minimize gamma exposure, and to avoid contamination of groundwater from
tailings. A radon emission limit of 20 pCi/m2s or less would require
use of a sufficiently thick earthen cover to achieve all of these
objectives.
The risk to people who live permanently very close to tailings piles
can still be relatively high, up to 1 in 1000 for lifetime residency, for
a limit of 20 pCi/m2s. However, the practicability and cost-
effectiveness of providing more radon control by requiring design for
lower levels of emission falls rapidly below 20 pCi/m2s. We note that
no pile has ever been protected by such a cover; that is, covers with
defined levels of control and longevity are undemonstrated technology.
The design of covers to meet a specific radon emission limit and period of
longevity must be based on measurements of properties of local covering
materials and prediction of local parameters, such as soil and tailings
moisture, over the long term. Because of uncertainties in measuring and
predicting these parameters, the uncertainty of performance of soil covers
increases rapidly as the stringency of the control required increases.
Thus, in the case of lower levels, the primary issue becomes whether
conformance to a design standard for such levels is practicably achievable.
There is some information available regarding the practicality of
reduction of radon emissions to levels approaching background. Tests
conducted at the Grand Junction, Colorado, pile for four different thick
6-13
-------
earthen covers reduced radon emissions to values ranging from 1.0 to
18.3 pCi/m2s. vte believe ranges like these can be expected generally in
practice since the radon control characteristics of earth used for covers
will vary from site to site. If the standard were reduced to a
6 pCi/m2s level, three of the four covers studied would not achieve the
standard. Exactly how much thicker the cover on these three piles would
need to be to achieve a lower limit (e.g., 6 or 2 pCi/m2s) is not
known. Experts commented during hearings on the standards that, although
covers can be designed to meet such levels as 20 pCi/m2s, estimation
models are not reliable at significantly lower emission levels.
We concluded that achieving conformance with a radon emission
standard that is significantly below 20 pCi/m2s (6 or 2 pCi/m2s, for
example) clearly would require designers to deal with unreasonably great
uncertainty for this undemonstrated technology.
The risk from these radon emissions diminishes rapidly with distance
from the tailings pile (approximately one-third for each doubling of the
distance beyond a few hundred meters). There currently are only about 30
individuals living so near to active piles that they could be subject to
nearly maximum post-disposal risk (we have not specifically assessed their
risk, however) if they maintain lifetime residence in the land area
immediately adjacent to the tailings piles. In sum, we believe that the
probability of a substantial number of individuals actually incurring
these maximum calculated risks is small.
We conclude that it is not reasonable to reduce the emission standard
below 20 pCi/m2s because of (1) the uncertainty associated with the
feasibility of implementing a requirement for a significantly lower
standard, and effectiveness of thicker covers, (2) the small reduction in
total health benefit associated with such thicker covers, (3) the limited
circumstances in which the maximum risk might be sustained, and (4) the
uncertain, but substantial, cost of the added cover thicknesses needed for
reasonable assurance of achieving levels that further reduce individual
risk significantly.
6.2.3 Impacts of Standards
Environmental Impacts
Under the proposed standards, the tailings would remain covered and
isolated for at least 1,000 years. Radon emissions from disposed tailings
would be well above normal levels for ordinary land, but well below levels
if the tailings were not covered, for thousands of years. Groundwater
would be protected for thousands of years under the proposed standards.
The earthen cover material will be obtained from borrow pits close to
the tailings pile. For tailings in surface mining locations, the
incremental impact of a borrow pit, added to the impact of the surface
mining, will be small to negligible. However, in locations where ore is
6-14
-------
taken from underground mines, the impact of a borrow pit can be
significant. The area covered by a borrow pit could range from 16 ha
(40 acres) up to 100 ha (250 acres) depending on the depth of the earth
that can be removed. Thus, in some cases, the land surface disturbed to
obtain cover material could be about the same as the area covered by
tailings. In all cases, however, we assumed the topsoil at the borrow pit
was saved, all high walls were graded to an 8:1 slope after the earthen
cover material was removed, and the topsoil replaced and landscaped.
Health Impacts
The deaths avoided by control of radon are estimated for
environmental emissions of radon only, since we can make no reasonable
estimate of the potential misuse of tailings. Under these standards, the
total deaths avoided (compared to tailings piles which are left
uncontrolled) would be about 600 for the first 100 years after disposal
and tens of thousands during the expected period of effectiveness of
control. These estimates relate to the cumulative generation of tailings
projected through the year 2000 and do not take credit for any safety
factors introduced into cover design to provide reasonable assurance that
the emission and longevity requirements will be satisfied. If no controls
are implemented, the health risk to people living very near to tailings
(0.5 to 1.0 km from the edge of the tailings pile) is about 2 chances in
100 of fatal lung- cancer during their lifetime. This risk is reduced to
less than 1 chance in 1,000 under these standards.
The misuse of tailings in constructing buildings poses the greatest
hazard to individual health associated with tailings. Under these
standards, we believe the probability of unauthorized removal of the
tailings will be low for many thousands of years.
We estimate that covering the tailings under the standards could
result in about 4 accidental deaths and about 3 radiation-induced deaths
for all tailings (existing and new) to the year 2000. These deaths would
occur among workers only. These impacts are several orders of magnitude
smaller than the estimated benefits of covering the tailings.
Economic Impacts
The economic impacts of the disposal standards are best represented
by two cases in our analysis. Economic impact case 7 assumes that all
future tailings projected to be generated at existing mills will be
disposed of in existing impoundments. Case 31 assumes that all future
tailings will be placed in new impoundments with liners. As explained in
Chapter 5, these are the two extremes for the industry impacts, with the
most likely result falling within these bounds. These two cases assume
the same control method for disposal of both existing and new piles, that
is, a 2.4 meter earth cover (the top 0.5 meters of which consists of
pebbly soil) with rock cover on the 5:1 slopes.
6-15
-------
Table 6.1 summarizes the cost and economic impacts of each of these
economic impact cases. Based on these estimates, we conclude that
compliance with the standards, assuming that other regulatory requirements
did not exist, would cost the uranium milling industry from about 310 to
540 million dollars to dispose of all tailings which exist today at
licensed sites and those which we estimate to be generated by the year
2000. These costs are present worth estimates (discounted at a 10 percent
rate) expressed on a 1983 constant dollar basis.
We estimate that the average uranium price may increase from 2 to
7 percent. As explained in Chapter 5, this range in price increase is
determined by the increases in production costs due to tailings disposal
estimated for the least impacted model existing mill and the model new
mill. In light of the currently poor economic condition of the industry
and the threat of foreign competition, it is unlikely that mills will be
able to pass through substantial portions of the disposal costs to their
customers. The results of our mill closure analysis indicate that under
the conditions of no cost pass-through and a medium cash-flow assumption,
(20 percent of revenues over the remaining life of the mill), there will
be no closures for either Case 7 or 31. When a less favorable cash-flow
assumption is used (15 percent), we estimate that one small model mill
will close in both cases. Under this same cash-flow assumption (15
percent), the closure in Case 7 will be avoided if there is a $1 per pound
of U^OQ pass-through, while the closure in Case 31 will be avoided
with a $2 per pound pass-through.
These estimates were made by assuming the baseline projection of
industry average uranium prices derived from DOE estimates presented in
Appendix B. This price projection is an average of two extreme scenarios
provided by DOE. We alternatively performed the mill closure analysis for
these two impact cases (7 and 31) by using the lower DOE price forecast.
Under the conditions of no pass-through and a medium cash-flow margin,
there were still no closures estimated. We then tried an even lower price
projection - 10 percent lower than DOE's low price projection for every
year after 1985 - and the results still showed no closures for Case 7, but
one small model mill closure for Case 31.
All of the estimates described above assumed the control costs for
both existing and future tailings. As discussed in Chapter 5, if the
disposal costs for existing tailings are viewed as a fixed cost of
production, then the decision to continue operating in the future may be
based on the incremental cost of future tailings disposal only. We,
therefore, performed the mill closure analysis again by only including the
cost of future tailings disposal. For a variety of cash-flow assumptions
and no pass-through, the results also indicated no closures for either
economic impact case.
We do not expect any macroeconomic impacts, including foreign trade,
to take place as a result of the standards. Since we do not expect any
mill closures as a result of this standard, there will be no regional
impact on employment.
6-16
-------
Table 6.1. Summary of Economic Impacts of Standards
Economic Impact Cases
Impact Characteristics 7 31
Present Worth Cost (106 1983 dollars)
Existing Tailings, 10% discount rate 260 260
Existing Tailings, Undiscounted 343 343
Existing Plus Future Tailings, 10% discount rate 314 537
Existing Plus Future Tailings, Undiscounted 508 996
Mill Closures(a)
100% Cost Absorption, 20% Cash-flow margin 0 0
100% Cost Absorption, 15% Cash-flow margin 1 1
Jl/lb Price Pass-through, 15% Cash-flow margin 0 1
J2/lb Price Pass-through, 15% Cash-flow margin 0 0
Uranium Price Increase (percents)(b)
Model existing mill with lowest increase 2.0 7.2
Model new mill 6.2 6.2
(^Expressed in small mill equivalents.
(^'Increases in production cost due to tailings disposal, assuming a
base production cost (excluding profit) of $30 per pound of
6-17
-------
These costs and economic impacts are not incremental costs of the
standards since much of this cost would probably occur in the absence of
the standards due to other regulatory requirements. These other
requirements are Nuclear Regulatory Commission (NRG) licensing regulations
and State regulations, and regulations required under Section 84(a)(l) and
(3) of UMTRCA. We did not estimate the costs imposed by these other
regulations because that would require a site-specific investigation.
Since our standards are required by Congress to be of general application,
we decided to develop a generic analysis based on model facilities.
Therefore, we could not estimate the net impact of the standards.
6-18
-------
APPENDIX A
MILL CLOSURE ANALYSIS
-------
Appendix A
Mill Closure Analysis
A.I Overview
This appendix presents the mill closure analysis. The purpose of the
analysis is to assess the economic impact of the proposed standards on
individual mills. Industry data on the number of mills in operation and
the number and size of existing tailings piles as of January 1983 were
used in this analysis. There were 24 mills operating or on standby at
this time with tailings piles, plus piles existed at two other licensed
mills which ceased operating several years ago.
The mill closure analysis is performed on a model mill basis. Since
a preliminary investigation of production cost increases indicates that
some mills may be significantly affected by tailings disposal costs under
certain control requirements, we have performed a discounted cash flow
analysis of several model mills. This analysis relates the control costs
to the mill's cash flow to determine if the project is affordable. In
this manner, we have assessed the likelihood of each model mill continuing
operations while incurring various levels of tailings disposal costs.
A.2 Model Mills
The analysis is performed on a model mill basis. The model mills
provide an indication of the degree of economic impact on all mills in the
industry by incorporating the major characteristics of various segments of
the industry. There are a large number of variables that can differ among
actual mills. The models are not intended to provide an exact duplication
of any actual or planned mill. The model mills differ according to
capacity, remaining life, and size of existing tailings pile.
On the basis of capacity, the model existing mills are segmented into
three categories, small, medium, and large, with capacities of 900, 1800,
and 3600 metric tons of ore per day, respectively. New mills that may be
built are represented by the medium size model mill.
Existing and new mills in the industry may vary considerably in their
operating life. For example, some existing mills may be near the end of
their operating life, while other existing mills have been operating for
more than 20 years and may still have a long remaining operating life.
For the model existing mills, the operating lives analyzed are limited to
three choices in order to present a manageable number of models, but which
are realistic; a model existing mill may have a remaining useful life of
five, ten, or fifteen years. A model new mill is assumed to have a useful
life of fifteen years. The significance of the remaining life of a mill
A-l
-------
is that a "short" remaining life permits less time to recover the costs of
control than does a "long" remaining life. Also, the remaining life,
together with the capacity of the mill and the capacity utilization rate,
determines the amount of future tailings that will be generated by an
existing mill.
Operating lives of five, ten, and fifteen years are chosen for
several reasons. First, although some mills may have operating lives of
less than five years or more than fifteen years, most existing mills
should be within this range. Second, any existing mill with a remaining
useful life of considerably less than five years is likely to experience a
significant economic impact. 'Third, the difference between five years and
fifteen years is sufficiently large to indicate differential control cost
impacts based on remaining useful life. For economic reasons, a typical
new mill is expected to have an operating life of approximately fifteen
years, or longer (NRC80, EMJ79). Finally, it is difficult to determine
precisely the life of a mill due to changing market conditions, the
discovery of new ore deposits, changing technology, and so on. Therefore,
five, ten, and fifteen year lives are believed to be reasonable.
The size of actual existing tailings piles varies considerably.
Existing tailings piles are represented in the models by one of three
tailings pile size categories: two million metric tons, seven million
metric tons, or twenty-two million metric tons. A new model mill is
projected to produce a tailings pile of 8.4 million metric tons over a
fifteen year operating life.
Based on these differential model mill characteristics, there are 27
(3x3x3) possible model existing mills to be analyzed. After examining the
characteristics of the 24 mills which were either operating or on standby
(as of January 1983), we placed each of them in one of 16 model mill
categories. Table A.I shows a generalized matrix of the three model mill
variables (capacity, remaining life, tailings pile size) and the number of
licensed mills that fit into each category. Tables A.2, A.3, and A.4 show
the categorization of these mills according to capacity, tailings pile
size, and remaining life.
Estimates of the remaining lives of mills had to be judgmentally
determined since it is highly uncertain how long mills will continue to
operate. Each of the regulatory agencies which license the mills was
contacted and asked their opinion about the remaining life of each mill
that they license. The response from these regulatory agencies indicated
that virtually all the existing mills, including the ones on standby, had
at least five years of production remaining while many of the mills had
fifteen years or greater remaining. These estimates were supplemented,
where possible, on information contained in corporate annual reports,
Securities and Exchange Commission 10-K Reports, the DOE Commingled
Uranium Mill Tailings Study (DOE82), or articles in trade journals. Even
though there is presently a great deal of consolidation in mill ownership
taking place, the mill and the surrounding ore deposits have an economic
life remaining regardless of which company operates the mill.
A-2
-------
•^
CO
wx
CO
1 — 1
rH
53
60
C
4-1
CO
•tH
X
ta
o
*^
'rj
,i i
CO
S3
T)
Ol
N
i — 1
CO
Ol
e
01
o
f-H
"^
Ol
l-~l
CO
H
CO
rH
*— ' ^"i
•r-l 4-1
S3 -H
rH O
CO 60 CO
4-* C ^
O -H CO
H 4J 0
CO
X PP
W
"P
vc
0
i — i
* —
0>
N
C/D
0)
rH
• H
PM
CO
60
C
• H
rH
CO
H
CN
CN
-
CN
60
C
'e ^"» ^*l ^t ^> ^1
l/"^ f^ l/^ l/^ f^ LO W*l
f— 1 i — 1 i — 1 rH
O O 0
o o o
CTi 00 vO
rH on
CO
t-l
CO
IA
s^f
CM
on
CN
i-H
o\
01
CO N
rH .H
rH r/3
••-1
S3 01
rH
60 -H
C P i
•H
4-1 CO
CO 60
• ^ C
X *H
W rH
••-I
i— i cfl
CO H
4-1
O >->
EH PQ
CO
60
C
•r-l
rH
• H
CO
^J
EH
2C
C
O
• 1-1
rH
rH
•H
E
CM
4-1
• H
|5
CO
rH
rH
'e
T3
0)
CO
fj
0)
o
•r*4
i— i
o
JJ
4J
CO
Ol
^3
3
rH
y
X
W
•
on
oo
ON
i— l
^
J.J
CO
3
C
CO
•">
14-1
0
CO
^
^v
CO
•— '
.
4J" O
e o
•H -H
O X
Cu, 01
23
co £
Oi
0) Ol
60 C
•o
W CO
•^^ co
60
C rC
•H U
4J -H
CO J=
M 3
a>
D-rH
O rH
•H
H E
01
60 T3
C 0)
O CO
rH C
0 0
e -H
rH
Ol
I-l O)
01 C
& 0
4J *O
CO C
J2 CO
4J
CO CO
01 CO
rH X
•H 01
D-EH
•
i^-
•
^J
T3
C
cd
•>
CO
•
•^J
«s
CM
*
^ti
CO
0)
1— 1
r>
CO
H
»»
0)
y
M
3
0
C/3
A-3
-------
••^
.-^
4-1
•rl
o
cfl O
ex
CO ™
O w
^ rtl
^0 *
P^
CO
1— 1 »
1—1 r^
•H ^
s
M-l
60 °
£
•H ,2
"1
•rl "
X M
W.H
r<
• """"^
CN ^
>
4-J
•H C
C >1 •!-)
•rl O> CO
CX ^ (-1 CO
r-l CO M-l PQ
I-l i-H rH >4-l
CO Q) 1— 1 OJ >^
01 £S -H »-j a)
r-l -^ EC >, x^ r-l
O 60 IJ
3 I-l CO I-l )-l -rl
J2 CO CO QJ CO rC
OJ 01 O C 0) C/3
f> CO I— 1 W 1— 1 ^^
t-l i-H O O CO
OJ Q) 3 M • 3 l-i O
co 3 £Z QJ C ^; oj »ri
QJ pt< -o 4-1 T3 E
pssc; ccgcco
I O >~. J-i T-I M -H 4-1
O l-i 600)14-1 >~,0)U-i o
_(*] 0)QJ C04-1 CJC04-14-*
O^COJCOOQJCOQJCO
WCJW|2P-ipiSP-iP-''— i
."^
y
oooooooooo
ooooooooo
l/^ CO 00 CO CO OO LO VO *J"
•\*^«\«v«s«s*^Vt*^
i — I CN i— I i — iCNi — 1 i— li — li — 1
^— V
CO
i-H
y~t I-H
C "-1
CO B
CO CO
H to co
P QJ (2 O
<^s u Q ^-^
M U
QJ 3 -rl QJ
TJ O 1-1 TJ
• rl CO Q) T3 -rl
O 0 *H 4-J r-l CO QJ PJ CO
O E3 Pi *C p [ Q fTj >— i rH
r-l
g
OOOOOOOO OO
oooooooo
-| ^sj p^ fO ("^ *H^ Q>^ fV)
•s ^ *. *^
r-< i— 1 I— 1 r-l
4-1
Cfl
JS
4-1
^v
CO •
03 ^3
X Q)
Ol 4-1
EH tfl
rl
^ 01
4-j ex
c o
•rH
O M
O< OJ
>i QJ
CO C
Pi
CO
TD cfl
C f
CO
" O
CO .H
O &
CO s~^
Q 0
0
^C -rl
4J X
3 Q)
0 g
C/D
Jj
•V QJ
4J j^:
c
o -
e N
01 Ol
60 3
T3 tT
W rl
y
CO v^
I-H
1— 1 t-H
•H •— 1
^ 'e
•o
0) 13
CO QJ
C co
QJ C
U OJ
•H U
rH .H
rH
0
& Q)
4J C
O
CO
OJ T3
*U C-
3 CO
,__(
O 60
X (3
W T-I
4-1
CO
• rl
ro 0)
oo ex
CT. O O
I— 1 r-l
V-l •
>^ OJ CM
)-l 60
Cfl C OJ
30 r-(
C r-l ^2
CO to
>-> 0 H
C
III
O Q) ••
rl 0)
CO 0> U
*-N 3
cfl O
N-' OO
A-4
-------
CO
<— •'
fl)
*X"
N
• rH
02
fl)
VU
rH
•rH
P-.
CD ^-N
too co
C C
,_i f-\
•r-t v^
i r i
rH f-H
CO o
H «H
W
IX 4J
,0 OJ
CO ^
r— ' M-t
_j O
r^ \j
-H
S co
* c
too o
C -H
•r-l rH
4-1 rH
CO *rH
I ^H
ri S
rs >>— '
w
m
o>
i— i
fi
r*-1
crt
*U
H
CM
CN
r^
CN
>,
c
tfl
a
o
CO
toO
C 0)
•rH rH
rH .H
•H PH
CO
H
tX
C
CO
(X
o
u
CD
toO
C 0)
«r-( ...-I
rH -H
•H PH
CO
EH
>,
C
cfl
CX
O
CO
60
C 0)
•H r-l
1 ,_J
r~t *r^
•H £<
CO
H
OJ
OJ OJ
CO 0 &
-O 0 cfl
C S 4J
O 1 co
0 r-l 0)
Cfl t-l g
C OJ 5
< « U3
CO
rH
rH
•H
r>- vo CN s
• • •
o r-^ ON n
CN CN i— 1
/*^
>,
4-1
•H
u ^
>i CD «H
fl) rH CO
*~+, ^N t-l rH CO
C CO U-l «H PQ
Cfl rH ^ KH EE C
> rH M fl) >, O
CO -H fl) r-) (0 Q) .H
l-l CC>>>^-'rH t-l
^ CJ Cfl fl) CO f, O
flJQJ -r-IOCirJaJaJC/) rH
rQCl) l-l>— -(dDrH'Ov-' O.
• H C 0) T3 CJ -H CO X
,00 gr('>9rQr^COJCM-l01-l
OOQt(UrC^O4->Oj3l-i(U
•iHCrHTD4JOXCD.H4J4->C
CO-UflJCOOXflJCCflCU'r-l
r3o rH CO 0
t-l J3 0 rH CD
0) O 3 fl) 0)
co 1-1 g ys 3 pi
0) 3 O Pn
Pi rC c too C 3
tJ 1 O O rH )J &s CO
Q)O>-'tJ< fl)toOO)
4-1 -H > C 4-1 t-i 4-1
w^cjajo^coojcfl
O OZXi'H CO 0) CrH
cjw^upinjswpH
CO
1— 1
rH
• t-l
r~-OscNrococ7NrOrHO |S
•— 1 i— ( CO CO CN CN CN •— 1 O |OS
fl)
c
o
CD TJ
0) c
rH Cfl
•r-l
a. too
c
CD -r-l
too 4-1
C CO
•H I-l
rH 4)
•H CX
cfl o
4-1
)-,
H flJ
S M
c
C 0
0 rH
•H •
rH O T3
rH (2 D
•r-l 4J
g Q) Cfl
rJ 1-1
CN fl) 01
* ex
rC 0
4-> n
^^ H— '
•rJ O (-1
^ -H fl)
rC >
CO ^ fl)
rH ^ C
r— 1 /— v
•H CO CO
g cfl cfl
X rC
T3 ClJ
OJ H rC
co CJ
C -'H
QJ 4J ^3
o C &
•r— 1 •!-!
i— I O ^*-
fi4 O
O CJ
!S r^'l-l
4J CO X
pi Q)
m "5"
to ^i
OJ T3
13 C S
3 TO fl)
1 — ' z
o •-
X cfl -
W 4-1 N
O 0)
^ 3
• co a*
ro O t-i
00 TO
o\ fl s o
rH 4_) rH
>-, O rH CN
t-l CO rH
CO -H OJ
3 - g rH
Pi 4-> fl
TO C T) TO
r-J O fl) H
g CO
U-i D C
o too a) ••
•a o a)
0] W -H CJ
^C ^^ rH t-l
/-N 3
cfl O
^ C/3
A-5
-------
60
C
• H
C
BS
CO
co
W
60
C
CO
T-l
X
42
CO
H
CO
l-i
cfl
Ol
r*"*
LO
r— 1
CO
Vl
CO
cu
o
1— 1
CO
I-l
CO
Ol
^H
m
•
0.
I-l
o
cj
I-l
0>
4-1
4-1
o
CJ
x^
C
to
^
CO
V-i
p")
S— X
01
•o
• 1-1
I-l
CO
CJ
C
O
• H
C
JD
CO
1— 1
r—l
•H
P2
CO
CO
O
0>
*O
-r-l
rjQ
M
CO
U
c
o
c
CD
OJ
P
J_(
CU
CO
CO
fy]
i
o
•H
42
O
CrO
M
CU
CU
12
O
•r-l
PH
1
O
o
o
c
0
CJ
CO
•o
c
o
o
Cfl
c
01
Ol 3
O fK
O
E >•>
1 60
M )-i
t-i 0>
0> C
fryj W
^J
T-l
C
• 1-1
a
i— i
1—4
0)
pg
^x
M
CO
01
i— I
O
3
K
C C
>-i O
01 t-l
4-1 >
co cu
0) ,c
S CJ
/•— x
M
CO PQ
60 r-l
r-l 1 — 1 ^
Ol -i-l CU
C P2 r-l
W C Vi
CO CO -r-l
C O cfl J2
•H -H O CO
4-1 01 CO
c e n M o
g 3 < 01 Ol T-I
O O | T) T3 6
60 S r-i C C O
r-l Cfl -rJ .H 4J
<3 r^i CO rJ M-l M-l O
4«i Cfl CU ,C 42 rJ
O O i— 1 T3 4-1 4-1 4->
•H O 4-1 0) Cfl tO CU
pi pi
€ c
01 CO
60
T3 60
W C
'*—' «r-(
4-1
CO CO
r-l I-l .
r-l Ol -O
•1-1 cx cu
E o 4-i
co
T3 H V-i
Ol 0) 0)
co 60 a.
ceo
Ol O
O rH }-l
•i-l 4)
r-l O >
C CU
0 C
& o>
4-1 I-l CO
0) to
to 3 42
CU
T3 43 43
300
I-l T-l T-l
0 42 43
X IS S
X-s /~s
co o
. cfl cj
m X -H
OO 0) X
cy> H cu
-" ^S
r^ 4~* S
t-i P 0)
tfl -i-l 3
3 0
C P-4 **
CO N
"-)>-. 0)
CO 3
0 H
•a to
CO C S
^^ cQ x« x
X— s.
CO
A-6
-------
A.3 Control Costs
The control costs for this analysis are the costs of disposing of the
mill tailings. The detailed development of the model pile disposal costs
has been explained in Appendix B of the FEIS and will not be repeated
here. There are three major categories of control costs. The first
category is the cost to control existing tailings piles. The second
category is the cost to control future tailings that an existing mill will
generate during the remaining life of the operation. The third category
is the cost to control tailings generated by a new mill. The cost to
control an existing tailings pile is shown in Table A.5 for each economic
impact case and model pile size.
Table A.6 shows for each impact case the unit cost and the total cost
for a model existing mill to control future tailings. The cost to control
future tailings is calculated by multiplying the cost of control per
metric ton of tailings by the tons of tailings the model mill will
generate during the remaining years of its assigned operating life. The
future generation of tailings is a function of the mill's capacity and its
capacity utilization rate (discussed in Section A.6).
Additional tailings that are generated by an existing mill can be
controlled in one of two major ways, with different costs associated with
each. First, future tailings can be added to existing piles, and
therefore, both can be controlled in the same manner. This is assumed in
impact cases 1 through 13. Second, future tailings can be controlled in
the same manner as tailings generated by a new mill and would require a
new pile to be started. This is assumed in impact cases 26 through 37.
The unit cost assumed for cases 1 through 13 is the appropriate
incremental cost of disposal of tailings which have been added to existing
piles. These incremental unit costs have been estimated from the model
existing pile disposal costs. The unit cost for Cases 26 through 37 is
the average unit cost calculated from the model new pile disposal -cost for
the appropriate disposal method. The derivation of both of these types of
unit costs is presented in Chapter 5.
Table A.7 shows the cost of control for the model new mill. The
model new mill has a useful life of fifteen years and generates
8.4 million metric tons of tails.
Tables A.8a, A.8b, and A.8c show the combined control costs to
control an existing tailings pile at a model mill, plus the control costs
for future tailings generated during the remaining life of the operation.
In actuality, no small or medium-sized mills have a tailings pile in the
22 million metric ton category. Therefore, no control costs are shown for
a 22 million metric ton tailings pile at a small or medium-sized model
mill.
A-7
-------
Table A.5. Control Costs for Model Existing Tailings Piles
(Millions of 1983 Dollars)
_ _ Tailings Pile Size
Economic Impact 7 2—
Case 2 (10 MT) 7 (10 MT) 22 (106 MT)
1 -
2, 26 4.2 6.4 10.8
3, 27 6.9 10.4 17.3
4, 28 9.2 14.0 23.0
5, 29 3.2 6.3 13.6
6, 10, 30, 34 5.9 10.5 20.6
7, 11, 31, 35 8.3 14.3 26.8
8, 12, 33, 36 10.9 18.5 33.8
9, 13, 33, 37 13.3 22.2 40.0
A-8
-------
s
ff
oa
•H
X
a>
Tl
CO
^"x
a) w
U
•u «t
nj H
^H
CO O
W)Q
a
•H CO
H 00
UH
g O
3 0)
4^ a
3 O
O
M
4J
0
O
U
co
8
o
0)
cfl
•^
r**
CO
m
>H
O
CO
m
cd
^-s
CM
co
co
>•
co
m
o
•H 4-1
9 o )" ON co ON
ooHi-Hcosrsrmmsrsrmm
C3CDOOOOOOOOOOO
OCMtOcOCnoHCMCOOHCMCO
OOOOOHrHi-tHHHHrH
invovor^i
ooooooooooooo
ocMcosrHcMcoinr^cMcoinr^
CJOOOHHiHHHHHHH
oencMvoi^-sroooinsfoooin
ooHrHsrinvovot^invovot^
C3OOOOOOOOC3OOO
Or-trHCMmvOvOhNOOvOvOr^OO
ooooooooooooo
oencMvor^stoooinst-oooin
ooiHHsrin^Dvor^invovor^
ooooooooooooo
H CM co sr in
co en o H CM co
H H H H
H
a
a
o
•H
a
(U
H
oo
60
a
DO
a
•H
4J
CO
fl
0)
0)
N
•H
CO
/-\
(0
H
a
o
•H
H
H
00
ff
a
d
o
•H
4J
2
a)
g
A-9
-------
CO
0)
CO
M
CO
CQ
oo"
o
o
CO
3
,0
•
v£>
•
a\
ooHiH^-^-sj-irim-fl-^-u-tin
OOOOOOOOOOOOO
OCMCOCOOOa>OHCMO>OrHCM
OOOOOOHHHOHrHrH
OOxOOiOON^CyiCOCyi-a-C^COCn
ooHrHT*sa-ir)ro>*-cNvoi's«-3'Ocou"*-3'Ocoir»
OrHH^utvovor^invovot^
OOOOOOOOOOOOO
O«*ir»r^rH«*t^H-*-*f^H-*
ooooc^icgeMcnooeMCMcocn
ooxoivor^-*ooo'Osrooo'O
oOiHiH-*u->ovor^io*Osor~»
C3OCDOOOCJOOOOOCD
OCMC»vor^-4-ooo'O«*ooo'o
OOHH-*u">>'0OrsU">l^*0l^
OOOOOOOOOOOOO
H i-« H H
§
* S
-------
H
W
OOU^ON-4p^COC^s^'C7^0O(j>-d'OOHcoco-*sf'An-s--*ir>
o-*-*CT>coc^
OOHrHCO-*-*U-llO^~*lOlT)
OOOOOOOOOOOOO
O^-iOvOiOOOOCMiOOOOC-lul
C3OOOH «^ CJN CO CT> >^ ON CO CJN
OOHrHCO-*-*'O'n>*-*''1lO
OOOOOOOOOOOOO
ocor^csiioio^"iri^fio^'ir*>^>
OHrHcMiOt^aoaiC3i^ooor^
.OOOOOOOOOOOOO
Ovtf-"ir~-ocMu">oOr-icMmcOi-f
OOOOCSCMCSICMCOCMCMCMCO
OCTNCMvoi-^srooom-^-ocoiri
OOrH^H-*lOvOvOr^lOvDvOI>.
OOOOOOOOOOOOO
* 3
-------
en
•
ro
00
•
CM
•
-*
r-ti-H'-IHt-H.-lt-i'HCN
-OrH
I
co
•H ^~-
4J ca
HI M
W
o
a
ca oo
apo>
OH
•H o
to
HCO
3 H
g
a
o
CO
cS
8
H
CJ
•H 4J
a o «u
O Cd CO
d
o
•H
CO
no
d
•H
H
2
cu
DO
Cu
A-12
-------
Table A.7. Control Costs for a Model New Tailings Pile
(Millions of 1983 Dollars)
Economic Impact Tailings Pile Size
Case 8.4 (x 106 MT)
1
2, 26
3, 27
4, 28
5, 29
6, 30
7, 31
8, 32
9, 33
10, 34
11, 35
12, 36
13, 37
1.3
22.9
26.5
30.5
22.9
27.5
31.5
35.8
39.9
40.4
43.6
47.6
51.2
A-13
-------
Table A.8.a. Total Disposal Cost for a Small Model Existing Mill
(Existing Tails plus New Tails in Millions of 1983 Dollars)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.0
4.3
7.0
9.4
3.7
6.5
8.9
11.6
14.1
6.5
8.9
11.6
14.1
7.0
10.2
13.0
6.0
9.3
12.2
15.3
18.2
10.9
13.7
16.8
19.6
2(a)
10
YRS
0.0
4.4
7.2
9.6
4.3
7.1
9.6
12.4
15.0
7.1
9.6
12.4
15.0
10.3
14.0
17.3
9.3
13.2
16.7
20.5
24.0
16.7
19.9
23.6
27.0
15
YRS
0.0
4.5
7.3
9.8
4.8
7.8
10.4
13.3
15.9
7.8
10.4
13.3
15.9
13.7
17.9
21.8
12.7
17.3
21.4
25.7
29.8
22.6
26.4
30.6
34.5
5
YRS
0.0
6.5
10.5
14.2
6.7
11.0
14.8
19.1
22.8
11.0
14.8
19.1
22.8
9.2
13.7
17.8
9.1
13.9
18.2
22.9
27.1
15.5
19.7
24.4
28.5
7w
10
YRS
0.0
6.6
10.7
14.3
7.2
11.5
15.4
19.7
23.5
11.5
15.4
19.7
23.5
12.5
17.5
22.1
12.4
17.8
22.7
28.1
32.9
21.3
25.9
31.2
35.9
15
YRS
0.0
6.7
10.9
14.5
7.7
12.0
16.0
20.3
24.3
12.0
16.0
20.3
24.3
15.9
21.4
26.6
15.8
21.9
27.4
33.3
38.7
27.2
32.4
38.2
43.4
of existing tailings pile, million MT.
A-14
-------
Table A.8.b. Total Disposal Cost for a Medium Model Existing Mill
(Existing Tails Plus New Tails in Millions of 1983 Dollars)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.0
4.4
7.1
9.5
4.2
7.0
9.5
12.3
14.9
7.0
9.5
12.3
14.9
9.9
13.5
16.7
8.9
12.7
16.1
19.8
23.2
15.9
19.1
22.7
26.0
2(a)
10
YRS
0.0
4.6
7.4
9.9
5.3
8.3
11.0
14.0
16.7
8.3
11.0
14.0
16.7
16.4
21.1
25.5
15.4
20.6
25.1
30.0
34.6
27.5
31.6
36.3
40.7
15
YRS
0.0
4.8
7.7
10.3
6.5
9.7
12.5
15.6
18.5
9.7
12.5
15.6
18.5
23.2
28.9
34.5
22.2
28.7
34.4
40.6
46.4
39.4
44.4
50.4
55.7
5
YRS
0.0
6.6
10.7
14.3
7.1
11.4
15.3
19.6
23.4
11.4
15.3
19.6
23.4
12.1
17.0
21.5
12.0
17.3
22.1
27.4
32.1
20.5
25.1
30.3
34.9
7(a)
10
YRS
0.0
6.8
11.0
14.7
8.1
12.5
16.5
20.9
24.8
12.5
16.5
20.9
24.8
18.6
24.6
30.3
18.5
25.2
31.1
37.6
43.5
32.1
37.6
43.9
49.6
15
YRS
0.0
7.0
11.3
15.0
9.0
13.6
17.7
22.2
26.3
13.6
17.7
22.2
26.3
25.4
32.4
39.3
25.3
33.3
40.4
48.2
55.3
44.0
50.4
58.0
64.6
of existing tailings pile, million MT.
A-15
-------
Table A.S.c. Total Disposal Cost for a Large Model Existing Mill
(Existing Tails Plus New Tails in Millions of 1983 Dollars)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
2(a)
5
YRS
0.0
4.6
7.4
9.9
5.2
8.1
10.8
13.7
16.4
8.1
10.8
13.7
16.4
15.5
20.0
24.3
14.5
19.5
23.9
28.6
33.1
25.9
29.9
34.5
38.6
10
YRS
0.0
5.0
8.0
10.6
7.4
10.7
13.7
17.0
20.0
10.7
13.7
17.0
20.0
28.7
35.2
41.8
27.7
35.3
42.0
49.2
55.9
49.1
54.9
61.8
68.0
15
YRS
0.0
5.5
8.6
11.4
9.7
13.4
16.7
20.4
23.7
13.4
16.7
20.4
23.7
42.2
5U.B
59.8
41.2
51.5
60.5
70.3
79.4
72.9
80.6
89.8
98.2
5
YRS
0.0
6.8
10.9
14.6
7.9
12.3
16.3
20.7
24.7
12.3
16.3
20.7
24.7
17.7
23.5
29.1
17.6
24.1
29.9
36.2
42.0
30.5
35.9
42.1
47.5
7(a)
10
YRS
0.0
7.2
11.6
15.3
9.8
14.4
18.7
23.3
27.5
14.4
18.7
23.3
27.5
30.9
38.7
46.6
30.8
39.9
48.0
56.8
64.8
53.7
60.9
69.4
76.9
15
YRS
0.0
7.7
12.2
16.1
11.7
16.6
21.1
25.9
30.4
16.6
21.1
25.9
30.4
44.4
54.3
64.6
44.3
56.1
66.5
77.9
88.3
77.5
86.6
97.4
107.1
5
YRS
0.0
11.3
17.8
23.5
14.3
21.3
27.5
34.7
40.9
21.3
27.5
34.7
40.9
22.1
30.4
38.1
24.9
34.2
42.4
51.5
59.8
40.6
48.4
57.4
65.3
22(a)
10
YRS
0.0
11.8
18.4
24.0
15.1
22.1
28.4
35.8
42.0
22.1
28.4
35.8
42.0
35.3
45.6
55.6
38.1
50.0
60.5
72.1
82.6
63.8
73.4
84.7
94.7
15
YRS
0.0
12.3
19.0
24.5
16.0
23.0
29.3
36.9
43.1
23.0
29.3
36.9
43.1
48.8
61.2
73.6
51.6
66.2
79.0
93.2
106.1
87.6
99.1
112.7
124.9
)Size of existing tailings pile, million MT.
A-16
-------
A.4 Production Cost Increases
One way to gain a perspective on the degree of impact that the
control costs may have on the model mills is to calculate the percentage
change in production costs due to tailings disposal. This relatively
simple estimation will provide an indication of both how significant the
costs are and how the impacts vary by model mill. Table A.9.a shows the
control cost increase for the small existing mill expressed as dollars per
metric ton of ore milled (assuming a remaining life of 5 years, 10 years,
or 15 years). This unit control cost is derived by dividing the total
costs shown on Table A.8.a by the approximate number of metric tons of
future production as shown on Table A.9.a. Table A.9.b expresses this
cost increase in terms of dollars per pound of u^Og produced.
Assuming an average ore grade of .1 percent and a recovery rate of
93 percent, one metric ton of ore yields about two pounds of l^Og.
Therefore, the cost per metric ton of ore divided by two equals the cost
per pound of 0308- Finally, Table A.9.c shows the percentage increase
in production cost assuming a base production cost (excluding profit) of
$30 per pound of l^Og. For the lack of company-specific cost data, we
have assumed that the $30 per pound production cost applies uniformly to
all mills. Tables A.10 (a,b,c) and A.11 (a,b,c) present the same type of
information for the medium and large existing mills. Table A.12 presents
the same information for the model new mill.
Upon examining the estimated production cost increases, it is evident
that for some economic impact cases the increases are substantial. Also,
some of the model mills are affected significantly more than others.
Because the control costs may be significant, we conclude that a plant
closure analysis is necessary to determine the economic impact on the
mills since it is unlikely that they can pass-through a large part of the
control cost to their customers.
A.5 Discounted Cash Flow Analysis
The impact of the control costs on the model mills can be assessed
using the discounted cash flow (DCF) technique. DCF is a financial
analysis technique that indicates if a project is justified on economic
grounds. Among financial analysis techniques, DCF is the most
comprehensive due to two principal advantages over most other financial
analysis techniques. First, DCF considers the time value of money.
Second, DCF considers the cash flow items that are applicable to a
project, rather than just the earnings applicable to a project. Other
than earnings, the principal cash flow items are depreciation and
depletion. Although depreciation and depletion are legal business
expenses for income tax purposes, they do not represent actual cash
expenses for the firm for the year. Therefore, in order to calculate cash
flows, depreciation and depletion are added to earnings.
A-17
-------
Table A.9.a. Production Cost Increases for a Small Model Existing Mill,
^/Metric Ton of Ore
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
i.o(b)
5 YRS
0.00
4.13
6.76
9.01
3.55
6.22
8.58
11.17
13.54
6.22
8.58
11.17
13.54
6.77
9.79
12.48
5.80
8.95
11.73
14.75
17.54
10.49
13.18
16.15
18.89
2u>
2.2(b)
10 YRS
0.00
1.96
3.19
4.26
1.90
3.17
4.30
5.54
6.68
3.17
4.30
5.54
6.68
4.60
6.23
7.73
4.15
5.90
7.45
9.12
10.68
7.44
8.89
10.52
12.02
3.5
15 YRS
0.00
1.30
2.10
2.80
1.39
2.23
2.98
3.81
4.57
2.23
2.98
3.81
4.57
3.93
5.14
6.27
3.65
4.97
6.13
7.39
8.57
6.50
7.57
8.80
9.92
i.o(b)
5 YRS
0.00
6.25
10.13
13.62
6.45
10.54
14.25
18.33
21.95
10.54
14.25
18.33
21.95
8.88
13.16
17.10
8.79
13.37
17.51
22.06
26.11
14.91
18.95
23.46
27.45
7u>
2.2(b)
10 YRS
0.00
2.94
4.76
6.39
3.20
5.12
6.86
8.77
10.48
5.12
6.86
8.77
10.48
5.58
7.79
9.87
5.53
7.95
10.12
12.51
14.64
9.49
11.56
13.91
15.99
3.5(b)
15 YRS
0.00
1.93
3.12
4.17
2.20
3.46
4.60
5.84
6.97
3.46
4.60
5.84
6.97
4.56
6.14
7.65
4.54
6.29
7.86
9.58
11.13
7.83
9.30
10.98
12.47
(&)size of existing tailings pile, million MT.
(b)puture production of uranium, million MT of ore.
A-18
-------
Table A.9.b. Production Cost Increases for a Small Model Existing Mill,
$/Pound of U308
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.00
2.07
3.38
4.51
1.77
3.11
4.29
5.58
6.77
3.11
4.29
5.58
6.77
3.38
4.90
6.24
2.90
4.47
5.87
7.37
8.77
5.24
6.59
8.08
9.44
2(a)
10
.YRS
0.00
0.98
1.60
2.13
0.95
1.58
2.15
2.77
3.34
1.58
2.15
2.77
3.34
2.30
3.11
3.87
2.08
2.95
3.72
4.56
5.34
3.72
4.44
5.26
6.01
15
YRS
0.00
0.65
1.05
1.40
0.69
1.12
1.49
1.91
2.29
1.12
1.49
1.91
2.29
1.97
2.57
3.14
1.82
2.48
3.07
3.70
4.29
3.25
3.79
4.40
4.96
5
YRS
0.00
3.12
5.07
6.81
3.23
5.27
7.12
9.16
10.97
5.27
7.12
9.16
10.97
4.44
6.58
8.55
4.39
6.69
8.75
11.03
13.05
7.46
9.47
11.73
13.73
7(a)
10
YRS
0.00
1.47
2.38
3.19
1.60
2.56
3.43
4.39
5.24
2.56
3.43
4.39
5.24
2.79
3.89
4.93
2.77
3.98
5.06
6.25
7.32
4.74
5.78
6.96
7.99
15
YRS
0.00
0.96
1.56
2.09
1.10
1.73
2.30
2.92
3.48
1.73
2.30
2.92
3.48
2.28
3.07
3.83
2.27
3.14
3.93
4.79
5.56
3.91
4.65
5.49
6.24
(a)Size of existing tailings pile, million MT.
A-19
-------
Table A.9.c.
Production Cost Increases for a Small Model Existing Mill,
Percentage Increase'3'
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.0
6.9
11.3
15.0
5.9
10.4
14.3
18.6
22.6
10.4
14.3
18.6
22.6
11.3
16.3
20.8
9.7
14.9
19.6
24.6
29.2
17.5
22.0
26.9
31.5
2(b)
10
YRS
0.0
3.3
5.3
7.1
3.2
5.3
7.2
9.2
11.1
5.3
7.2
9.2
11.1
7.7
10.4
12.9
6.9
9.8
12.4
15.2
17.8
12.4
14.8
17.5
20.0
15
YRS
0.0
2.2
3.5
4.7
2.3
3.7
5.0
6.4
7.6
3.7
5.0
6.4
7.6
6.6
8.6
10.5
6.1
8.3
10.2
12.3
14.3
10.8
12.6
14.7
16.5
5
YRS
0.0
10.4
16.9
22.7
10.8
17.6
23.7
30.5
36.6
17.6
23.7
30.5
36.6
14.8
21.9
28.5
14.6
22.3
29.2
36.8
43.5
24.9
31.6
39.1
45.8
7Cb)
10
YRS
0.0
4.9
7.9
10.6
5.3
8.5
11.4
14.6
17.5
8.5
11.4
14.6
17.5
9.3
13.0
16.4
9.2
13.3
16.9
20.8
24.4
15.8
19.3
23.2
26.6
15
YRS
0.0
3.2
5.2
7.0
3.7
5.8
7.7
9.7
11.6
5.8
7.7
9.7
11.6
7.6
10.2
12.8
7.6
10.5
13.1
16.0
18.5
13.0
15.5
18.3
20.8
(a)Assumes a base production cost (excluding profit) of $30 per pound
of U30s.
of existing tailings pile, million MT.
A-20
-------
Table A.10.a.
Production Cost Increases for a Medium Model Existing Mill
$/Metric Ton of Ore
IMJUUUU1XC
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
2.1(b)
5 YRS
0.00
2.11
3.44
4.59
2.01
3.38
4.59
5.92
7.15
3.38
4.59
5.92
7.15
4.75
6.47
8.06
4.27
6.11
7.74
9.50
11.15
7.65
9.18
10.91
12.49
4.5(b)
10 YRS
0.00
1.03
1.66
2.21
1.18
1.85
2.45
3.11
3.71
1.85
2.45
3.11
3.71
3.66
4.69
5.68
3.44
4.59
5.60
6.69
7.71
6.12
7.04
8.10
9.06
7.0(b)
15 YRS
0.00
0.69
1.11
1.48
0.93
1.39
1.79
2.25
2.66
1.39
1.79
2.25
2.66
3.33
4.15
4.95
3.19
4.12
4.94
5.83
6.66
5.66
6.38
7.23
8.01
2.1(b)
5 YRS
0.00
3.17
5.13
6.88
3.42
5.49
7.37
9.43
11.27
5.49
7.37
9.43
11.27
5.80
8.16
10.36
5.76
8.32
10.63
13.16
15.43
9.86
12.07
14.57
16.77
4.5(b)
10 YRS
0.00
1.52
2.45
3.27
1.79
2.78
3.68
4.65
5.54
2.78
3.68
4.65
5.54
4.15
5.47
6.75
4.13
5.61
6.94
8.38
9.70
7.15
8.38
9.79
11.04
7.0(b)
15 YRS
0.00
1.01
1.62
2.16
1.29
1.95
2.54
3.19
3.78
1.95
2.54
3.19
3.78
3.65
4.65
5.64
3.63
4.78
5.80
6.92
7.94
6.32
7.24
8.32
9.28
(a)Size of existing tailings pile, million Ml.
(b)Future production of uranium, million MT of ore.
A-21
-------
Table A.lO.b.
Production Cost Increases for a Medium Model Existing Mill
$/Pound of
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.00
1.06
1.72
2.29
1.00
1.69
2.30
2.96
3.57
1.69
2.30
2.96
3.57
2.37
3.24
4.03
2.13
3.06
3.87
4.75
5.57
3.82
4.59
5.45
6.25
2u>
10
YRS
0.00
0.51
0.83
1.10
0.59
0.93
1.22
1.55
1.86
0.93
1.22
1.55
1.86
1.83
2.35
2.84
1.72
2.29
2.80
3.35
3.86
3.06
3.52
4.05
4.53
15
YRS
0.00
0.35
0.56
0.74
0.46
0.69
0.90
1.12
1.33
0.69
0.90
1.12
1.33
1.66
2.07
2.48
1.59
2.06
2.47
2.91
3.33
2.83
3.19
3.62
4.00
5
YRS
0.00
1.58
2.57
3.44
1.71
2.75
3.68
4.71
5.63
2.75
3.68
4.71
5.63
2.90
4.08
5.18
2.88
4.16
5.31
6.58
7.71
4.93
6.03
7.28
8.39
7(a)
10
YRS
0.00
0.76
1.22
1.63
0.90
1.39
1.84
2.33
2.77
1.39
1.84
2.33
2.77
2.08
2.74
3.38
2.06
2.81
3.47
4.19
4.85
3.57
4.19
4.89
5.52
15
YRS
0.00
0.50
0.81
1.08
0.65
0.97
1.27
1.59
1.89
0.97
1.27
1.59
1.89
1.82
2.32
2.82
1.82
2.39
2.90
3.46
3.97
3.16
3.62
4.16
4.64
of existing tailings pile, million MT.
A-22
-------
Table A.lO.c.
Production Cost Increases for a Medium Model Existing Mill
Percentage Increase^)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0.0
3.5
5.7
7.6
3.3
5.6
7.7
9.9
11.9
5.6
7.7
9.9
11.9
7.9
10.8
13.4
7.1
10.2
12.9
15.8
18.6
12.7
15.3
18.2
20.8
2(b)
10
YRS
0.0
1.7
2.8
3.7
2.0
3.1
4.1
5.2
6.2
3.1
4.1
5.2
6.2
6.1
7.8
9.5
5.7
7.6
9.3
11.2
12.9
10.2
11.7
13.5
15.1
15
YRS
0.0
1.2
1.9
2.5
1.5
2.3
3.0
3.7
4.4
2.3
3.0
3.7
4.4
5.5
6.9
8.3
5.3
6.9
8.2
9.7
11.1
9.4
10.6
12.1
13.3
5
YRS
0.0
5.3
8.6
11,5
5.7
9.2
12.3
15.7
18.8
9.2
12.3
15.7
18.8
9.7
13.6
17.3
9.6
13.9
17.7
21.9
25.7
16.4
20.1
24.3
28.0
?(b)
10
YRS
0.0
2.5
4.1
5.4
3.0
4.6
6.1
7.8
9.2
4.6
6.1
7.8
9.2
6.9
9.1
11.3
6.9
9.4
11.6
14.0
16.2
11.9
14.0
16.3
18.4
15
YRS
0.0
1.7
2.7
3.6
2.2
3.2
4.2
5.3
6.3
3.2
4.2
5.3
6.3
6.1
7.7
9.4
6.1
8.0
9.7
11.5
13.2
10.5
12.1
13.9
15.5
(^Assumes a base production cost (excluding profit) of $30 per pound
of. U3o8.
of existing tailings pile, million MT.
A-23
-------
Table A.11.a. Production Cost Increases for a Large Model Existing Mill,
^/Metric Ton of Ore
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
4.2(b)
5 YRS
0.00
1.10
1.78
2.37
1.24
1.96
2.60
3.30
3.95
1.96
2.60
3.30
3.95
3.74
4.81
5.84
3.50
4.69
5.75
6.88
7.95
6.23
7.19
8.29
9.29
2(->
9.0(W
10 YRS
0.00
0.56
0.89
1.18
0.83
1.20
1.52
1.89
2.23
1.20
1.52
1.89
2.23
3.19
3.92
4.66
3.08
3.93
4.67
5.48
6.23
5.47
6.12
6.88
7.58
13.9(b)
15 YRS
0.00
0.39
0.62
0.82
0.70
0.96
1.20
1.46
1.71
0.96
1.20
1.46
1.71
3.03
3.65
4.29
2.96
3.70
4.35
5.04
5.71
5.23
5.79
6.45
7.05
4.2(b)
5 YRS
0.00
1.63
2.63
3.52
1.91
2.97
3.93
4.98
5.93
2.97
3.93
4.98
5.93
4.27
5.66
7.00
4.24
5.80
7.19
8.71
10.09
7.33
8.63
10.12
11.43
7
9.0(b)
10 YRS
0.00
0.80
1.29
1.71
1.09
1.61
2.08
2.59
3.06
1.61
2.08
2.59
3.06
3.44
4.31
5.19
3.43
4.44
5.34
6.32
7.22
5.98
6.78
7.73
8.57
I3.9(b)
15 YRS
0.00
0.55
0.88
1.16
0.84
1.19
1.52
1.86
2.18
1.19
1.52
1.86
2.18
3.19
3.90
4.64
3.18
4.03
4.78
5.59
6.34
5.56
6.22
7.00
7.69
4.2(b)
5 YRS
0.00
2.71
4.28
5.64
3.44
5.12
6.63
8.35
9.84
5.12
6.63
8.35
9.84
5.32
7.32
9.16
6.00
8.23
10.20
12.39
14.37
9.76
11.64
13.80
15.72
22(a)
9.0(b)
10 YRS
0.00
1.31
2.05
2.67
1.69
2.47
3.17
3.99
4.68
2.47
3.17
3.99
4.68
3.93
5.08
6.19
4.24
5.57
6.74
8.03
9.21
7.10
8.18
9.43
10.55
13.9(b)
15 YRS
0.00
0.89
1.36
1.76
1.15
1.65
2.10
2.65
3.09
1.65
2.10
2.65
3.09
3.50
4.40
5.28
3.70
4.75
5.67
6.69
7.62
6.29
7.11
8.09
8.97
(a)Size of existing tailings pile, million MT.
(b)Future production of uranium, million MT of ore.
A-24
-------
Table A.ll.b. Production Cost Increases for a Large Model Existing Mill,
i/Pound of
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
2u>
5
YRS
0.00
0.55
0.89
1.19
0.62
0.98
1.30
1.65
1.97
0.98
1.30
1.65
1.97
1.87
2.41
2.92
1.75
2.35
2.87
3.44
3.97
3.11
3.59
4.14
4.65
10
YRS
0.00
0.28
0.44
0.59
0.41
0.60
0.76
0.95
1.12
0.60
0.76
0.95
1.12
1.60
1.96
2.33
1.54
1.97
2.34
2.74
3.12
2.73
3.06
3.44
3.79
15
YRS
0.00
0.20
0.31
0.41
0.35
0.48
0.60
0.73
0.85
0.48
0.60
0.73
0.85
1.51
1.83
2.15
1.48
1.85
2.17
2.52
2.85
2.62
2.b9
3.22
3.53
5
YRS
0.00
0.81
1.32
1.76
0.95
1.48
1.96
2.49
2.96
1.48
1.96
2.49
2.96
2.13
2.83
3.50
2.12
2.90
3.59
4.36
5.04
3.67
4.31
5.06
5.72
7u>
10
YRS
0.00
0.40
0.64
0.85
0.55
0.80
1.04
1.30
1.53
0.80
1.04
1.30
1.53
1.72
2.16
2.60
1.71
2.22
2.67
3.16
3.61
2.99
3.39
3.86
4.28
15
YRS
0.00
0.27
0.44
0.58
0.42
0.60
0.76
0.93
1.09
0.60
0.76
0.93
1.09
1.59
1.95
2.32
1.59
2.01
2.39
2.80
3.17
2.78
3.11
3.50
3.84
5
YRS
0.00
1.35
2.14
2.82
1.72
2.56
3.31
4.17
4.92
2.56
3.31
4.17
4.92
2.66
3.66
4.58
3.00
4.11
5.10
6.20
7.19
4.88
5.82
6.90
7.86
22(a)
10
YRS
0.00
0.66
1.02
1.34
0.84
1.23
1.58
1.99
2.34
1.23
1.58
1.99
2.34
1.96
2.54
3.10
2.12
2.78
3.37
4.01
4.60
3.55
4.09
4.72
5.28
15
YRS
0.00
0.44
0.68
0.88
0.57
0.82
1.05
1.32
1.55
0.82
1.05
1.32
1.55
1.75
2.20
2.64
1.85
2.38
2.84
3.34
3.81
3.14
3.56
4.05
4.48
of existing tailings pile, million MT.
A-25
-------
Table A.ll.c. Production Cost Increases for a Large Model Existing Mill,
Percentage Increase^3)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
2(W
5
YRS
0.0
1.8
3.0
4.0
2.1
3.3
4.3
5.5
6.6
3.3
4.3
5.5
6.6
6.2
8.0
9.7
5.8
7.8
9.6
11.5
13.2
10.4
12.0
13.8
15.5
10
YRS
0.0
0.9
1.5
2.0
1.4
2.0
2.5
3.2
3.7
2.0
2.5
3.2 •
3.7
5.3
6.5
7.8
5.1
6.6
7.8
9.1
10.4
9.1
10.2
11.5
12.6
15
YRS
0.0
0.7
1.0
1.4
1.2
1.6
2.0
2.4
2.8
1.6
2.0
2.4
2.8
5.0
6.1
7.2
4.9
6.2
7.2
8.4
9.5
8.7
9.6
10.7
11.8
5
YRS
0.0
2.7
4.4
5.9
3.2
4.9
6.5
8.3
9.9
4.9
6.5
8.3
9.9
7.1
9.4
11.7
7.1
9.7
12.0
14.5
16.8
12.2
14.4
16.9
19.1
7(W
10
YRS
0.0
1.3
2.1
2.8
1.8
2.7
3.5
4.3
5.1
2.7
3.5
4.3
5.1
5.7
7.2
8.7
5.7
7.4
8.9
10.5
12.0
10.0
11.3
12.9
14.3
15
YRS
0.0
0.9
1.5
1.9
1.4
2.0
2.5
3.1
3.6
2.0
2.5
3.1
3.6
5.3
6.5
7.7
5.3
6.7
8.0
9.3
10.6
9.3
10.4
11.7
12.8
5
YRS
0.0
4.5
7.1
9.4
5.7
8.5
11.0
13.9
16.4
8.5
11.0
13.9
16.4
8.9
12.2
15.3
10.0
13.7
17.0
20.7
24.0
16.3
19.4
23.0
26.2
22Cb)
10
YRS
0.0
2.2
3.4
4.5
2.8
4.1
5.3
6.6
7.8
4.1
5.3
6.6
7.8
6.5
8.5
10.3
7.1
9.3
11.2
13.4
15.3
11.8
13.6
15.7
17.6
15
YRS
0.0
1.5
2.3
2.9
1.9
2.7
3.5
4.4
5.2
2.7
3.5
4.4
5.2
5.8
7.3
8.8
6.2
7.9
9.5
11.1
12.7
10.5
11.9
13.5
14.9
(a/Assumes a base production cost (excluding profit) of $30 per pound
of 11303.
0>)Size of existing tailings pile, million MT.
A-26
-------
Table A.12. Production Cost Increases for a Model New Mill
Percentage
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
$/Metric Ton of -Ore
0.15
2.73
3.15
3.63
2.73
3.27
3.75
4.26
4.75
4.81
5.19
5.67
6.10
2.73
3.15
3.63
2.73
3.27
3.75
4.26
4.75
4.81
5.19
5.67
6.10
$/Pound of l>308
0.08
1.36
1.58
1.82
1.36
1.64
1.87
2.13
2.37
2.40
2.60
2.83
3.05
1.36
1.58
1.82
1.36
1.64
1.87
2.13
2.37
2.40
2.60
2.83
3.05
Price Increase
in Production
Cost^a)
0.3
4.5
5.3
6.1
4.5
5.5
6.2
7.1
7.9
8.0
8.7
9.4
10.2
4.5
5.3
6.1
4.5
5.5
6.2
7.1
7.9
8.0
8.7
9.4
10.2
of U30g
a base production cost (excluding profit) of $30 per pound
A-27
-------
DCF is most useful in complex analytical situations, such as when
earnings or cash flows are fluctuating significantly, or when several
pollution control investments for a single project must be made during
different time periods, or when control costs are very high. In
situations that involve few variables, or variables that only change
slightly, a technique less comprehensive and time-consuming than DCF, such
as Return on Investment (ROI), may be sufficient.
The data for the DCF analysis should be as specific as possible to
the relevant profit center. This may be difficult in some cases because
individual plant data may not be publicly available from multi-plant
companies involved in several business segments. Also, in some
circumstances, factors that cannot readily be quantified and identified in
a DCF analysis may be important. For example, some industries may involve
several stages of production, each of which is a separate profit center
but which may all be closely related within a single company, such as
mining, smelting, and refining. Another possibility is that several
products may complement each other and, hence, may be collectively
important in order to allow a firm to offer a complete product line to its
customers.
The complexity of a DCF analysis and its parameters can be adjusted
depending on the data available and the overall rigor necessary for any
particular case. The parameters for each year for a typical DCF analysis
are presented below in Table A.13. Most of the parameters shown in
Table A.13 are self-explanatory. As particular circumstances warrant, the
costs parameter can represent total costs, or the costs parameter can be
separated into fixed costs and variable costs or separated into more
detailed costs such as energy, labor, materials, and so on. Depreciation
can be presented using the straight-line method or an accelerated method.
Depreciation is typically presented using the straight-line method because
it is the easiest method to calculate, and it yields more conservative
results than accelerated methods. Depletion is a variable that applies
only to extractive types of investments, such as mining and drilling for
oil. State taxes is an example of a parameter not shown in Table A.13,
but which may be necessary in particular analyses. Some analyses may
require a provision for a tax loss carryforward. Normally, investments
are financed partially with debt and partially with equity; however, if a
particular investment is financed totally with equity, then the interest
and principal repayment parameters, which are due to debt, will not be
present. The sustaining capital expenditures variable represents
expenditures required to maintain the plant in good working condition and
maintain salvage value. Rather than include sustaining capital
expenditures in an analysis, an alternative assumption that is sometimes
used is that salvage value declines to zero due to a lack of sustaining
capital expenditures. The conventional practice with respect to the
discount rate is to use a discount rate that assumes cash flows occur at a
single (discrete) point in time at the end of each year, rather than a
discount rate that assumes cash flows occur continuously throughout a
year. The variables that are affected by inflation, such as revenue and
costs, can be expressed in either real or nominal terms, but the choice
must be consistent throughout an analysis for all relevant variables.
A-28
-------
Table A.13. Discounted Cash Flow Parameters
1. Revenue
2. Costs
3. Depreciation
4. Interest
5. Control O&M Cost
6. Control Depreciation
7. Control Interest
8. Earnings Before Tax [1 - (2, 3, 4, 5, 6, 7)]
9. Depletion
10. Tax Liability
11. Investment Tax Credit
12. Control Investment Tax Credit
13. Minimum Tax
14. Total Tax Due [(10 - (11 + 12))+ 13]
15. Earnings After Tax [8 - 14]
16. Depreciation
17. Control Depreciation
18. Depletion
19. Cash Flow Before Deduction [15+16+17+18]
20. Principal Payments
21. Control Principal Payments
22. Sustaining Capital Expenditures
23. Net Cash Flow [19 - (20 + 21 + 22)]
24. Discount Factor
25. Discounted Net Cash Flow [23 x 24]
A-29
-------
Each annual net cash flow is calculated and then discounted. The
discounted net cash flows for all years of a project life are then summed
to yield the present value of the cash flows. The initial investment is
subtracted from the present value of the cash flows to yield the net
present value (NPV). The complete process using simple assumptions for
ease of presentation is shown in Table A.14. Several items that are not
shown in Table A.14 that-may be present in some analyses are salvage
value, the recovery of working capital at the end of a project's life, and
terminal value. Terminal value is a means of representing any continuing
value of a project beyond the years shown in a detailed DCF analysis. For
example, Table A.14 presents a ten-year analysis period. If the project
illustrated in Table A.14 is expected to continue in operation beyond ten
years, terminal value could be used to represent the continuing life of
the project.
If the NPV of a project is positive, this means that the project
returns more than the firm's cost of capital and the project should be
accepted. If the NPV of a project is negative, this means that a project
returns less than the firm's cost of capital and the project should be
rejected. If the NPV of a project is zero, this means that the project
returns exactly the firm's cost of capital and the project should be
accepted. However, as a practical matter, there is an element of
uncertainty associated "with most data and projections. Therefore, for
most DCF analyses, and particularly if the NPV is at or near zero, it is
desirable to conduct sensitivity analysis. The circumstances of each case
will determine which variables are candidates for sensitivity analysis.
There are two methods that can be used in a discounted cash flow
analysis: the weighted average cost of capital method (WACC), or the cost
of equity method. The basic difference between the two methods centers
around whether the discount rate represents the weighted average cost of
capital or the cost of equity. The weighted average cost of capital uses
a discount rate that represents the combined cost of debt and equity.
Because the discount rate for the WACC includes the cost of debt, there
are no explicit interest payments. Because the original investment
represents both debt and equity, there are no explicit principal
payments. In the cost of equity method, the discount rate represents only
the cost of equity. Therefore, interest payments on debt are identified
explicitly. Also, the original investment represents only the equity
share of the original investment, and, as a result, the debt portion of
the original investment is considered through regular principal repayments.
The analyst should consider supplementing NPV analysis with other
techniques such as ROI, internal rate of return (IRR), payback, and so
on. For example, if a given industry normally relies on ROI to make
decisions, then an ROI analysis, in addition to a DCF analysis, may be
desirable in order to use the same technique that industry uses to make
A-30
-------
4-1
• H
3
cr
ta
O
o
rH
60
C
• t-l
y
C
CO
c
to
CO
CO
,_|
J5 ^
5 to
"^ T3
»> t-
O W
rH "»
to 3
r* O
rt C
*H
*T3
fll ^
i ^
c JS
3 ^j
o 7T
o
03 ^*^
O
.
r*H
• oo
OOOOOOOOOOO OOOOOOO OO O O O l-~ -*
OOO OO OOO O O vO •
Of**' — t CMrH rHrHrH CM CM "d" CO
•t • ON
1 — f
OOOOOOOOOOO OOOOOOO OO O OOf~> VD
OOO OO OOO O OrH.
Of^rH CMrH rHrHrH CM CMlTiCM
rH rH
OOOOOOOOOOO OOOOOOO OO O O O f--
CM
rH CM
4J
C -H (3
0 X T3 0
•H CO CU 4J X -r4 CO rH
4-1 EH r4C cd J-l 4-1 rH Cd
4-1 CO 4J OCP fHtOCU C Cd 4J
to T-I CO CU E .H l-i CU O. T-I l-i
OUCUrJ X 4-1 )-i U O § 'H ^ O 4-1
O ^ P-. 4J X O 14H O P- (O PH -H <1) rH CO
• iH vOcUCFQ rH 4_) c -u CO
CC 4-1 COOrQCU TJ COCOtO O O O CO 05 T-l 4J £ 4-) 4-1 O
CU T-l CO rH rH rH 60 TH CO g rH CU E H 60-H rH .H rH T-l O. rH 4J C T-l 0} C C •— 1
p; CUMMr-ir-iT-lCUi-^COWiCjErHT-ICUt-iCU OOl-iQJcOCCJOO
CU4->V-lCU4J4J4JCrH QJ 4-1 •r4tOCr4J->rHrC3C4-lp4-'CU O O UH
rv^ Q^ ^] j— t Q_J r^ Q^ r^ ^^ ^H r--l t^ E™i ^! EH r*~] f*\ CJ ^-^ c^ ^^ p | r^ p . y^ rV^ ^y /^ f~\ cj
i— i CM co *^ m v^ r^ oo cTN Cj rH CM co *^~ in \o r^1 oo ON ^^ rH CM co ^j* m
rHrHrH rHrHrHrHrHrHrH CMCM CM CMCMCM
vD O \O
• • •
in o m
rH O rH
CO O CO
rH rH
1 +
CO
|j
o
I-H
to
f
CO
tO i *
o e
CU CU
u-i E 3
O 4-1 rH
01 to
cu cu >
3 >
r-l C 4J
fO M C
> cu
rH CO
4-1 tO CU
C C to
cu -H PM
co 60
CU T-I 4->
r4 r4 CU
d4 0 S=
A-31
-------
decisions. Internal rate of return is an analytical technique similar to
NPV. The difference between IRR and NPV is in the discounting of the cash
flows. The NPV calculation discounts the cash flows at a predetermined
discount rate, whereas IRR seeks that discount rate which yields an NPV
equal to zero. After the IRR for an investment project is calculated, the
firm's cost of capital is compared to the IRR for the investment project.
If the IRR is greater than or equal to the firm's cost of capital, the
project should be accepted. If the IRR is less than the firm's cost of
capital, the project should be rejected. The payback period is an example
of another analytical technique that should be considered as a potential
supplement to a DCF analysis. The value of considering payback as a
supplement to DCF is that DCF does not specifically identify the point in
time that a project breaks even. Overall, DCF analysis is the most
comprehensive technique.
A.6 Mill Closure Methodology
To determine the potential for uranium mills to close due to tailings
disposal costs, we have performed a discounted cash flow analysis. This
section describes the methodology in detail. The analysis is performed
for each economic impact case and each model mill. The results of the
analysis are presented in the next section.
Table A.15 shows an example of the DCF calculations for a small mill
with a 7 million MT tailings pile, with 5 years remaining lifetime and
subject to the control costs of Case 37. The first step in determining
the cash flow is to project the annual quantity of UgOg to be produced
over the remaining lifetime of the mill. Production is based on the
mill's capacity, the capacity utilization rate, the ore grade (assumed to
be .1 percent), and the uranium recovery factor (assumed to be
93 percent). Production is expressed in terms of pounds of 1)305
(line 1). The capacity utilization rate used in the mill closure analysis
is the industry average rate derived in the industry simulation described
in Appendix B. This utilization rate projection is applied uniformly to
each mill and for each impact case. The projected rate is 60 percent for
1983 and 1984 (years 1 and 2), 65 percent for 1985-87, 70 percent for
1988-89, and 75 percent for the remaining years.
The forecast of uranium price (line 2) was derived from DOE data
sources and is explained in Appendix B. The ability of companies to
pass-through disposal costs in terms of price increases is also considered
in the DCF analysis (line 3). Total revenue (line 4) to the mill is
derived by multiplying the uranium price (line 2 and line 3) by the
production (line 1). The mill's cash flow (line 6) is estimated by
multiplying the revenue estimated (line 4) by the assumed cash flow margin
(line 5).
A-32
-------
r-
en
60
Ed C
W -H
< C
O -H
ca
en oi
•iH
CO CO
>1 >H
t-i CB
CO CU
in
o
r-H
Cxj
r;
CO
ca
0
'O
0)
4-1
^
0)
r-H
• rH
PH
EH
J£
C
o
TH
CO
^J
ca
l-H
i-H
0
o
en
00
OS
f-H
C
o
o
CO
01 CB
f-H e
fQ CO
co
H
en
-*
o
en
O-
0
en
-*
0
0
-*
O
o
-d-
o
X— X
•
CO
£>
r— 1
C
0
•H
l-H
l-H
• iH
S3
C
o
•iH
4-1
O
3
T3
O
M
PH
00
O
en
CD
t
i — t
P^
oo
CN
00
f—
•*
oo
vD
.j.
in
CM
**
OS
in
<£>
en
O
i-H
OS
CM
^
p
l-H
^^
*^-~ 4D-
'^H
3 C C r-4
O O -iH -iH
M -H 00 S
rC l-H (H V-X
4-1 r-H CO
I '^ S3 15
CO S O
CO ^^ > r-l
CO O <4H
PH OJ rH C
3 fn M
Q) C
0 CU JS J2
•H > CO CO
tH 0) CO CO
PH OS U C_>
.
m ^H,- m vo
^H,-
•*
<)•
^>
C
0
•iH
i — 1
l-H
• H
53
Jj
o
t— 1
fo
JS
CO
CO
CJ
4J
0)
S
^
Os
O
CM
VD
O
en
oo
vD
en
in
•^
in
CM
oo
• — i
o
Os
)H
0
4J
O
CO
rT|
4-1
3
O
O
CO
•H
O
*
O
*o
oo
o
o
f— 1
o
VO
m
f— i
I
vO
CN
CM
1
en
o
en
1
C
o
•H
1— 1
I-H
• 1-1
5r«
s_x
Jjf
o
1 — 1
f*
r^
CO
ca
o
4J
0)
J2J
T3
flj
4-1
C
3
O
O
CO
•H
O
^
f— 1
•-H
Os
oo
m
I
S
i-H
CO
C
0)
CO
0)
Ol
!Z
CM
A-33
-------
To determine the appropriate cash flow margin - the percent of
revenues that is considered cash flow - we relied on the financial data of
six companies in the uranium industry. These data are shown in
Tables A. 16 and A. 17. As a group, these six companies provide a
reasonable financial representation of the uranium industry. Although
there are other companies in the industry, the financial results for those
other companies contain insufficient information about uranium, or the
results are not representative of the uranium industry. For example,
Exxon Corporation and Union Carbide Corporation both have uranium
operations, but the financial results of their uranium operations are a
small part of the total company and are not identifiable from company
financial statements.
The financial information has been assembled from corporate annual
reports and Securities and Exchange Commission (SEC) 10-K reports. Many
companies in the uranium industry have more than one business segment.
The information shown in Tables A. 16 and A. 17 is for the business segment
that includes uranium, although in many instances other products may also
be included in the uranium business segment, such as other metals.
Therefore, results should be compared over several years and among several
companies for the results to be considered typical of the uranium industry.
For the purpose of this analysis, pre-tax cash flow generated from
mill revenues is used to focus on the cash available to meet additional
expenditures required for control of the tailings. Table A. 17 has shown
the industry ratios for the components of pre-tax cash flow. A cash flow
margin of 20 percent on revenue is used (15 percent operating profit plus
5 percent depreciation and depletion). A cash flow margin of 20 percent
is used to represent an average margin over the life of a project.
Depreciation and depletion are frequently 10 percent or more; however, the
excess above 5 percent is assumed to be committed to debt repayment or
sustaining capital expenditures, or both. The principal difference
between cash flow and operating profit is that cash flow includes
depreciation and depletion, whereas operating profit does not.
Depreciation and depletion are expenses for income tax calculations, but
they are not cash expenses.
Annual control costs for each model mill are estimated separately for
existing tailings and new tailings (see Table A. 15). For existing
tailings, the model pile costs of Table A. 5 are spread equally over the
first five years for all model mills (line 7). For new tailings, the
annual control cost (line 8) is derived by multiplying the appropriate
unit disposal cost from Table A. 6 (converted to dollars per pound of
by the annual production estimate (line 1).
After the control costs are estimated, the net cash flow for each
year can be calculated. The net cash flow (line 9) equals the cash flow
(line 6) minus the control costs (line 7 and line 8). A discount factor
(10 percent discount rate is assumed) (line 10) is then applied to the net
cash flow (line 9) to give the discounted net cash flow (line 11). The
sum of the annual discounted net cash flow estimates yields the net
present value (line 12).
A-34
-------
Table A.16.
Financial Information for Selected Companies
in the Uranium Industry
($ in Thousands)
Revenues
Operating
Profit
Assets
Depreciation
Depletion
Capital
Expend.
Year
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
Atlas
15,611
28,152
26,845
38,253
60,148
NA
NA
4,607
8,027
(1,925)
(2,159)
6,142
NA
NA
NA
NA
56,375
79,428
72,834
NA
NA
NA
NA
3,331
4,058
6,212
NA
NA
NA
NA
14,579
21,870
7,453
NA
NA
Conoco
NA
NA
16,488
16,384
34,586
NA
NA
NA
NA
(20,815)
(21,530)
(30,719)
NA
NA
NA
NA
52,491
61,218
62,867
NA
NA
NA
NA
2,876
3,209
3,957
NA
NA
NA
NA
7,213
6,937
7,999
NA
NA
Homestake
22,441
59,141
44,928
42,388
45,363
59,983
63,702
10,389
24,622
20,454
14,097
(601)a
5,703
15,592
14,144
45,023
42,990
47,790
54,798
83,135
80,831
192
80
0
17
6,980
5,339
19,953
2,036
2,628
7,961
8,533
12,521
12,036
1,025
Kerr-McGee
96 , 800
123,300
115,200
163,400
238,900
201,500
153,100
32,700
22,300
20,100
(200)
30,000
26,300
20,000
215,300
236,500
272,000
288,400
304,800
304,500
312,400
7,500
9,300
13,800
15,600
21,300
16,600
16,300
NA
NA
34,277
28,800
17,900
14,200
7,300
Pioneer
NA
NA
13,810
20,267
7,829
7,224
419
NA
NA
1,257
(1,004)
(1,082)
(7,855)
(63,871)
NA
NA
51,119
70,583
84,046
85,859
35,621
NA
NA
8,679
11,253
8,718
5,337
2,096
NA
NA
19,467
23,513
17,567
9,238
3,123
UNC
29,339
80,816
133,193
181,626
167,811
102,102
84,038
7,103
28,539
42,320
61,339
12,243
20,537
2,409
87,222
145,376
203,041
279,436
239,888
210,471
209,791
1,070
1,952
5,414
9,677
11,952
6,993
3,249
27,856
54,499
49,518
39,156
46,662
14,386
8,606
NA = Not Available.
(a'Includes an $8,075 loss on settlement of uranium litigation, would
otherwise have been (8,075) - 601 = +$7,474.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
A-35
-------
Table A.17.
Financial Ratios for Selected Companies
in the Uranium Industry
(Percentage)
Operating
Profit/
Revenue
Operating
Profit/
Assets
Depreciation
Depletion/
Revenues
Capital Ex-
penditure/
Revenue
Year
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
1976
1977
1978
1979
1980
1981
1982
Atlas
29.5
28.5
-
-
10.2
NA
NA
NA
NA
-
-
8.4
NA
NA
NA
NA
12.4
10.6
10.3
NA
NA
NA
NA
54.3
57.2
12.4
NA
NA
Conoco
NA
NA
-
-
-
NA
NA
NA
NA
-
-
-
NA
NA
NA
NA
17.4
19.6
11.4
NA
NA
NA
NA
43.7
42.3
23.1
NA
NA
Homes take
46.3
41.6
45.5
33.3
16. 5^)
9.5
24.5
73.4
54.7
47.6
29.5
13.6(b)
6.9
19.3
1.8
.3
-
.04
15.4
8.9
31.3
9.1
4.4
17.7
20.1
27.6
20.1
1.6
Kerr-McGee
33.8
18.1
17.4
-
12.6
13.1
13.1
15.2
9.4
7.4
-
9.8
8.6
6.4
7.7
7.5
12.0
9.5
8.9
8.2
10.6
NA
NA
29.8
17.6
7.5
7.0
4.8
Pioneer
NA
NA
9.1
-
-
-
-
NA
NA
2.5
-
-
-
-
NA
NA
62.8
55.5
111.0
73.9
500.2
NA
NA
141.0
116.0
224.0
127.9
745.3
UNC
24.2
35.3
31.8
33.8
7.3
20.1
2.9
8.1
19.6
20.8
22.0
5.1
9.8
1.1
3.6
2.4
4.1
5.3
7.1
6.8
3.9
95.0
67.4
37.2
21.6
27.8
14.1
10.2
NA = Not Available.
- = Loss Year.
5 percent without litigation.
6 percent without litigation.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
A-36
-------
As discussed in Section A.5, if the net present value (NPV) of the
cash flows is positive, then the project should be accepted or, in this
case, the mill should remain open. If the NPV is negative, the mill
should close. For conservatism, we have assumed for this analysis that if
the NPV is less than $1 million, then the mill would cease operation.
The mill closure analysis is applicable to all existing mills
regardless of whether a mill is currently operating or on standby. The
closure decision, as determined by this methodology, is essentially the
same in either case. In both cases, the mill's expected future cash flow
is compared to its expected tailings disposal costs. The intent is to
determine not whether mills will operate in the future, per se, but rather
to see if the tailings disposal costs, not other factors, provide a
significant obstacle to future operation. As discussed in Chapter 5,
mills have closed for a variety of reasons unrelated to control of mill
tailings. For a mill currently operating with economic life remaining,
the closure decision determines if the tailings disposal cost (not market
conditions or other reasons) will prevent the mill from continuing its
operations in the future. For a mill on standby due to market conditions
but also with economic life remaining, the closure decision determines if
the tailings disposal costs will prevent a mill from reopening sometime in
the future. Consequently, the mill closure analysis does not distinguish
between mills that are currently operating and those that are on standby.
Tables A.18.a, A.lB.b, and A.18.C present the estimated net present
values for all 25 economic impact cases and each model mill.
A. 7 Mill Closure Results
The model mill closure determinations are based on the estimates of
the net present value of the cash flows. The results for each economic
impact case are summarized below. These results assume a cash flow margin
of 20 percent and complete cost absorption by the model mills. Because
there are three different sizes of model mills, the results are converted
to the common denominator of equivalent number of small mills to allow
direct comparison of different cases. Based on mill capacity, one medium
mill is equivalent to two small mills, and one large mill is equivalent to
four small mills. Thus, the total of 24 mills in the industry can be
converted to the equivalent of 54 small mills [(8 small mills x 1) +
(9 medium mills x 2) + (7 large mills x 4) = 54 small mill equivalents].
Economic Model Mill Equivalent Number
Impact Case Closures of Small Mills
1-8, 10-12, No closures 0
26-31, 34
9, 13, 32, 33 1 small 1
35, 36
37 2 small 2
A-37
-------
Table A.18.a. Net Present Value for a Small Model Existing Mill
(Millions of 1983 Dollars)
Economic
Impact
Case
# of
Mills
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
1
15.66
12.41
10.34
8.56
12.87
10.77
8.91
6.88
5.00
10.77
8.91
6.88
5.00
10.39
8.01
5.91
11.15
8.68
6.50
4.13
1.94
7.51
5.39
3.06
0.91
2(a)
10
YRS
1
35.22
31.92
29.83
28.04
32.18
30.04
28.14
26.06
24.15
30.04
28.14
26.06
24.15
28.45
25.84
23.47
29.21
26.44
23.99
21.35
18.89
24.42
22.10
19.50
17.12
15
YRS
2
46.84
43.51
41.41
39.60
43.63
41.47
39.55
37.44
35.51
41.47
39.55
37.44
35.51
39.11
36.34
33.81
39.86
36.90
34.29
31.46
28.83
34.34
31.88
29.12
26.58
5
YRS
1
15.66
10.74
7.68
4.93
10.58
7.36
4.44
1.23
-1.62
7.36
4.44
1.23
-1.62
8.72
5.36
2.27
8.80
5.19
1.95
-1.63
-4.81
4.02
0.85
-2.70
-5.84
7(a)
10
YRS
3
35.22
30.25
27.17
24.41
29.93
26.68
23.74
20.50
17.62
26.68
23.74
20.50
17.62
26.78
23.19
19.83
26.86
22.95
19.44
15.59
12.14
20.93
17.55
13.74
10.37
15
YRS
0
46.84
41.84
38.74
35.98
41.41
38.15
35.18
31.93
29.03
38.15
35.18
31.93
29.03
37.44
33.69
30.17
37.51
33.42
29.74
25.70
22.08
30.85
27.34
23.36
19.84
)Size of existing tailings pile, million Ml.
A-38
-------
Table A.18.b.
Net Present Value for a Medium Model Existing Mill
(Millions of 1983 Dollars)
Economic
Impact
Case
# of
Mills
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0
31.32
28.00
25.90
24.10
28.17
26.02
24.11
22.01
20.09
26.02
24.11
22.01
20.09
23.96
21.26
18.79
24.72
21.84
19.29
16.53
13.97
19.48
17.08
14.38
11.91
2(a)
10
YRS
2
70.45
67.02
64.90
63.05
66.78
64.55
62.57
60.39
58.39
64.55
62.57
60.39
58.39
60.08
56.91
53.91
60.84
57.35
54.28
50.96
47.86
53.31
50.49
47.26
44.32
15
YRS
2
93.68
90.20
88.05
86.17
89.69
87.41
85.39
83.15
81.10
87.41
85.39
83.15
81.10
81.40
77.92
74.59
82.16
78.28
74.87
71.19
67.74
73.15
70.06
66.50
63.25
5
YRS
0
31.32
26.33
23.24
20.48
25.95
22.69
19.73
16.48
13.59
22.69
19.73
16.48
13.59
22.29
18.61
15.15
22.37
18.35
14.74
10.77
7.22
16.00
12.53
8.62
5.16
7(a)
10
YRS
4
70.45
65.36
62.22
59.44
64.64
61.33
58.31
55.02
52.06
61.33
58.31
55.02
52.06
58.42
54.26
50.27
58.49
53.87
49.73
45.20
41.11
49.82
45.94
41.50
37.57
15
YRS
1
93.68
88.53
85.36
82.57
87.60
84.25
81.21
77.89
74.88
84.25
81.21
77.89
74.88
79.73
75.27
70.95
79.80
74.79
70.32
65.43
60.99
69.67
65.51
60.74
56.50
of existing tailings pile, million MT.
A-39
-------
Table A.18.C.
Net Present Value for a Large Model Existing Mill
(Millions of 1983 Dollars)
Economic
Impact
Case
# of
Mills
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
5
YRS
0
62
59
57
55
58
56
54
52
50
56
54
52
50
51
47
44
51
48
44
41
38
43
40
37
33
.64
.18
.04
.17
.77
.51
.51
.29
.26
.51
.51
.29
.26
.11
.75
.55
.87
.14
.87
.33
.01
.44
.46
.03
.90
2V~'
10
YRS
0
140.89
137.23
135.03
133.07
135.99
133.58
131.44
129.05
126.86
133.58
131.44
129.05
126.86
123.35
119.05
114.80
124.11
119.18
114.85
110.19
105.80
111.09
107.27
102.79
98.71
15
YRS
1
187.37
183.58
181.33
179.32
181.80
179.29
177.07
174.56
172.27
179.29
177.07
174.56
172.27
165.98
161.07
156.15
166.74
161.03
156.03
150.64
145.57
150.78
146.42
141.26
136.58
5
YRS
1
62.64
57.51
54.36
51.57
56.67
53.33
50.30
46.99
44.00
53.33
50.30
46.99
44.00
49.44
45.10
40.91
49.52
44.66
40.32
35.57
31.27
39.95
35.91
31.27
27.15
7va/
10
YRS
1
140.89
135.57
132.32
129.49
134.06
130.61
127.47
124.07
120.95
130.61
127.47
124.07
120.95
121.68
116.40
111.16
121.76
115.69
110.30
104.42
99.05
107.61
102.72
97.03
91.97
15
YRS
1
187
181
178
175
179
176
173
169
166
176
173
169
166
164
158
152
164
157
151
144
138
147
141
135
129
.37
.91
.61
.75
.98
.47
.25
.80
.59
.47
.25
.80
.59
.31
.42
.51
.39
.55
.48
.88
.82
.29
.87
.50
.84
5
YRS
1
62.64
54.11
49.16
44.87
51.81
46.50
41.77
36.34
31.64
46.50
41.77
36.34
31.64
46. 11
39.87
34.09
43.98
37.00
30.84
23.97
17.77
32.30
26.43
19.67
13.65
22va/
10
YRS
1
140.89
132.12
127.14
122.87
129.69
124.38
119.63
114.11
109.41
124.38
119.63
U4.ll
109.41
118.35
111.16
104.34
116.23
108.04
100.83
92.83
85.55
99.95
93.24
85.43
78.47
15
YRS
1
187.37
178.44
173.45
169.19
175.92
170.61
165.84
160.27
155.57
170.61
165.84
160.27
155.57
160.97
153.18
145.68
158.85
149.89
142.01
133.28
125.32
139.63
132.39
123.90
116.34
of existing tailings pile, million MT.
A-40
-------
A. 8 Sensitivity Analysis
To supplement the above closure results, a sensitivity analysis was
performed which varied two parameters: the cash flow margin and the
assumption of complete cost absorption by the model mills. The cash flow
margin is varied from 20 percent to 25 percent, and then 15 percent. The
assumption of complete cost absorption has the greatest economic impact on
the model mills. If the control costs can be completely or partially
passed-through in the form of price increases, this will lessen the impact
on the mills. Some pass-through is probable for several reasons. First,
all of the existing mills plus any new mills will be subject to control
costs. Therefore, although there may be different levels of control costs
within the industry, the industry as a whole should pass-through control
costs to some extent. Second, as discussed in Appendix B, demand for
yellowcake is inelastic with respect to price. Finally, long-term
contracts for U^OQ frequently contain cost escalation clauses. Two
pass-through scenarios were analyzed: a $1 and $2 per pound increase in
the price of
Table A. 19 presents the results of the sensitivity analysis for each
economic impact case. There are 9 different scenarios which have been
analyzed (3 cash flow margins x 3 cost absorption/pass-through
assumptions). Since there are 25 economic impact cases, this yields 225
separate mill closure results, all of which are expressed in this table in
terms of small mill equivalents. The findings of this analysis are
discussed below.
Cash Flow Margin
Selection of the cash flow margin has a noticeable impact on the mill
closure analysis. For the six cases which show one small mill closure
under the conditions of a 20 percent cash flow margin and 100 percent cost
absorption, all but one case has no closures when a 25 percent cash flow
margin is assumed. Case 37, which had two small mill closures with a
20 percent margin, shows one closure with a 25 percent margin. In the
other direction, assuming a margin of 15 percent results in 14 of the
impact cases indicating closures. Except for Case 37, all of these cases
yield one or two small mill closures under the 15 percent cash flow
margin. Six small mill equivalents are estimated to close for Case 37
under the 15 percent margin (and no pass-through) , compared to two under
the 20 percent assumption.
Cost Absorption/Pass-Through Assumptions
The cost absorption/pass-through assumption also influences the mill
closure analysis. For the six cases with one small mill closure under the
conditions of a 20 percent cash flow margin and no pass-through, a $1 per
pound pass-through eliminates the closure in one case, while a $2 per
pound pass-through eliminates the closure in four additional cases. For
Case 37, the two small mill closures under cost absorption and a
20 percent margin are reduced to one with either a $1 or $2 per pound
pass-through. Also, the six small mill equivalents closing under cost
absorption and a 15 percent margin are reduced to two with a $1 per pound
pass -through.
A-41
-------
Table A.19. Summary of Model Mill Closure Results^3)
Economic
Impact
Case
1
2
3
4
5
6
7
8
9
10
11
12
13
26
27
28
29
30
31
32
33
34
35
36
37
Cost
25%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
Absorption
20%
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
1
1
0
1
1
2
15%
0
0
0
0
0
0
1
1
1
0
1
1
1
0
0
1
0
0
1
2
2
1
1
2
6
$1 Price Increase
25%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
20%
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
1
1
0
0
1
1
15%
0
0
0
0
0
0
0
1
1
0
0
1
1
0
0
1
0
0
1
1
2
0
1
2
2
$2 Price Increase
25%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
1
15%
0
0
0
0
0
0
0
1
1
0
0
1
1
0
0
0
0
0
0
1
1
0
1
1
2
^'Expressed in terms of small mill equivalents,
A-42
-------
REFERENCES FOR APPENDIX A
DOE82 U.S. Department of Energy, Commingled Uranium Tailings Study,
Volume II, Technical Report, DOE/DP-0011, June 30, 1982.
EMJ79 Engineering and Mining Journal, July 1979, Page 173.
NRC80 U.S. Nuclear Regulatory Commission, Final Generic Environmental
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
A-43
-------
APPENDIX B
PROJECTIONS OF PRICE, DEMAND, AND PRODUCTION
-------
Appendix B
Projections of Price, Demand, and Production
B.I Overview
The purpose of this appendix is to present the projections of demand,
price, and production of uranium for the years 1983 through 2000. These
projections, which are based on projections provided to us by the
Department of Energy, Energy Information Administration (EIA), are used to
estimate the industry-wide cost of mill tailings disposal and the
associated economic impacts of several alternative standards. The
estimates of uranium production at conventional mills are converted to
generation of mill tailings and thus form the basis of the industry cost
estimates presented in Chapter 5. The effects of control-caused mill
closures (see Appendix A) on industry capacity and production are also
analyzed in this appendix.
B.2 Baseline Projection
To obtain the best estimates of future uranium industry activities,
we solicited EIA to provide us with a set of projections from which we
could estimate the economic impacts of the alternative tailings
standards. It became readily apparent that a new set of projections
constructed from their models had to be developed since the information in
their most recent publications was inadequate for our purposes. In EIA's
most detailed study on the uranium industry, published in March 1983
(DOE83a), their projections of uranium demand, imports, domestic
production, and prices were based on their mid-case forecast of U.S.
reactor capacity published in their 1981 Annual Report to Congress. This
forecast calls for installed reactor capacity of 165 GWe by the year 2000
and is substantially higher than EIA's most recent mid-case forecast of
130 Gwe. EIA's most recent forecasts are published in their 1982 Annual
Energy Outlook (DOE83b); however, this report contains no information on
uranium industry activities. EIA, thus, committed staff resources to
performing computer runs on their uranium industry model (EUREKA) with an
updated set of uranium demand estimates (see DOE83a for a description of
the EUREKA model). The projections developed in this RIA rely very
heavily on the output from these computer runs.
B.2.1 Industry Demand and Conventional Mill Production
In the RIA for the proposed standards, we developed two industry
demand scenarios which were derived from the mid-case and firm nuclear
base case contained in EIA's 1980 Annual Report to Congress. In their
most recent set of forecasts presented in the 1982 Annual Energy Outlook,
B-l
-------
EIA has dropped the firm nuclear base scenario and developed only three
forecasts - low, mid, and high. Table B.I presents the annual projections
of reactor capacity through the year 2000 for both the low and high cases,
as well as the percentage difference estimated for each year. The percent
difference between the two cases ranges from 5 percent for the year 1989
to 27 percent for the year 2000, with the average difference (in gigawatt-
years) over the entire time period being 14 percent. In March 1983, the
EIA Administrator presented at a conference two sets of EIA forecasts of
uranium requirements which correspond to the low and high reactor capacity
cases (Ev83). These two forecasts, as well as their percentage
difference, are also presented in Table B.I. The difference between the
high and low case (ignoring 1983) ranges from 5 percent for 1986 to
35 percent for the year 2000, with the average over the entire period
being 17 percent. Based on these two comparisons, we concluded that the
different forecasts were not far enough apart to warrant the development
of two baseline (no EPA standard) projections as we did in the RIA for the
proposed standards.
EIA developed a single projection of uranium industry demand which
served as the starting point for the EUREKA computer runs. The first ten
years of the projection is based primarily on information from EIA's
latest (January 1983) uranium market survey (DOE83d) and represents the
survey's estimates of utilities' committed deliveries of uranium to DOE
enrichment plants. For the remaining years, the projection represents
EIA's estimate of uranium requirements under their mid-case scenario.
Table B.2 presents the complete projection of industry demand derived by
EIA.
Industry demand and domestic production are related by the following
identity:
Industry Demand = Change in Inventories + Net Imports + Domestic Production
To derive a baseline projection of domestic production, we must
therefore make some assumptions about imports and inventory adjustments.
EIA performed their computer runs using two different import scenarios.
The first, referred to as the "Pure Price Competition" case, assumes a
free market and allows the relative economics of domestic and foreign
uranium production to dictate how utilities will purchase uranium. The
second scenario, called the "Utility Preference" case, assumes that
utilities will purchase foreign uranium only up to a self-imposed limit
which has been defined by EIA as 40 percent of demand. Although this
containment is self-imposed by the utilities, it is essentially the same
as a 40 percent embargo limit. Descriptions of these two cases are
presented in EIA's recent study of the uranium industry (DOE83a).. These
two import scenarios are extremes, neither of which is likely to occur.
However, the results from these two cases provide reasonable bounds on
what the uranium industry will be like in the future. Table B.3 presents
the annual import share of industry demand for these two cases, as derived
from the EUREKA output. For use in this RIA, we assumed the average of
B-2
-------
Table B.I. Department of Energy Projections of Reactor Capacity
and Uranium Requirements, 1983-2000
Year
Uranium Requirements
(10 ST U,0.)
j o
Low Case High Case % Diff. Low Case High Case % Diff.
Installed Reactor
Capacity -(GWe)
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Cumulative
Total
62
66
72
83
94
103
110
112
114
114
114
113
113
113
113
112
111
110
1829
69
77
90
101
101
113
115
121
122
125
127
127
127
131
133
136
138
140
2093
11
17
25
22
7
10
5
8
7
10
11
12
12
16
18
21
24
27
14
16.3
17.5
18.0
17.5
17.4
18.7
18.8
18.7
18.5
18.2
18.7
18.8
19.0
18.5
17.6
17.7
18.6
18.8
327.3
16.3
19.0
19.0
18.3
18.7
20.8
21.7
21.7
21.2
20.8
22.5
23.1
22.2
21.8
22.2
24.0
25.0
25.4
383.7
0
9
6
5
7
11
15
16
15
14
20
23
17
18
26
36
34
35
17
Source: Installed reactor capacity: Roger Diedrich, "Estimates of
Future vs Nuclear Power Growth," U.S. Department of Energy,
Energy Information Administration, SR-NAFD-83-01, January 1983
(Also summarized in DOE83b).
Uranium requirements: J. Erich Evered, "Outlook for U.S. Energy
Demand and Supply - The Role of Nuclear Power," presented at Atomic
Industrial Forum Fuel Cycle Conference, Kansas City, Missouri,
March 21, 1983.
B-3
-------
Table B.2. Industry Demand, 1983-2000
Year
1983
1984
1985
1986
1987
1988
1989
1990
103 ST 11308
14.0
17.5
18.8
19.5
18.0
22.0
19.5
20.0
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
103 ST U308
20.3
20.2
20.9
21.7
22.5
22.8
23.5
25.4
27.7
29.7
Source: U.S. Department of Energy, Energy Information Administration
(Gene Clark), July 11, 1983.
B-4
-------
Table B.3. Penetration of Uranium Imports, 1983-2000
(percent of industry demand)
Pure Price
Competition Case
Year (imports plus shortfall)
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
18
17
18 (33)
20 (38)
19 (33)
34 (48)
24 (26)
34
23
22
22
32
40
44
56
65
72
65
Utility
Preference
Case
18
17
18
20
19
30
29
29
23
16
21
27
31
30
34
36
36
37
Percent Assumed
for RIA
18
17
18
20
25
35
27
31
23
19
21
29
35
37
45
51
54
51
Source: Calculated from EUREKA computer runs, prepared by
U.S. Department of Energy, Energy Information Administration
(Gene Clark), July 11, 1983.
B-5
-------
these two sets of estimates for most of the years in the projection
period. For five of the years, an unexplained shortfall turned up in the
EUREKA output so that we judgmentally assumed an import share for those
years. The import share assumed in this RIA is also shown in Table B.3.
The changes in inventory levels were essentially the same for each import
scenario so that no interpolation of the EUREKA output was required.
With the projections of demand, imports, and inventory adjustments in
place, we calculated the domestic production for each year according to
the identity stated above. Once the projection of domestic production was
established, we had to then determine how much of it will be produced at
conventional uranium mills. As explained in Chapter 2, the conventional
mill share of domestic production was historically about 90 percent, but
this has decreased to 85 percent in 1980, 81 percent in 1981, and
75 percent in 1982. We expect nonconventional sources of uranium
production to continue their already significant penetration into the
market, but we have no basis for evaluating the degree of this penetration
or the time frame over how long it will occur. For purposes of projecting
conventional mill production and mill tailings generation, we arbitrarily
assumed that the nonconventional sources would maintain their 25 percent
share of the market over the entire time period under consideration.
Table B.4 presents the baseline projections for industry demand, change in
inventory levels, imports, total domestic production, and production at
conventional mills.
B.2.2 Mill Capacity, Market Closures, and Segmentation of Production
by Existing and New Mills
The primary purpose in projecting the production at conventional
uranium mills is to determine the amount of future tailings that will be
generated so that we can estimate the total cost of the alternative
disposal standards. Since future tailings disposal costs differ according
to whether they are added to existing impoundments or placed in new piles,
we need to estimate how much of the future tailings are expected to be
generated at existing mills versus new mills. To make this determination,
we need to know for each year how much capacity is available at existing
mills and how much new mill capacity must be introduced in order to meet
the demand for conventionally-produced uranium. To do this, we have
developed a model of the conventional milling sector which takes into
account the following:
o amount of capacity which is in operation;
o capacity which is available but is on standby due to market
conditions;
o capacity which is permanently retired due to its economic life
being exhausted;
o introduction of new mill capacity;
o industry average capacity utilization rate (for mills in
operation only).
B-6
-------
Table B.4. Derivation of Projection of Uranium Production
by Conventional Mills, 1983-2000
(thousand MT U308)
Year
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Industry
Demand
12.7
15.9
17.1
17.7
16.3
20.0
17.7
18.1
18.4
18.3
19.0
19.7
20.4
20.7
21.3
23.0
25.1
26.9
Change in
Inventories
-0.4
-4.8
-4.2
-3.8
-3.3
-3.1
-2.7
+0.2
-1.9
-1.4
-1.2
-0.8
+0.8
+0.2
+0.6
+ 1.8
+2.1
+ 1.9
Net
Imports
2.3
2.7
3.1
3.5
4.1
7.0
4.8
5.6
4.3
3.4
4.0
5.7
7.2
7.6
9.6
11.8
13.6
13.7
Total
Domestic
Production
10.0
8.4
9.8
10.4
8.9
9.9
10.2
12.7
12.2
13.5
13.8
13.2
14.0
13.3
12.3
13.0
13.6
15.1
Domestic Production,
Conventional
(75% of Total)
7.5
6.3
7.3
7.8
6.7
7.4
7.6
9.5
9.2
10.2
10.3
10.0
10.5
10.0
9.3
9.7
10.2
11.3
B-7
-------
Our model is based on the concept of annual average capacity which is
defined as the average between the capacity existing at the beginning of
the year and the capacity existing at the end of the year. The annual
average capacity estimates are made separately for mills which are in
operation and those on standby. The average operational capacity for any
year is driven by the following identity:
Production = Operational Capacity x Capacity Utilization Rate
Conventional production (derived in the previous section) and the
capacity utilization rate are both exogenously determined, and together
they determine how much industry capacity must be in operation in order to
meet demand. The average capacity estimates are not directly comparable
to industry capacity estimates taken at a single point in time since the
average capacity pertains to the average amount of capacity that must be
in operation throughout the entire year. Fluctuations in capacity during
the course of the year are not taken into account in this analysis, so
that many combinations of shutdowns/startups could yield the same average
for the year. The average capacity utilization rate in 1982 was
65 percent (the basis of which is described below). We judgmentally
assigned values for the rate over the entire projection period, as
follows: 60 percent for 1983 and 1984, 65 percent for 1985 through 1987,
70 percent for 1988 and 1989, and 75 percent for 1990-2000. These values
were based on the yearly changes in 'demand for conventionally-milled
uranium and reflect increases where noticeable increases in demand take
place.
How the year-to-year changes to the estimated average operational
capacity should be made are determined by the following equation:
AOCt = AOCt_i - OCt + AAOCt
where: AOCt = Average operating capacity in year t
OCt = Obsolete capacity in year t
AAOCt = Change in average operating capacity
Solving this equation for AAOC, if the calculation is positive,
then an addition to average operating capacity is made. This can take
place in one of two ways - either mills on standby can reopen or new mills
can be constructed. We have assumed that no new mills will be introduced
until all the standby capacity has been reopened. If the calculation of
AAOC is negative, than a market closure takes place which, thus,
increases the level of standby capacity which is available for reopening
in the future. In this manner, one can see on a year-to-year basis if the
changes in average operating capacity required to meet demand (exogenously
determined) result in market closures, reopenings of existing mills, or
startup of new mills. All changes are assumed to take place immediately
at the beginning of each year, so that the mathematical relationship of
production, capacity, and utilization rate still holds for each year.
B-8
-------
Obsolete capacity in any year is estimated by multiplying an
obsolescence rate by the prior year's average operating capacity. The
assumed obsolescence rate is .047, based on an estimated average mill life
expectancy of 21.3 years. Generally, the life expectancy of a mill is at
least as long as the life of the surrounding ore deposits (Lo81). Based
upon a sample of 11 mills, an average total life was calculated by adding
the actual years of operation with the expected remaining life of the
surrounding ore deposits. This calculation resulted in an average mill
life expectancy of 21.3 years.
By estimating the yearly closures or additions (reopenings or new
mills) to operating capacity, we can keep a running tabulation of existing
mill capacity and new mill capacity in operation for each year. These
estimates provide the basis for segmenting the total conventional
production into that taking place at existing mills versus that at new
mills. The same average capacity utilization rate is applied to the
respective operational capacity estimates to yield production at existing
and new mills.
Table B.5 presents the complete set of projections for the
conventional milling sector. Before these projections were made, however,
we had to estimate the average operational and standby capacity for 1982.
We used two alternative methods for estimating these values, with both
methods producing virtually the same estimates. In the first method, we
used data from the 1982 (DOE82) and 1983 (DOE83c) Statistical Data of the
Uranium Industry. This source presents capacity estimates for mills in
operation as of January 1 of each year. As of January 1, 1983, 14 mills
were in operation with a total capacity of 33,650 ST (30,600 MT) ore/day.
DOE estimates that this ore capacity corresponds to about 9,000 to
13,000 ST t^Og per year. Assuming the midpoint of the range and
converting to MT results in capacity of 10,000 MT l^Og/year for the
14 mills in operation. There were also 10 mills on standby as of this
date representing ore capacity of 19,200 MT ore/day. To convert this
estimate to MT of 1)303 per year, we assumed the same ratio of ore/day
capacity to I^Og/year capacity as for the 14 mills in operation. This
assumes that the product of the average ore grade and the average uranium
recovery rate is the same for both sets of mills. The result from this
calculation is that there were 6,300 MT l^Og/year capacity on standby
as of January 1983. This same procedure was repeated for data presented
in the 1982 report. As of January 1, 1982, 20 mills were in operation
accounting for an estimated 18,100 MT l^Og/year capacity, and 3 mills
on standby representing capacity of 1,600 MT l^Og/year. Since average
capacity is determined as the average of the capacity at the beginning and
end of the year, we used the average of the January 1, 1982/January 1, 1983
estimates to derive the capacity for 1982. The results were 14,100 MT
1)303 per year for operational capacity and 4,000 MT l^Og per year
for standby capacity. Since production at conventional mills in 1982 was
9,200 MT U30g (DOE83c), the capacity utilization rate was estimated as
65 percent.
B-9
-------
d
0
•H
CJ
3
O
PJ
^2
n4
>*
4-1
CJ
CO
<3£>
. oo
^"| £p
r~1
2 4H
Z 0
U
33
>s
§1
^•^
U_l ^H
0 °
. yj
o r&
-_j f3
lu n)
S ™
""^ J§
2 ^^
Qj ^^
d
•rl
0)
CO
CO
"I
pq
OJ
rQ
H
d
o
w
o
3
8
f^i
•»
5
cO
4-1
(1)
ft
O
CU
-d
01
d
0)
ft
o
cu
a!
4-1
^
s
00
a>
od
,
0) -H
iH CJ
O cO
CO (X
0!3
d ^d
-------
The second method was to calculate the sum of the individual mill
capacities, expressed in l^Og/year, directly for the mills in
operation and on standby for the same two dates, based on individual mill
capacity estimates contained in a report prepared by the Colorado Nuclear
Corporation (CNC82). The estimates for January 1, 1983, using this method
were 11,700 MT l^Og/year for operational capacity and 6,000 for
standby capacity. For January 1, 1982, the capacities were 16,000 for
operational and 1,500 for standby. The average of these two sets of
estimates, yielding the 1982 annual estimate, were 13,900 MT U^Og/year
for operational capacity and 3,800 MT u^Og/year for standby. These
estimates were each only 200 MT l^Og/year different from the first
method using the DOE data. We selected the first set of estimates since
we could use the same estimation procedure on past or future DOE data to
assemble a consistent set of estimates. These estimates for 1982 are
necessary in order to estimate the obsolete capacity and the market
closures for 1983.
The projections presented in Table B.5 indicate the following about
future uranium industry activity. In response to the continuing decline
in demand for conventionally-milled uranium through 1984, we project that
additional market closures will occur in 1983 and 1984. A drop in
production in 1987 will also result in market closures for that year.
Conventional mill production will not return to its 1982 level until
1990. Standby capacity is sufficiently large in relation to expected
growth in demand so that it is not completely exhausted (i.e., reopened)
until 1992, the year in which new mills are first introduced. Cumulative
uranium production from 1983 through the year 2000 totals about 160,000 MT
U30g, which translates into about 175 million MT of mill tailings,
based on an average ore grade of .1 percent and an average uranium
recovery rate of 93 percent. Approximately 150 million MT of tailings
will be generated at existing mills and 25 million MT at new mills.
These projections are based on a series of judgments about the
relationship of different parameters to one another and the values
selected for these parameters. Based on these judgments, we believe that
the projections are reasonable. A different set of judgments will clearly
result in different projections, which may or may not be a more accurate
presentation of the industry's future. For instance, based on the
assumption that new mill capacity will not be introduced until all the
mills on standby have reopened, together with the estimates of industry
demand to be supplied by conventional mills, we estimate that new mills
will not be required to begin operations until 1992. This does not mean
that we believe it is impossible or even highly unlikely that a new mill
will begin operations before 1992. This projection does mean that if one
believes that both the constraint on new mill capacity presented by
standby capacity and the demand estimates are reasonable, then there is
enough standby capacity available so that new mills need not become
operational before this time.
B-ll
-------
As explained in Chapter 2, there is a great deal of uncertainty
associated with making long-term projections of the uranium industry. The
primary purpose of these projections, however, is to establish a
reasonable baseline from which we can estimate the incremental economic
impacts of tailings disposal. The projections are not necessarily
intended to be a highly accurate forecast of the uranium industry
activities, although we attempted to put together the best forecast we
could within the constraints of time, financial resources, readily
available data, and the inherent uncertainty of such a task.
B.2.3 Uranium Prices
An annual forecast of uranium prices is required to perform the mill
closure analysis presented in Appendix A. Since this analysis estimates
future revenues of model mills, the price that is needed is that for
deliveries of uranium each year. This price contrasts with the more
widespread use of market uranium prices which provide the base for
consummation of long-term contracts. Since delivered uranium prices are
projected by the EUREKA model, we relied on the two sets of computer runs
performed by DOE to provide a basis for this projection. These two
projections of delivered uranium prices for the cases of pure price
competition and utility preference are presented in Table B.6. These two
sets of estimates are virtually the same for 1983 through 1986, but
thereafter they diverge significantly. As discussed above, the most
likely point between these extremes is not readily discernible.
Therefore, we took the average of the two price projections for use in
this RIA. The average of the DOE estimates was escalated to 1983 dollars
from 1981 dollars by a factor of 10.8 percent, the estimated change in the
GNP implicit price deflator (DOE83b).
For comparison, we present the market price projections made by the
Colorado Nuclear Corporation in November 1982. Although market prices may
differ substantially from delivered prices in the short-run since
contracts for deliveries in the near-term may have been established
several years ago when conditions in the uranium industry were much
different, in the long-run the two should converge reasonably closely or
at least follow the same trend. The Colorado Nuclear Corporation
projections are also based on the output from the EUREKA model. The
market scenarios selected from this study are the two that most closely
correspond to the two DOE scenarios. Mid-case demand, although different
than the DOE demand projection, was assumed under the alternative import
scenarios of no embargo and a 37 1/2 percent import limit. These two
market price projections are displayed in Figure B.I. As the figure
indicates, market prices for both scenarios reach about $90 per pound of
U30g (January 1982 dollars) by the late 1980's, then fall to about $50
per pound by the early 1990"s. At this point, the two projections
diverge. Under the import limit scenario, the price increases to about
$115 per pound by 1996, before dropping rapidly. Under the no embargo
case, the market price increases to about $60 per pound by 1996, drops to
about $35 per pound by 1998, and increases again to more than $50 per
pound in the year 2000. Our projection of delivered uranium prices falls
between these two cases.
B-12
-------
Table B.6. Annual Average Delivered Uranium Price, 1983-2000
($ per pound of
Year
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Pure Price Competition
Case (1981 $)
26.23
32.88
38.33
60.71
67.03
69.05
64.02
59.63
54.14
47.91
47.54
47.00
47.49
46.94
71.81
68.26
64.20
60.26
Utility Preference
Case (1981 $)
26.28
33.15
38.44
62.88
82.54
98.81
102.20
98.93
93.73
86.84
88.28
92.10
95.36
98.15
96.62
92.85
87.18
83.98
Average
(1981 $)
26.26
33.02
38.39
61.80
74.79
83.93
83.11
79.28
73.94
67.38
67.91
69.55
71.43
72.55
84.22
80.56
75.69
72.12
Average
(1983 $)
29.10
36.59
42.54
68.47
82.87
92.99
92.09
87.84
81.93
74.66
75.24
77.06
79.14
80.39
93.32
89.26
83.86
79.91
Source: EUREKA computer runs prepared by U.S. Department of Energy,
Energy Information Administration (Gene Clark), July 11, 1983.
B-13
-------
140
120
100
80
tvl
co
tn
19
-3
u
•»—
V.'
20
I i
I I I I III! I I < I I I 1 I
37JS Import Limit
Market Price
No Embargo
Market Price
r i i
i till i i i t I i
\ l i
1931
1985
1990
Year End
1995
2000
Source:
Figure B.I. Alternative Market Price Projections
by Colorado Nuclear Corporation
Colorado Nuclear Corporation and Pickard, Lowe, and Garrick, Inc.,
Natural Uranium Demand, Supply, and Price, 1982, November 1982.
B-14
-------
B.3 Impacts from Control-Caused Closures
As presented in Appendix A, some of the economic impact cases will
result in mill closures caused by the tailings disposal cost. This
section estimates the effect that these control-caused closures may have
on the ability of the uranium industry to supply the market with the
amount of uranium that is demanded. Control-caused closures (assumed in
this analysis to be permanent) will reduce the amount of existing mill
capacity which, in turn, could shift production to nonconventional sources
or imports or require additional (from the baseline projection) new mills
to be introduced.
With promulgation of these standards scheduled for the fall of 1983,
we assume that all control-caused closures will take place in 1984. The
initial response to any control-caused closures is for an equal amount of
standby capacity to immediately reopen in 1984, the net effect being that
the level of average standby capacity in 1984 is reduced by the amount of
closures. As explained in Appendix A, the closure analysis is identically
performed for both mills in operation and those on standby since the
decision to operate in the future is basically the same regardless of
whether the mill is currently operating or not. The closure analysis does
not distinguish whether an estimated closure is for an operational or
standby mill, and even if it did, the effect on industry capacity would be
the same. In other words, a mill in operation closing and being replaced
by a mill on standby reopening is the same as a mill on standby being
permanently removed from the average standby capacity column.
With the 1984 level of average standby capacity reduced because of
the closures, this reduces the amount of capacity that can be reopened in
the future in response to increased demand or obsolete capacity.
Consequently, the year when all the standby capacity is exhausted and new
mill capacity begins may move up as a result of the closures. In this
situation, any potential shortfall in conventional mill production due to
the closures would be avoided by additional production at new mills.
However, we have added a time constraint on the introduction of new mills
which may allow this potential shortfall to occur. We have assumed that,
in the case of control-caused closures, no new mill capacity beyond that
projected in the baseline case can become operational before 1990. This
constraint reflects the fact that it takes several years to bring a new
facility on line, and that in the short-term, utilities will most likely
seek other sources of supply - imports, nonconventional, or the secondary
uranium market - if existing conventional capacity cannot deliver the
amount demanded. If this new mill capacity constraint is reached, the
shortfall occurs and we assume the demand is met by one of these other
sources of supply. We do not specify which source of supply will result
because, in all cases, no additional mill tailings at conventional mills
will be generated, so that we are indifferent as to what the exact
response will be. In 1990, this constraint in new mill capacity is
removed, and if a shortfall is predicted, then additional (beyond the
baseline) new mill capacity is introduced in that year to eliminate the
shortfall.
B-15
-------
The results of the mill closure analysis indicate that control-caused
closures are expected in only 7 of the 25 economic impact cases. In six
of the cases, one small model mill, or about 300 MT l^Og/year
capacity, is estimated to close. In the seventh case, two small model
mills, or about 600 MT V^Og/year capacity, are estimated to close.
Tables B.7 and B.8 present the projections of conventional mill capacity
and production for each of these two closure situations, respectively. As
these tables indicate, the reduction (from the baseline) in the 1984
average standby capacity resulting from the control-caused closures is not
large enough to create a shortfall so that there is no impact on the
ability of the conventional mill sector to meet uranium demand. The
introduction of new mill capacity still begins in 1992 as in the baseline
projection. There is a slight shift in cumulative production (1983-2000)
from existing mills to new mills in each case. In the one small mill
closure case, about 2000 MT t^Og production or 1 percent of the
cumulative baseline production at existing mills is shifted to new mills.
In the two small mill closure cases, approximately 4500 MT l^Og
production or 3 percent of the cumulative baseline production at existing
mills is shifted to new mills.
B-16
-------
i
•H
4->
U
01
O
M
d
o
•H
4->
O
3
%
00
o
fO
fM •> <4-l
IO O
•O CO
d co
cd * d
CO O
H
•rl •> O
CJ CN vH
cd co M
pt jj
cd ** cu
cj co s
H •« O
X CQ
co -d
iH 0) d
cd CQ cd
d cd CQ
003
d
a)
d
3
&
CD
g
cd
4->
a
4-1 •
•H H 01
O -H 4->
U
W
Cd >i
fl 4-1
O iH
•H O
4-1 Cd
•H ft
cd
0
•d
a
cd
4J
CO
r^
2,
0>
a
S
ex
o
0)
00
(1)
0) >>
4J 4-1
0) -H
H O
O Cd
w c\)
OOOOOOOOOrHHrHCNCNCMCO^rin
H H
H H
,-HHHHrHHrHHHHHrHHHrHHHH
OOOOOOOOOCOr^fOrOOOOOfOr-l
OOOOOOOOOHOOHOOOHCN
OOHHC3OOCNOOOOOOCJOOO
OsTOOr-HOOOOOOOOOCOOOO
rHHOOr-HOOOOOOOOOOOOO
OCOOOOOOOOOOOOOOOOO
OOC30C3OOOOOOOOOC3OC5O
oooooooooooooooooo
H H H H H
CT^ OS CT* O> C^ OS ON O CTt CT^ ON CTv CTs CT» CT* ON O
B-17
-------
px.
CO
CU
co
c5
1
co
qt
O
•H
4J
CJ
T^ O
o
M CQ
AH fl
O
•tjj) H
cd cj
. t
•rn
>-. n
4-> 4-1
1-1 0)
3*
CX 4H
cd O
CQ
H T3
S w
3
H 0
O ^-^
•H
rt
cu
d
5
,
00
CO
CU
3
a
o
4-1
O
3
T3
S
OH
CU
z
"O
H
0
H
cd
4-1
fi
4-> •
•rl H cy
CJ iH 4-1
CO 4-1 CO
0* {~^ 0Q
M
O
Jj
•H
CJ
cd
p.
0
•
s?
,
a ±>
0 Tt
•rl O
4-1 cd
•H P.
-ri CJ
>
CU -H
H a
O CO
CQ P.
o c3
fl TJ
^|
a a
OOOOOOOOOCNCOOOOO^-OH
ininsj-oo-a-fncNooooooooooo
t-IHH
HrHHHHHiHtHHrH
ooooooooovoooncooor^nH
OOOOOOOOOHOOHOCOcJrHCN
OOHiHOOOCMOOOOOOOOOO
O«*OOi-HOOOOOOOOr-l CTN C7\ ON ON ON ON ON ON ON ON ON
B-18
-------
REFERENCES FOR APPENDIX B
CNC82 Colorado Nuclear Corporation and Pickard, Lowe, and Garrick,
Inc., Natural Uranium Demand, Supply, Price, 1982, November 1982.
DOE82 U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(82), January 1, 1982.
DOE83a U.S. Department of Energy, Energy Information Administration,
World Uranium Supply and Demand; Impact of Federal Policies,
DOE/EIA-0387, March 1983.
DOE83b U.S. Department of Energy, Energy Information Administration,
1982 Annual Energy Outlook, DOE/EIA-0383(82), (Pre-Publication
Release), April 1983.
DOE83c U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(83), January 1983.
DOE83d U.S. Department of Energy, Energy Information Administration,
1982 Survey of United States Uranium Marketing Activity,
(Pre-Publication Release), July 21, 1983.
Ev83 Evered, J. Erich, "Outlook for U.S. Energy Demand and Supply -
The Role of Nuclear Power," presented at Atomic Industrial Forum
Fuel Cycle Conference, Kansas City, Missouri, March 21, 1983.
Lo81 Telephone conversation between L. W. Long, Battelle Pacific
Northwest Laboratory, and Kevan Deardorft, JACA Corporation,
July 14, 1981.
B-19
-------
APPENDIX C
ANNUAL INDUSTRY DISPOSAL COSTS,
BY ECONOMIC IMPACT CASE AND INDUSTRY CATEGORY, 1983-2000
-------
OOOOOOOOOO1—< t-H •—it—i i—( i—ii—i CM
odoooooooooooooooo
o
w
H
55
o
O
CO
OOOOOOOOO.-H'-i.-HCMCNCNCNC''1— i
^
1
*
r—\
*
CJ
w
m
<;
1983 DOLLARS;
0
CO
o
t— t
£J
a
^J
< H
H co
O O
H CJ
CO
o
&
M CO
! *) (^
M iJ
< M
H a
W J»
C3 W
H
CO
O CO
M |j
M £
<
3
W M
Pi H
5 co
EH M
t3 X
En W
O CO
Z O
M Z
H M
CO hJ
f-H ^
X <
W H
oooooooooooooooooo
ON
•
CO
oooooooooooooooooo
ro
oooooooooooooooooo
C5000C300OC30OOCJOOOOO
OOOOOOOOOOOOOOOOOO
oooo'oo'oo'ooodooooo'o'
o
•
o
o
•
o
OS ON ON ON ON ON ON ON ON ON ON ON ON ON ON ON ON O
r-Hr—Hi—IrHi—Ii-Ht—Ii—Ii—Ii—|i—Ii—Ii—Ii—Ii—1<—1<—tCNt
H
CO
O
CJ O
o
w o
> CM
M I
H co
-------
ONCsiONOOr~-. O
CM CM cs esi i—i
ON ON ON ON ON ON ON ON ON O
CJ
C-2
-------
CO
w
CO
cj
^
CO
H
O
U
iJ
^3
W x-v
2 i
CO JS
hJ
H b
o
H
Z
P
O B-S
U in
CO
H~l
O
j_J
< H
H CO
O O
H cj
CO
O
Z
M CO
hJ .J
M iJ
^£
VDCMOOU^l'-IOOOO'— I
CM
M |
H CO
-------
O
£
CM VO
i— os
oo
oo
CM
•ON
O
in
to
to
to
H
E- w
O O
H U
0000000000
VOVO\C\O\O
i— li— I i— I i-H rH CM
LTi
CO
O
g
H
c/o
en
oo
< M
H g
W S
& W
P Z
es
m
•
CN
t/3
O co
s
CMO-—i
p to
H M
W
ta
hJ
PQ
IS
O co
JZ3 O
M a
H M
CO J
M M
X <
W H
OvOvDvOvOOOOOOOOOOOOOO
l~,r~r^I^r^OOOOOOOOOOOOO
^O vO vO vD vO
OO
cn
co
H
CO
O
O
O
H co
< 00
i4 Ox
O
CN
C-4
-------
O t-~ U~l CM O
co CM CM CN CN
—< •— I i— I •— ICMCMCNICOCMCMCNCNCO
vD
D
o
CO
M
O
en CM CN CN CM
o
o
CM
w
CO
CO
H
CO
o
CJ
CO
o
PH
CO
CO
< H
EH CO
O O
EH O
CO
O
CO
RE
noocororo
OJ
OOOOOOOOOC"lcO<)-|~-r~-t~-av—ivO
i—I i—H
CO
p
o
a
M
fn
O
CO
5=
O
CO
oo
ON
O
co
O
FU
CO
O CO
CD co
H M
D X
P^ W
CJ>
w
,-J
U co
3 O
I—I (s
CO iJ
X
w
IS
fOrorororOOOOOOOOOOOOOO
oooooooooooooooooo
CO CO CO CO CO
H
CO
80
o
M I
H CO
<5 oo
O^
O^
u
C-5
-------
e
o
ON <)- o vo en
<|- m
-------
P
td
O
in c^
-------
oo
VO
ON
CO
00
w
CO
0
„
CO
H
O
O
jj
^
CO
NDUSTRY DISPO
M
Cn
O
CO
1
!j
<$
f
1983 DOLLARS'
o
CO
SZ
O
M
nJ
tJ
M
s
£3
O 6s?
CO
H*^
o
J_J
< EH
H co
O O
H 0
CO
O
z
M CO
.-1 ,J
M i-J
< M
w Cs
pi M
CO
O to
M (J
hJ M
EH CJ3
td M
(X! H
D co
CD ><
Pn W
oo
oo
Csl
vO
OOOOOOOOOCOLOvO—i •—it—i
00
u
a
ffl
O CO
1-1 2
EH M
CO J
M M
X <
W H
OOOOOOOOOOOOOOOOOOOOOOO
oo oo oo oo oo
CO
o-
H
co
O
O O
o
M I
H co
< oo
O^
C-8
-------
O ON oo r-v vo
vO
ON
w
co
co
H
CO
O
C_>
CO
o
CO
l-l
o
CO
CO
8
CO
oo
ON
55
D
O
CO
M
O
v£3v£)vOOOOOOOOOOOOOO CN
o o o o o m
ON ON ON ON ON C7N ON ON ON ON ON CT» ON ON ON ON O
H
CO
O
O O
o
W O
£ «N
M I
H en
< oo
(-3 ON
C-9
-------
I
o «—< *d~
(^ CM
M I
H CO
-------
H O
cn
CM
CO
z
o
oo
M
P
O
O-
W
00
00
H
00
O
U
00
s
00
M
p
>>
g
00
E>
p
z
00
i
z
z
00
en
oo
00
z
o
1-3
,-J
< H
H 00
P Q
00
o
oo
hJ
hJ
H
w
w
00
O oo
M S
S»
Z
W M
Pd H
O 00
H M
P X
pr, [-rl
CN
cn
r-
*
oo
O
P-J
O oo
Z O
M Z
H M
00 J
M M
X <
1*3 H
OOOOOOOOOOOOOOOOOOOOOOO
vO vO NO vO NO
en
•
cn
-------
EH O
oo r- >£3 \D in
m
•
o
O
W
H
SS
O 6-S
O iA
co
<)• vo •—< m <|- i—i o vO f"> •—i ""> i—
ooroovoCMrorocomvor^-i~~
oooooor^r-
CN
o
CO
^
o
tK
CO
EH
CO
O
o
hJ
^
CO
0
PH
CO
M
0
TOUSTRY
M
O
CO
r*
^™S
CO
on
3
1-4
g
CO
oo
o
•— 1"
o
CO
o
. •[
<
0
H
CO
O
1Z.
1-4
,J
M
EH
M
H
P
CO
o
I—I
1— 1
£H
CO
o
CO
j_j
M
a
CO
jj
•y
W M
pi H
ED CO
W
*—l i—I i—I •—I CM f>
-------
o
w
i—ii—irrivDooc*-icvJ{scsi<)-mmvoinminvor-
O os oo r- vo
vO
CM
00
O
o
CO
oo— i
inO
O O
OO
m
•
vO
*— I t — Ir-H
W
co
co
EH
CO
o
< EH
H CO
P P
CO
o
oo
r--
g
CO
M
O
>>
z
CO
P
RS
983 DO
M CO
>J iJ
M H-I
< M
ft.
vD
•
oo
O
CO
CO
Z
O
M
iJ
CO
O CO
Z ,J
M 1-4
z
W H
pi H
p CO
EH M
P X
PK W
ro
00
a
PQ
O CO
Z O
M Z
EH W
CO iJ
t—I h—I
X <
W H
iniommioooooooooooooo
vOvOvDvOvOOOOOOOOOOOOOO
o o o o o
00
in
H
CO
O
O
O
o
M I
H 00
< oo
CTs
o
C-13
-------
<: s^
H O
O
w
00 O ON >£> i—i CS •—< CO i—i i—l
*3" *^" CO CO CO «—< »-H «~H »—' i-H
CO
CO
vD
CM
W
u
CO
H
O
iJ
O
CO
M
P
H
CO
RS
8
CO
oo
ON
O &-S
CO
1-H
O
hJ
££
£8
CO
o
a
CO
w
•—I CO OO CO CO <(• O CSI CN
CM
%
O
CO
O
M
.J
CO
O CO
hJ l-l
< ^
H e>
•z*
W M
I* H
C3 CO
H H
fa [£J
H M
CO hJ
M M
W H
^H-H,-Hr-<.-iOOOOOOOOOOOOO
-------
< B^S
EH O
\£)
vO U"l f—I «—I fS CSJ CM CM
w
CO
H
CO
8
CO
o
CL,
CO
M
O
CO
£3
D
Z
O
CO
o
RS
983 DO
o
CO
o
< EH
EH CO
O O
H 0
CO
O
M CO
rJ rJ
M hJ
< M
H S
w &
& u
CD
Pi-
oooo
LTl
CO
CO
M S
2o
W M
,0 CO
H M
P X
cN
-------
oo
CM
OO
CD
O
983
H O
£^
oo vo CM \D oo \o "~> i —
oo r^- r-- vo U-N .-H i— \ r- <
01 •— i o co oo
CM
CM
a
O
oo
ONCOOOOOr-CSCMCMCMCMCMCSICMi-Hi—I.—I—
CM
ON
O
00
O
00
O
OO
O 00
S= J
W M
Pi H
CD oo
I-H in co co
CM VO
CM CO
w
VO
w
O 00
3 O
H
00
w
g
vDvDvOvDvOOOOOOOOOOOOOO
VO
CM
00
CO
ON ON ON ON ON ON ON ON
ON ON ON ON ON ON ON CO
EH
OT
O
O O
O
W O
> CM
M I
H CO
-------
CO CO CO
CO
ON
CM
w
CO
CO
H
CO
o
CO
o
p-l
CO
M
o
CO
;=>
«
RS
983 DO
H
a
s
o
CJ
CO
M
Q
CO
o
CO
o
CO
2*
M s
PS W
oo oo
i—I CM
CMCO-—i
CN
CM
CTs
VO
o
CO
o
o
CO
o
co
O CO
K i-J
W M
PS E""*
C3 CO
H M
p X
-------
EH O
o
CO
w
u
H
CO
O
O
CO
g
CO
o
w
Z
o
CO
M
o
< H
EH CO
O O
EH CJ
CO
o
Z
00
CO
H g
W &
« w
^3 Z
EH
P
fc
oo oo vo r-~ in m
i—
-------
ON i— m
CO 1^- P--
r-
•
co
O
w
O
o
co
CM
O
W
CO
u
CO
H
CO
o
o
< H
H co
O O
H O
to
O
•
I—(
ON
CO
O
P*
CO
M
P
g
CO
g
RS
983 DO
M CO
1-3 1-3
M 1-4
-------
r-OvDOOi— ICNOOrO<^O"~lM3ONi— ICNr-.COm
CN
CO
W
to
en
H
to
O
to
O
PL,
CO
!=>
Q
55
§
O
to
§
iJ
CO
25
O
O
W
EH
SS
O
CJ
H to
C O
H 0
tO
O
M CO
Oi
p
H
oo
O to
Z hJ
W
to
X
i— lOOOOCSC-JCNlCMCNICNCNCSlCNCMCNCNCS
OO
OO
O
CM
O
s
PQ
O to
Z O
H M
to i-J
l-l M
X <
W H
ooooooooooooooooooooooo co
oo oo oo oo oo -*
H
to
O
°§
U O
> CM
M I
H CO
-------
COr— co
2 hJ
KH ^-1
l-J M
M S
W
CO CM CM CM •—I
OOv£>>—i
r-
ON
ON
•
CN|
OOOOOOOOOOI^-OOOOOOOOONOOON o
O
W O
> CM
M I
H en
t£ 00
t-3 ON
CJ
C-21
-------
OOvD'—ICM"—lOflOOOOvOlAflt—I O O O
m
W l-l
P^ EH
tD CO
H M
D X
fa td
O CO
a o
i^ i ty
l^ ^*
EH l-l
CO i-5
X <
W H
O 00 OO i—< CM O »— CO P~! CO oocNicMooiri
ONt^-cMcn.— i <± --H oo o CM oo
OOOOOOOOOONVOOOOOOOOOONON,-!
ooooooooof">^cr--cMCMcsmooN
i—I i—I i—I i—H C""J CN
iriinmmu-iooooooooooooo
OOOOOOOOOOOOOOOOOO
in in iri in m
00
en
r-
ro
oo
o
CM
CM
oo
o
r~-
•
CN
CM
ON c^ O^ C^ CT^ O^ O^ C?N O> G\ G^ C?N CTN CT^ ON ON O
i—(i-Ht-Hi-Hi—ti—Hr-ti—1«—( t-H i—*>—(^H«—I*—* •—1CM
80
o
gg
M I
EH CO
<3 oo
1-3 ON
C-22
-------
H O
OOOOOr-vOCv|CMC-lC---ICSIC--J
O
in
O
t-1
< H
EH W
O O
to
O
o
•
oo
oo
i-l vD
O
Pi
H
to
C3
O
8
CO
oo
ON
W IS
Pi w
& z
H
P
En
OOOOOOOOO CM
M I
H co
<£ 00
C-23
-------
VD
Q
W
H
O
CJ>
co
<—<—HONOOvoncMcMcM o
CMOONONOOCMCMCMCMCMCMi—<
CO
D
o
55
RS
983 DOL
8
o
M CO
•J I-J
M I-J
EH £
W r2
{£ W
& 55
OOOOOOOOOON-— i
OOOOOOOOOu-iONOvDvDvOOvOin
•— i i— i •— i ^H es evi m
00
«
I—I
CM
en
Z
0
o
55
5Z
W M
Pi EH
p co
H M
O X
jv, jjq
cs
oo
w
O co
S5 O
I"H !S
H M
CO (J
M M
X cs
M I
H ro
•< 00
(-3 ON
0s*
ON ON ON ON ON ON ON ON ON ON ON ON ON ^D
i — It — li — Ii-Hi — I i— I i — If — li — It-Hi — li — If-HCN
C-24
-------
< 6-8
H O
8
P
vOOOI^OOCNvOOOCSrO
cs
•
O
u~>
00
O S-S
o m
en
t-ICOi—ICNOO
O
cs
CO
o
CO
EH
CO
o
CO
s
CO
M
Q
CO
:=>
o
RS
983 DO
< EH
H CO
O O
EH U
CO
o
l-l CO
tJ rJ
M 1-3
fn
vr>
oo
00
•
CO
O
CO
O
Pn
CO
Z
O
M
d
CO
O co
SS rJ
M rJ
Wg
pi H
CD co
H M
P X
00"—i
oo
W
PQ
EH
O co
tZ O
M Z
H M
CO n4
M M
X <
W H
irimmminooooooooooooo
vOvOvDvDvOOOOOOOOOOOOOO
O O O O O
CM
ro
CO
O
O O
o
CTv CT% CTN 0s* CT* CTN CTN CT*
O"* ON
ON ON ON ON ON
a
C-25
-------
APPENDIX D
REGULATORY FLEXIBILITY ACT CERTIFICATION
-------
Appendix D
Regulatory Flexibility Act Certification
The proposed standards for uranium mill tailings at active sites will
not have a significant impact on a substantial number of small entities.
The basis for this finding is that of the 27 licensed uranium mills, only
one qualifies as a small entity, and this mill will not be impacted by the
standards. Almost all the mills are owned by large corporations.
Table D.I lists each of the mills, the operating company, the parent
corporation of the operator, and the employment of the parent corporation.
Based on the Small Business Administration's generic small entity
definition of 500 employees, four of the parent corporations could qualify
as small businesses. However, for the reasons explained below, we have
determined that three of the mills owned by these companies are not small
entities, while the fourth will not be affected by the standards.
American Nuclear Corporation - This company is a small business based
on the SBA generic definition since it has only 125 employees. American
Nuclear is a partner with Federal Resources Corporation, a company with 600
employees, in the ownership of the uranium mill in Gas Hills, Wyoming. The
Tennessee Valley Authority, which has leased the mill from Federal-American
Partners since 1973, has agreed in principal to buy the mill and the
uranium properties in the area. According to the Regulatory Flexibility
Act, a small business is one which is independently owned and operated.
Since this mill is not independently owned by a small business, it is not a
small entity.
Reserve Oil and Minerals Corporation - This company is a small
business since it only has a handful of employees. However, since it is a
partner with the Standard Oil Company of Ohio in the Seboyeta, New Mexico,
mill, the mill is not a small entity.
Energy Fuels Nuclear - This privately-held company has 450 employees
and owns about 60 percent of the Blanding, Utah, uranium mill. Two Swiss
utilities own the remaining interest in the mill (Engineering and Mining
Journal, November 1978, p. 125). Union Carbide is currently negotiating
with Energy Fuels Nuclear to buy a majority interest in the mill. Since
the mill is not independently owned, it is not a small entity.
Bokum Resources Corporation - This company is in a state of
bankruptcy, and only a skeleton staff of employees exists. They are
currently in litigation with a utility which has contributed to the
bankruptcy. Since the mill at Marquez, New Mexico, has never operated and
has no plans to operate for several years, there are no mill tailings and,
therefore, no control costs to be incurred by this company. Therefore, the
proposed standards will have no impact on this company.
D-l
-------
c
o
•H
UH 4-J
O CO x~
IH CO
41 p CO
e o CD
E-. o s
0 0
a££
E 01 ^
ij IH
CO
PH
£
0
•H
4J
CO
IH
O
&
IH
O
0
4-1
C
IH
CO
PU
^J
0
to
IH
QJ
O-
o
1— 1
, — 1
•H
Jgr
i-H
t— 1
•H C
S 0
§4-1
to
•H 0
C 0
(0 ,J
IH
£3
VO -H
i-H O
c •
0 Pi-
co |H
•H 0
•0 O
Ed
01
i~1 IQ
4-1 'H
I-H X>
CO p
4) CO
IS CJ
C
o c
g *H
o c
o o
•
C* .
IH
0
O
01
. -0
p. .H
P X1
0 iH
O CO
0
IH
4) C
4-1 O
4-1 >iH
0 C
0 p
8
^
>^ o
4-1 0
• iH
O -
c
C co
0 >
C co
CO IH
O PZ>
C°l~) l-H
CNI
V
•
<—. P-
O P
•H O
JC O
o
^ CO
1 — 1
• CO
O IH
C_> 0)
c
l-H »|H
•H ^
O
T3
P l-H
CO -|H
TD O
c
CO 0)
4-1 >
cn P
4) CO
f O)
t-H Pi
01
IH
Ol
CO
Ol
fv;
1
0
•H
X!
0
Ul
y
2
»*
CO
4-1
01
>-j
O
41
C/>
m c,
in
•
O
o
O T3
C ' — |
1— I QJ
»H
-l*H
CO .C
QJ O
U -H
J_j fy|
3
0 0
cn *H
QJ 4-)
& C
03
O « — i
& 4-J
£j ^
*
PL
Jj
O
u
}_(
tfl
QJ
t— t
CJ
3
& 03
X)
QJ O
4J o
•H CO
C C
ED -<3
y
^ 3-
*• &
^
u •*
O p
4_j
X! CO
U &
3 3
•C i — i
O CQ
•— i CN .— <
V
•
• P-
O P
0 0
CJ
. 60
PL C CO
P -H QJ
O q u
O *H p
^ 3
01 0
41 01 CO
O .V 4>
0 CO K
S *->
1 co E
P 41 3
P E i^
01 O O
^ ^ pq
•
a
P
o
O • p.
0 p
v^ cj o
03 O
QJ W>
r- 1 C W
CJ «H QJ
SCO
JS 3
QJ O
QJ QJ CO
O ^ QJ
O 03 ptf
3E! -*-1
i co g
JH QJ 3
IH £ ,^;
QJ O O
^ K PQ
2-
»2
•s
QJ
^
03 S
t--' 2
*S
03 [s *•
• H N
CO "^ QJ
0 C 3
^ 1-1 ^
*^ ^ IS
| CC-I^^^^CN, CNCsJin«^HCNC-10-
-H V V V O- """
.
o
o
CD /-^ C
•H O O
C -^ co
p ^^ • -1-
O .C O- • -C
MH ^ P CX (jq
•H P -OP
i-H 03 • f^ ^^ O**"^ • tO
CO QJ O V-t • C^ *U O^ *r*t
C_/ t~^ CJ O C^< ^ "^— ' Wt C
CJ C^ W QJ M O O ^
4J U-rx-^ P ^ OCJCO'fHCjO
COCO ^1* QJOOO^OJM MH
QJ N*-' • T3 SC 3 i— ' 4-J U -H
^ i — i • CL co 4-1 O »f-i QJ O O u %H i — i
£-HOjH •i—*hj •fl^CCiDCOSQJMHtO
PCCOD-OJ CJ- •H'OQJ^r-H'HC;
-, I-H E C CO CO O CO 41
*O CJ41C60^co3OPLp *H p C J^
• COCOP COcoEi— I41P4JO4-I
c/)COCOX41Oi-HC34)*O4JC *i-l 3
• 4_) o »H X C »H 4->O41*C41g41CO
i^ rn f 1 p , [T"; fy] ^ ^ rj> ^ p , PT , ^ r_^ ^\ rr.
J>i
4-1 CO
•H p
P . 41
0 XI C • -^
Xi 4-1 4-1 PL >,
j_j ^j . ~) ^_| i_j (^£)
3 03 03 O JH
^C QJ *^ P-i C_3 QJ
i — i CO G
>, U QJ C W W
QJ 3 0 * IH 03 QJ
r- 1 P IS- JHO030 CC
i— J QJ T3 3 O QJ -H -i-t -H
03 QJ C04J O i— i IH ^03
^r C •r-H|_J»WC>OOQJ 4-J
O CbQJ P-CJC3E JH C J-i
§in ttl *rH ^ ^C QJ 3 QJ
o q i *o o >
WCI U W)O3«HCr-H C^O
WlOO K^I— 1 tO^IntO >H PH
QJVnO CW)-O OP C04JCJJ-1QJ rC^O
C QJ C XQJOi— |o3^co*'O 4-iOC
QJ pC O ^ C *H 4-J t— i to QJ QJ CO O O
E~*OO WWo^^P-iQlSf3^ pC^ilS
s^
X ^
H X H
H X p H >> *•
Q** E-^E"* sts^sjn
C/3 CO "^ ^3 rv QJ
•H >» ^^H QJ *v~ ^>
^M4J 4-J->p r-H 4-JCO CO«H
4_) CO *H C W) ^ i-H <^ >rH i — 1 i — I ry;
C ^ O *i-( C •* C^ *•"* ^ C ' — ' < — I
O O 'H •— ' > -H *H -H P
ECOCO PMTJCO ~co ^Cb^ KQJ
QJ C i — ' C OO •& ^£ *O > — i ""O
&0 C •— ' X«0 (0 C JH «— p-j
^_(
s-i SH ^
^ 3*
^ ^ >H C
IH ^i ^ *H
QJ 4-J CO
> .H ^ CO
•i-l C_? CO CQ
0^ i — <
^s, f— ( ^
IH flJ "H QJ
QJ M ffi r-l
T3 M-< (H
^ <4-i W «H
O CU 03 ^C
PL( •" J O CO
r^ i--
-1 ""
• •
0 0
u o
r-H i-H
•H -H
C O
1^1 C
4-» 0
d> C
o r~>
•
o
p
o
• H
4_J
CO
• IH
0 0
CJ i—1
CX
co X
• iH
E co
4-1 CO
O P
P 01
4-1 C
•
1 — 1
co
a-
i — i
C
• H
T3
4)
00
P
0) »H ' 4)
P-I ^ g
c S
CO -
CO 4-1
PQ P
41
>, CO
O) 01
i-l P
•H -U
C/) P£H
4-1
e
o
Pu
D
P
•o
C
co
O
o
0
c
0
o
CO
^^ V
>:
3'
o c
4-1 CO
O
T; p IIH
O) CO p
§ % E
o o <
3 1
CO & i~l
• H CO
CO p
P I-H 01
01 01 T)
•O 3 4)
C PH fc
•r-l
to >-, E
E oc o
01 p p
p 0) MH
C
Ql [tj I-H
-C l-H
4-1 XI TH
*J E
•O -H
C 3 41
co x:
60 4-1
- c
CO 4-1 3
0) CO X!
i — > •H
O 4-1 O
DO 4-1
& 60
O) 41
WC I-H
i-l P.
Ol >-> -i-l
D I-H O
EI-I 4-1 C
e TH
>-, 01 P
60 p Q
IH P
0) 3 C
CO —1
W
co -a
!>-, -iH 0)
X! 41
Ol P
C -i-l CO
41 X5
UP CO
p CO CO
0) O • .C
P- .-H
C I-H >%
O O -iH 4-1
VJO *H E 'H
pi p
•O p QJ O
4i x; .c
P 4J 4-J
5 • 3
O co c
E 3 4-1
C 41
00 CO -iH 4)
C CO CO
•r-l -lH >, CO
T3 15 4-1 41
C CO -rt C
CO PC
i-H O O 01
pa S T-! H
4-1 CO
4) E 41
X- r^ X*
H X> cfl E-i
.Q CJ
.^ s^'
01
4-1
o
4-1
CO
I-H
I-H
•H
E
E
3
•H
C
CO
^_t
3
p
• H
01
f
4-1
C
•H
4-1
CO
0)
P
4)
J_l
C
•H
CO
4-1
•H
UH
O
4J
C
41
0
p
4)
PL.
o
oo
•o
I-H
o
CO
en
CO
x:
CJ
•iH
p
aj
O
41
i — i
• W
CO
P l-H
41 CO
C P
4J 41
P e
CO 0)
Pu o
/^
•a
V
•
cfl
e
00
o
o
r.
^
C
CO
a
0
o
X!
O
p3
0)
P
ptj
D-2
-------
TECHNICAL REPORT DATA
(Please read Instructions on the reverse before completing)
1. REPORT NO.
EPA Report 520/1-83-010
2.
3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
Regulatory Impact Analysis of Final Environmental
Standards for Uranium Mill Tailings at Active Sites
5. REPORT DATE
September 1983
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
U.S. Environmental Protection Agency
Office of Radiation Programs (ANR-461), Washington, DC
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
12. SPONSORING AGENCY NAME AND ADDRESS
13. TYPE OF REPORT AND PERIOD COVERED
14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
The Environmental Protection Agency has promulgated health and
environmental protection standards for control of uranium and thorium
tailings during ore processing operations and for final disposal. These
standards apply to tailings licensed by the U.S. Nuclear Regulatory
Commission and the States under Title II of the Uranium Mill Tailings
Radiation Control Act of 1978 (Public Law 95-604). This Regulatory Impact
Analysis examines the costs, benefits, and economic impacts of alternative
standards and presents the rationale for the selection of the final
standards.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b.lDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Group
uranium mill tailings
radioactive waste disposal
Uranium Mill Tailings Radiation
Control Act
regulatory impact analysis
economic analysis
environmental standards
18. DISTRIBUTION STATEMENT
Release Unlimited
19. SECURITY CLASS (This Report)
Unclassified
21. NO. OF PAGES
258
20. SECURITY CLASS (Thispage)
Unclassified
22. PRICE
EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION is OBSOLETE
-------
|