United States
Environmental Protection
Agency
Office of
Radiation Programs
Washington DC 20460
EPA 520/1-82-023
March 1983
Radiation
&EPA
Regulatory Impact Analysis
of Environmental Standards
for Uranium Mill Tailings
at Active Sites
-------
EPA 520/1-82-023
Regulatory Impact Analysis
of
Environmental Standards
for
Uranium Mill Tailings at Active Sites
March 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 2-24
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 3-8
4. Benefit-Cost Analysis 4-1
'4.1 Cost Analysis 4-1
4.2 Benefits Analysis 4-6
4.3 Cost-Effectiveness Analysis 4-16
5. Industry Cost and Economic Impact Analysis 5-1
5.1 Industry Cost Analysis 5-1
5.2 Economic Impact Analyis 5-14
6. Selection of Proposed Standards 6-1
6.1 Operations Standards 6-1
6.2 Disposal Standards 6-6
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, 1980-2000
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, 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 developed under
Title II.
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 after the disposal of tailings. This report presents a
detailed analysis of standards for disposal only, since the analysis
required for the operations standards is very limited. The analysis for
the operations standards is limited because most of the requirements
reflected by the operations 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, the Act 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 Environmental Impact Statement
(EIS) which accompanies the RIA for more information on the analysis of
the operations standards.
Methodology
The selection of the proposed standards is based primarily on an
analysis of the benefits and costs associated with the disposal of uranium
mill tailings. This analysis determines what level of control of the
hazards is optimal. An economic impact analysis which estimates the
economic consequences of incurring such costs was then used to tailor the
implementation requirements so as to mimimize these consequences, and to
determine that the optimal values for standards could be reasonably
imposed.
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. We estimated costs for
several tailings disposal methods on the basis of model piles. These
S-l
-------
methods assume different degrees of earthen cover and surface
stabilization as the technique for providing long-term control. In the
benefits analysis, the health effects averted by control of radon
emanation from tailings piles is the only benefit we can quantify.
However, we believe that the most significant benefit is the deterrence of
misuse of the tailings by the public. In order to relate the cost
estimates to a measure of the overall benefit of a disposal method, we
developed an effectiveness index which rates each disposal method
according to its effectiveness in providing four specified control
classes: prevention of misuse, radon control, prevention of the surface
spread of tailings, and groundwater protection. A cost-effectiveness
analysis was used to evaluate the average and incremental costs per unit
of this effectiveness index for each disposal method. Based on this
evaluation of incremental costs, we selected disposal methods which
represent an optimal level of control.
Disposal standards were then developed which reflect the level of
control that was determined by the cost-effectiveness analysis. Since the
standards are generally applicable technical performance and containment
standards rather than design standards, they do not specify particular
methods of compliance. The determination of implementation requirements
for the standards, such as the grourtdwater protection requirements at
existing mills, was based on considerations beyond those addressed in the
cost-effectiveness analysis and is discussed in Chapter 6.
Alternative Standards
Table S.I lists six 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. We feel that the combination of
these two requirements will satisfy the objectives of misuse prevention,
radon control, prevention of surface spread of tailings, and groundwater
protection. Each of these alternatives will meet the control objectives
to a different degree. 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. Table S.I summarizes the benefits of each
alternative standard through the use of several quantitative and
qualitative measures.
Each of these alternative standards assumes a uniform level of
control for both existing tailings and new tailings. In this RIA, we have
also analyzed requiring different levels of controls for each tailings
category. These six cases only are presented here to give some
perspective in a simple, yet informative, way on the full range of control
levels and their associated benefits and costs. Table S.2 presents the
costs of each alternative, as well as the control method assumed for the
cost estimation.
S-2
-------
Table S.I. Summary of Benefits for Alternative Standards
Stabilization
Radon Control Water Protection
Misuse Erosion Maximum Risk^a
Chance of Inhibited Avoided of Lung Cancer
Alternative Standards Misuse (y) (y) (% reduction)
I
II
III
IV
V
VI
No controls. Most likely 0 0
Institutional Control More likely 100 Hundred
for 100 years
Radon emission limit Likely Few 100 Hundreds
of 60 pCi/m2s
Controls for 200-1000 Unlikely 1,000 Thousands
years; Radon emission
limit of 20 pCi/m2s
Controls for at least Unlikely > 1,000 Many
1000 years; Radon thousands
emission limit of
20 pCi/m2s
Controls for at least Very > 1,000 Many
1000 years; Radon unlikely thousands
emission limit of
2 pCi/m2s
4 in 102
(0)
2 in 102
(50)
1 in 102
(80)
2 in 103
(95)
2 in 103
(95)
1 in 104
(>99)
' Deaths Avoided^) Groundwater
In first Protected
100 years Total (y)
00 0
700 2,800 100
1,100 Thousands Few 100
1,400 Tens of 1,000
thousands
1,400 Tens of > 1,000
thousands
> 1,400 Tens of > 1,000
thousands
(^'Lifetime risk of fatal cancer to an individual assumed to be living 600 meters from center of a tailings pile.
estimates pertain to the control of 23 existing piles and future tailings projected to be generated
through the year 2000 under the Baseline Industry Demand Scenario. Of the approximately 1400 deaths which are
estimated to occur in the first 100 years under no control conditions, about 450 are the result of the existing
tailings and 950 are due to future tailings.
Source: Derived from Table 4.3 and Chapter 10 of EIS.
-------
Table S.2. Summary of Costs for Alternative Standards
(millions of 1981 dollars)
Economic
Industry Costs, Undiscounted
Present Worth
Costs(a)
Alternative Assumed Control Impact Existing Future Tailings, Future Tailings,
Standards Methods Case Tailings Existing Mills^3) New Mills^3' Total Cost^3^ (10% discount rate)
CO
I
II
III
IV-a
-b
VI
No controls
.5m earth cover,
maintenance for
100 years
1m earth cover,
rock cover on
slopes
3m earth cover,
rock cover on
slopes
H]_-Mj_
3m earth cover, ^2~^2
rock cover on
slopes for existing
tailings and 3m earth
cover, below-grade
disposal for new tailings
3m earth cover,
below-grade
disposal
5m earth cover,
rock cover on
slopes
N
0
129
L51
250
250
943
440
0
59
93
133-610
133-652
476
244-780
42(b)
897
952
1164
1244
1373
1526-1523
42
-------
The alternative standards are expected to inhibit misuse of the
tailings for periods ranging from zero years for Alternative I to greater
than 1,000 years for Alternative VI. Starting from the no control
standard, each, succeeding alternative will provide increasing lengths of
time over which we believe misuse will be inhibited. 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.
Alternatives I, II, III, and IV would provide this protection for zero,
one hundred, hundreds, and thousands of years, respectively. Alternatives
V and VI would prevent erosion of the tailings for many thousands of
years. For radon control, Alternative II would reduce emissions by
50 percent from the uncontrolled state, while Alternative III would result
in an 80 percent reduction and Alternative IV a 95 percent reduction.
Alternative V would also provide a 95 percent reduction in radon
emissions, while Alternative VI would have a reduction of 99 percent from
the uncontrolled condition. 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.I. For groundwater protection, we estimate that the alternative
standards would provide a range of protection from 100 years duration for
Alternative II to 1,000 years or greater for Alternatives IV, V, and VI.
The costs of the alternative standards in Table S.2 are segmented by
three categories of tailings: existing tailings, future tailings
projected to be generated at mills which exist today, and future tailings
projected for new mills. The future tailings are those which we estimate
to be produced through the year 2000 according to the conditions of the
baseline industry demand scenario. Costs were also estimated for an
alternative projection of tailings generation (see Chapter 5). This
breakdown of the cost estimates allows one to see the differences in cost
for each alternative standard by each tailings category.
A range in costs is presented for Alternatives IV and VI 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 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. Alternatives I, II, and III
assume that future tailings at existing mills will be added to existing
piles. Alternative V assumes that both future tailings and existing
tailings are placed in new impoundments with protective liners.
S-5
-------
For cost estimation purposes, Alternative IV has been divided into
two cases which are represented by slightly different control methods
assumed for compliance with the standard. Alternative IV-a assumes that
all tailings are disposed of above-grade with a 3-meter earthen cover and
rock cover on the slopes. Alternative IV-b assumes this control method
for existing tailings piles, but new piles are assumed to be placed
below-grade with a 3-meter cover. The range in the longevity requirement
of this standard of 200 to 1000 years is responsible for the selection of
the two possible outcomes for compliance. The difference in cost between
Alternatives IV-a and IV-b is relatively small since the cost of rock
cover for new tailings piles in IV-a nearly offsets the costs of placing
the tailings below-grade. For the additional cost, Alternative IV-b
realizes the incremental benefit of a longer period of misuse inhibition
than Alternative IV-a since we believe that disposal below-grade will
maintain the integrity of the earth cover for a longer time than rock
cover on the slopes. The benefits of Alternative IV-b may be viewed as
being the intermediate case between the benefits of Alternatives IV and V
(as listed in Table S.I) since it assumes the Alternative IV control
method for existing tailings and the Alternative V control method for new
tailings piles. The longevity requirement of Alternative V, which calls
for controls lasting at least 1000 years for all tailings categories,
forces the moving of existing tailings and the disposal of all tailings
below-grade.
Proposed Standards
Operations Standards
In accordance with the Act, the proposed operations standards for
primary groundwater protection require that tailings impoundments be
designed to prevent seepage of leachate from tailings into groundwater.
Proposed secondary groundwater standards are based on the monitoring and
response concept, consistent with SWDA, as amended. Nondegradation
standards for groundwater are proposed 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 proposed. In addition to the
list of hazardous constituents specified under SWDA standards, the
proposed 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 the proposed 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
proposed standards.
S-6
-------
Disposal Standards
Based on the benefit-cost analysis of control methods, we have chosen
Alternative Standard IV for the proposed disposal standards. The proposed
standards require that control of uranium byproduct materials be designed
to provide reasonable assurance that releases of radon-222 to the
atmosphere will not exceed an average rate of 20 picocuries per square
meter per second. The standards require 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.
The standards require that controls for uranium mill tailings be
designed to be effective for up to one thousand years, to the extent
reasonably achievable, and, as a minimum, at least 200 years.
Benefits of Proposed Standards
Under the proposed 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
many thousands 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 4 chances in 100 of fatal lung
cancer during their lifetime to about 2 chances in 1,000. Also,
groundwater would be protected for thousands of years under the proposed
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 Proposed Standards
We estimate that compliance with the proposed standards, if other
regulatory requirements did not exist, would cost the uranium milling
industry from about 550 million to 850 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, under baseline projection
conditions. These costs are present worth estimates (discounted at a
10% rate) expressed on a 1981 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. The range
of industry disposal costs becomes 450 million to 750 million dollars
under low-growth projection conditions.
S-7
-------
We estimate that the average uranium price may increase from 2 to
8 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. Using our models, we estimate that if mills are forced
to absorb the entire cost of disposal, one small mill may cease operation,
depending on the implementation of the groundwater protection
requirements. We further estimate that under the conditions of a more
favorable cash-flow or a limited price pass-through, this single mill
closure would be avoided. On the other hand, with no pass-through and a
lower cash-flow, two small model mills and a large model mill may close.
These costs are not incremental costs of the proposed 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 (NRC) licensing regulations and State
regulations. 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 proposed standards.
Regulatory Flexibility Analysis
The proposed 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-i
-------
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 EIS. 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 (the Act): "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 proposed
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 proposed standards: control of
releases from tailings during processing operations and protection from
the tailings after disposal. However, this RIA addresses the proposed
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, the Solid Waste Disposal Act, and the Act 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.
Uncontrolled releases during mill operations are limited to releases
of radon since releases of all other radioactive effluents are regulated
under the Environmental Radiation Protection Requirements for Normal
Operations in the Uranium Fuel Cycle (40 CFR 190). Those standards, which
1-1
-------
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 insufficient
knowledge at the time 40 CFR 190 was established. EPA is not proposing
control of radon from tailings during the operational phase since the
health risk varies greatly from site to site and effective control methods
which are economically feasible are not available at existing mills. We
believe that the best approach to protecting people from radon emissions
during operations is for the regulatory agencies to require combinations
of controls at each site that maintain exposures to as low as reasonable
levels.
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" for the control of effluents from uranium mills. Rules were
proposed on June 14, 1982 (47 FR 25682, 40 CFR Part 440, Subpart E), to
provide effluent limitation guidelines for "best available technology" and
to establish new source performance standards under the Clean Water Act.
These proposed rules specify that there shall be no discharge of process
wastewater from uranium mills.
As required by the Act, 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, the Act also requires NRG 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 proposed
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
proposed 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
1-2
-------
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.
Historically, there has been no Federal regulatory control of uranium
mill tailings. Control of tailings was not included in the 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 the Act,
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.
1-3
-------
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
tailings disposal methods 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 proposed 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.
1-4
-------
2. Industry Profile
This section 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-19701s that was stimulated by expectations of rapid
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, and the
potential for increased competition from imports.
In a recent report on the domestic uranium industry, the
U.S. Department of Energy summarized the situation this way: "It is now
evident that the available domestic and foreign supplies for the 1980-1985
period is greater than the needs for those years. This situation is
reflected in the occurrence of a significant drop in spot prices for
uranium" (DOESlb).
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 UF^ conversion
o Isotopic enrichment
o U02 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-19701s 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 U^Qg, 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 (DOE79). Nuclear power plants supply
about 12 percent of the nation's electricity (SP81), or about 1.5 percent
of total energy needs. Demand for electricity increased 3 percent from
1979 to 1980, much less than the 4.8 percent average yearly increase in
demand over the past decade (DOE79). The slowdown in demand may be
attributed to increases in the price of electricity due to higher 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 1980.
After 1973, the number of orders has fallen dramatically, from 25 in 1973
to two in 1978, and none since. Also, 50 contracts for nuclear reactors
have been canceled since 1975, 16 in 1980 alone (BWSla). Many orders were
canceled after the accident at Three Mile Island and were unexpected until
that time. Also, 69 reactor projects were significantly delayed in 1980.
Currently, there are approximately 70 nuclear power reactors licensed to
operate in the U.S., and about 11 plants should begin operations in the
next two years if the licensing process is not delayed (SP81).
2-2
-------
FUEL
ENRICHEDUF
ENRICHMENT
NATURAL UF6 J
A
CONVERSION
TOUF
U3°8
t
ORE
Pu02
MIXED OXIDE
FUEL FABRICATION
rr^l
URANIUM MINES
(UPu)02RODS
SPENT FUEL
DISPOSAL
HIGH LEVEL AND
TRANS URANIC WASTES
i i
EDERAL 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^3)
Year
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
Thousand MT l^Og
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
^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: Statistical Data of the Uranium
Industry, U.S. Department of Energy,
January 1982 (converted to metric tons).
2-4
-------
Table 2.2. Historical Annual Nuclear Plant Ordering
Year
Ordered
Thru 1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
Number
of Plants^)
18
20
30
14
6
13
13
21
25
11
0
1
2
2
0
0
MWe(b)
8,233.0
16,594.0
25,623.8
12,895.0
6,133.0
13,681.0
12,892.8
23,456.0
29,713.8
13,441.0
0
1,270.0
2,500.0
2,240.0
0
0
^a'Does not include units ordered and cancelled
prior to January 1, 1980.
not incude 8 units totaling 301.3 MWe
permanently shut down.
Source: Statistical Data of the Uranium Industry,
U.S. Department of Energy, January 1, 1981,
2-5
-------
Current issues concerning the safety of nuclear energy production,
underscored by the accident at Three Mile Island, plus slower growth in
the demand for electricity generated from all types of fuels, create
considerable uncertainty in projections of the demand for uranium.
Projections made in July 1978 of the annual uranium requirements of U.S.
utilities for the years 1980 through 1986 were reduced as of December 1979
by an average annual amount of approximately 18 percent. Projections made
in 1979 were also reduced during 1980.
In Appendix B we develop two projections of uranium industry demand
for use in this RIA. These projections to the year 2000 are based on DOE
forecasts of installed nuclear reactor generating capacity. These two
projections, referred to as baseline demand and low-growth demand, provide
a wide range of variation. Table 2.3 summarizes both the uranium demand
and reactor capacity projections.
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, exceeding $1 billion for a
typical 1,000 MWe plant. Fuel costs constitute a smaller proportion of
the cost of nuclear electricity, averaging around 10 percent (Ta79). 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 ^303), 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
refers to arrangements that fall outside the contract or market price
categories, such as captive production. Captive production relates to
2-6
-------
Table 2.3. Summary of Projections for Uranium Demand
and Installed Nuclear Reactor Capacity
Year Reactor Capacity Yellowcake Requirements Conventional Mill Demand
(GWe) (Thousands of MT t^Og) (Thousands of MT
Baseline Industry Demand
1980 54 14.2 12.5
1985 96 21.0 16.6
1990 128 25.5 18.1
1995 145 30.1 22.5
2000 175 36.2 28.4
Low Growth Industry Demand
1980 54 14.2 12.5
1985 96 20.6 16.3
1990 122 22.9 16.3
1995 125 22.6 16.9
2000 120 18.9 14.8
2-7
-------
buyers with direct control of uranium properties and accounts for about
one-half of the "other" arrangements for deliveries from 1981 through
1990, according to DOE (DOE82b). Table 2.4 presents the distribution, by
year of delivery, of the types of domestic uranium procurement for the
1979-1990 period. This table shows that about 80 percent of anticipated
uranium deliveries from 1981 to 1990 will be purchased under either
contract or market price contracts.
Before 1975, contract price procurement was used almost exclusively,
while in the 1976-1981 period, procurement shifted significantly to market
price contracts and other procurement. New procurement in 1980 consisted
of 41 percent under contract price, 14 percent at market price, and
45 percent "other." However, new procurement in 1981 was 63 percent
market, 20 percent "other," 7 percent contract, and 10 percent unpriced
options.
Table 2.5 shows the average contract prices for 1981-1990 deliveries
for which U.S. buyers and producers reported price data in DOE's
January 1982 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 1981 and 1982
are included with the contract prices since, as settled prices, they are
similar to contract prices. The average uranium prices, as reported by
buyers, increases from $32.20 per pound in 1981 to $58.35 per pound in
1989. The average price reported by producers increases from $34.65 per
pound in 1981 to $57.35 in 1990.
Table 2.6 presents the average floor price of market price contracts
for the period 1982-1990, as reported by buyers in the DOE survey. The
average floor price, stated in year-of-delivery dollars, increases from
$51.85 per pound in 1982 to $94.60 per pound in 1990. The DOE survey
reports that 63 percent of the 1982-1990 market price commitments have a
floor price, with price floors accounting for 56 percent and cost floors
7 percent.
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
has experienced considerable weakness, declining from a high of $43 to
approximately $17 per pound, as of September 1982. At a price of $17 per
pound, few domestic operations are profitable, even before additional
pollution controls, due to general inflation and the increase in
production costs due to a declining ore grade. Table 2.7 shows the
average annual spot price of uranium.
2-8
-------
Table 2.4. Types of Domestic Uranium Procurement Arrangements
as of January 1, 1982
Year of
Delivery
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1981-1990
Percentage of
Contract Price
72
60
58
36
24
28
26
29
31
31
30
20
33
Deliveries by Procurement
Market Price
22
24
30
48
60
54
56
44
42
39
36
36
44
Type
Other
6
16
12
16
16
18
18
27
27
30
34
44
23
Source: U.S. Department of Energy, Survey of United States Uranium
Marketing Activity, DOE/NE-0013/1, July 1982.
2-9
-------
Table 2.5. Average U.S. Contract Prices & Market Price Settlements
as of January 1, 1982
Year
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
Price Per Pound
(Year of Delivery Dollars)
Buyers
32.20(a)
38.15(a)
43.10
50.45
60.20
51.35
52.05
53.10
58.35
(b)
Producers
34.65
-------
Table 2.6. Average Floor Prices of U.S. Market Price Contracts
as Reported by Buyers
(Year-of-Delivery Dollars)
Year
Price Per
Pound U-0Q
J o
Percent of
Commitments with
Reported Floor Prices
1982
1983
1984
1985
1986
1987
1988
1989
1990
51.85
55.45
61.35
66.05
69.70
76.05
84.65
88.55
94.60
73
75
72
73
70
59
70
75
78
Source: U.S. Department of Energy, Survey of
United States Uranium Marketing Activity,
DOE/NE-0013/1, July 1982.
2-11
-------
Table 2.7. Average Annual Spot Price for Uranium
(current dollars)
Year
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
198200
Spot Price^3'
($ 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
17.00
'a'NUEXCO average annual price.
as of September 1982.
Sources: American Metal Market,
Metal Statistics,
for selected years.
2-12
-------
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.
2.2 Supply
Major sources of supply of uranium in the United States 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, in 1980, the conventional mill share was
85 percent (DOESla), while in 1981 it was' 81 percent (DOE82a).
Sharp increases occurred in the price of uranium in the mid-19701s
that 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. During 1981 and 1982, eight mills, accounting
for capacity of 17,600 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-19701s. 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 1980, 1981, and 1982. Inventory
to meet one year of the utilities' needs is considered to be adequate
(Co79). As of January 1982, utilities were holding 47,900 metric tons of
uranium. This figure is about 6.5 times greater than the estimated 1980
consumption by utilities of 7575 metric tons (CRB81), and about 2.5 times
greater than 1981 total uranium production of 17,500 metric tons.
An additional source of supply of uranium for the United States comes
from imports. Imports of foreign uranium constitute approximately
8 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.
2-13
-------
Table 2.8. Conventional Uranium Mill Nominal Capacity
and Utilization Rates
Year
1975
1976
1977
1978
1979
1980
1981
1982 (Jan
1982 (Sep
NA = Not
Sources :
Nominal Capacity, as of
January 1 of each year
(Metric Tons Ore/Day)
24,180
25,810
28,270
35,520
39,740
44,500
46,300
.) 45,200
.) 31,100
available.
Nominal capacity as of January
from U.S. Department of Energy,
the Uranium Industry, selected
Capacity
Utilization Rate
(Percent)
83
87
75
91
90
NA
NA
NA
69
1 for each year is
Statistical Data of
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 1)303 Equivalent)
All Buy_ers_As_0f Utili_ties As Of
1/1/80l7l781 17T782 1/1/80 "l717811/1/82
Natural Uranium 32,750 40,910 46,450 25,040 34,200 40,000
(Foreign-Origin) (4,810) (4,540) (4,900) (3,080) (3,180) (3,810)
Enriched Uranium 14,700 16,600 10,160 13,790 15,150 7,890
(Foreign-Origin) (360) (630) (270) (360) (540) (270)
Total Uranium 47,450 57,510 56,610 38,830 49,350 47,900
(Foreign-Origin) (5,170) (5,170) (5,170) (3,440) (3,720) (4,080)
Source: Survey of United States Uranium Marketing Activity,
U.S. Department of Energy, July 1982 (converted to metric tons).
Note: Numbers may not add to totals due to independent rounding.
2-15
-------
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 September 1982, there were 27 licensed conventional
uranium mills of which only 16 were operating (deV82). The conventional
mills are located in the western States of Colorado, New Mexico,
Washington, Wyoming, Utah, South Dakota, and Texas. As of January 1980,
21 mills were operating and had tailings piles. Two other licensed mills
(Edgemont, South Dakota, and Ray Point, Texas) had tailings piles but were
no longer operating. The quantity of tailings existing at the 23 sites at
the beginning of 1980 was about 146 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.
\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).
More recently, there are 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.
Concentration ratios for the uranium milling industry are shown in
Table 2.11 for selected yearp 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 McCorporation, 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. In addition
to vertical integration between nuclear reactor manufacturers and uranium
mining firms, there is also considerable vertical integration between
2-16
-------
Table 2.10. Status of Licensed Conventional Mill Sites in the United States
NO
I
State
Colorado
New Mexico
South Dakota
Texas
Utah
Washington
Wyoming
Location
Canon City
Uravan
Seboyeta
Church Rock
Bluewater
Ambrosia Lake
Milan
Marquez
Edgemont
Panna Maria
Falls City
Ray Point
Blanding
La Sal
Moab
Hanksville
Ford
Wellpinit
Gas Hills
Gas Hills
Powder River
(Bear Creek)
Powder River
(Highland)
Jeffrey City
Gas Hills
Shirley Basin
Shirley Basin
Red Desert
Name and /or Owner
Cotter Corp.
Union Carbide Corp.
Sohio-Reserve
United Nuclear Corp.
Anaconda
Kerr-McGee Nuclear Corp.
Homestake Mining Co.
Bokum Resources Corp.
Tennessee Valley Authority
Chevron
Conoco and Pioneer-Nuclear Inc.
Exxon, USA (Susquehanna-Wes tern)
Energy Fuels Nuclear
Rio Algom Corp.
Atlas Corp.
Plateau Resources, LTD.
Dawn Mining Co.
Western Nuclear
Federal-American Partners
Pathfinder Mines Corp.
Rocky Mountain Energy /Mono Power
Exxon, USA
Western Nuclear Corp.
Union Carbide Corp.
Pathfinder Mines Corp.
Petrotomics Co.
Minerals Exploration Co.
Year V
Mill M
Started (
1958
1950
1976
1977
1953
1958
1958
-
1956
1979
1972
1970
1980
1972
1956
1982
1957
1978
1959
1958
1977
1972
1957
1960
1971
1962
1981
TOTALS
lax. Licensed
[ill Capacity
MT Ore/Day)
1,300
1,200C
1,500
3,600
5,400
6,300
3,200
2,000
500
2,200
2,900
800
1,800
640
1,100
680
400
1,800
900
2,000
1,800
2,700
1,500
1,200
1,600
1,500
2JOO
MT of
Tailings 1
(Thousands)
1,000
8,825
1,400
2,200
17,100
24,600
17,900d
—
2,760
1,200
5,600
1,706
-
1,600
7,800
—
2,800
1,300
4,200
5,500
8,000
5,700
11,000
7,600
4,233
2,000
-
146,024
Size of
failings Pile'
(Acres)
200
79
100
200
270
260
210e
—
82
250
220
50
333
35
115
—
106
42
105
150
150
200
85
174
150
160
-
17726
Operating
Status
Active
Active
Closed
Closed
Closed
Active
Active
Closed
Closed
Active
Closed
Closed
Active
Active
Active
Closed
Active
Closed
Closed
Active
Active
Active
Closed
Active
Ac t ive
Active
Active
of January 1, 1980.
of September 1, 1982.
processed at the Vanadium facility for the Manhattan project in 1943.
(^Includes 1,200,000 tons from salvaged Homestake - New Mexico Partners Mill that was located on the present site.
'e'Includes 50 acres from salvaged Homestake - New Mexico Partners Mill that was located on the present site.
-------
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 Yokel1,
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.
2-18
-------
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 (DOE) is the only domestic processor
allowed to enrich yellowcake (1)303) 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. 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 10.1 percent of all
utilities' deliveries were of foreign origin.
The United States 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 1980. In 1981, the United States once
again became a net importer of uranium. Currently, France and Taiwan are
among the countries purchasing U.S. uranium. However-f both Canada and
Australia contain substantial reserves of low cost deposits of uranium,
2-19
-------
Table 2.12. Deliveries of Uranium to DOE Enrichment Plants
by Domestic Customers
Year
1977
1978
1979
1980
1981
Source:
Origin
U.S.
12,918
10,847
14,003
10,101
9,133
(Metric Tons
Foreign
638
660
1,443
1,126
1,027
Survey of United States
of U308)
Total
13,556
11,507
15,446
11,227
10,160
Uranium Marketing
Percent
Actual
4.7
5.7
9.3
10.0
10.1
Activity,
Foreign
Allowable
10
15
20
30
40
U.S. Department of Energy, July 1982 (converted to metric tons).
2-20
-------
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
Source:
Imports
(Metric Tons)
0
0
0
0
0
0
0
0
0
600
1,600
2,500
2,400
1,400
1,600
3,000
Survey of U.S. Uranium Marketing Activity,
Exports
(Metric Tons)
363
635
726
454
1,905
181
91
544
1,360
500
500
1,800
3,000
2,800
2,600
2,000
U.S. Department
of Energy, July 1982 (converted to metric tons).
2-21
-------
and South Africa is increasing its production capacity. U.S. producers
will be faced with competition, both domestically and in the export
market, from two huge Australian uranium projects scheduled to begin
production within two years (CRB80). 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 (DOE81b).
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). 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 future uranium
requirements.
2.2.3 Uranium Reserves
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 reserves, the
United States has 25 percent, Australia - 18 percent, Sweden - 17 percent,
South Africa - 15 percent, and Canada - 9 percent (Ta79). Reserves is a
term given to resources that are known to exist because of information
gathered by drilling. 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 (Se80).
2-22
-------
Table 2.14. Historical Estimates of Uranium Reserves
As Of
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
$15/lb
288
355
472
472
472
380
390
372
336
263
204
102
0
Thousand MT U_00
J o
$30/lb $50/lb
575
544
581
617 762
626 807
626 835
585 849
426 714
186 539
$100/lb
1,018
938
811
Note: Reserves reported at $30, $50, and $100/lb include reserves in
all lower cost categories. This table does not include byproduct
u r an ium.
Source: Statistical Data of the Uranium Industry, U.S. Department of
Energy, January 1, 1982 (converted to metric tons).
2-23
-------
2.2.4 Employment
Overall employment in the uranium industry is shown on Table 2.15,
for the years 1973 through 1979. 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 uranium mining and milling segments
of the industry are shown separately in Table 2.15a for the year 1979.
Total employment totaled 15,991 people for the two segments in 1979, up
from a total of 15,124 in 1978. By 1981, however, more than one-third of
the uranium mining and milling workers had been laid off as employment
totaled only 9,840 workers (DOE82a).
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, while
production costs in the U.S. average about $30 per pound (BW81b). 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 1980. As a group,
these six companies provide a reasonable financial representation of the
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. 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
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 1981 totaled $271 million, a decrease of 47 percent from the 1980
level of $515 million. Planned expenditures for 1982 and 1983, estimated
to be $128 and $100 million, respectively, reflect a continuation of the
decline in capital investment.
2-24
-------
Table 2.15. Employment in the Uranium Industry
1973 1974 1975 1976 1977 1978 1979
Exploration
Mining
Milling
Total
1,557 1,697 2,049 2,793 4,140 4,449 4,066
3,516 3,928 5,386 7,603 11,453 13,338 14,219
1,522 1,668 2,237 2,727 3,175 3,615 3,476
6,595 7,293 9,672 13,123 18,768 21,402 21,761
Source: U.S. Department of Energy, Office of Uranium Resources and
Enrichment, "The Domestic Uranium Industry and Imports of
Uranium," February 23, 1981.
2-25
-------
Table 2.15a. Employment in the Uranium Mining and Milling Industries (1979)
Underground
Mining' a'
Colorado and Utah
New Mexico
Wyoming
Other States
Total
Milling
Colorado and Utah
New Mexico
Wyoming
Other States
Total
Miners
891
1,843
278
52
3,064
NA
NA
NA
NA
Serv. &
Support
471
1,836
310
25
2j_642
NA
NA
NA
NA
Open Pit
Miners
90
338
1,424
459
2,311
NA
NA
NA
NA
Serv. &
Support
6
237
1,012
216
liAZi
NA
NA
NA
NA
Opera-
tions
NA
NA
NA
NA
289
449
288
139
1,165
Mainte-
nance
NA
NA
NA
NA
246
342
238
125
951
Tech-
nical
124
496
381
69
1,070
117
103
117
31
368
Other
273
361
289
61
984
41
81
113
36
271
Super-
visory
213
555
353
92
1,213
103
185
142
51
481
Total
2,068
5,666
4,047
974
12,755
796
1,160
898
382
_3jL236
NA = Not Applicable.
figures include 323 truckers and 430 employees involved in shaft sinking. Not included are
1,464 employees working in recovery of uranium from byproducts and solution mining, and 240
employees working on construction of uranium recovery facilities.
Note: This table was prepared from information obtained from companies and individuals engaged in
mining and milling uranium. The numbers are the average employment for calendar year 1979.
Source: Statistical Data of the Uranium Industry, U.S. Department of Energy, January 1, 1980.
-------
Table 2.16. Financial Information for Selected Companies
in the Uranium Industry
($ in Thousands)
Revenues
Operating
Profit
Assets
Depreciation
Depletion
Capital
Expend.
Year
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
Atlas
15,611
28,152
26,845
-38,253
60,148
4,607
8,027
(1,925)
(2,159)
6,142
NA
NA
56,375
79,428
72,834
NA
NA
3,331
4,058
6,212
NA
NA
14,579
21,870
7,453
Conoco
NA
NA
16,488
16,384
34,586
NA
NA
(20,815)
(21,530)
(30,719)
NA
NA
52,491
61,218
62,867
NA
NA
2,876
3,209
3,957
NA
NA
7,213
6,937
7,999
Home stake
22,441
59,141
44,928
42,388
45,363
10,389
24,622
20,454
14,097
(601)a
14,144
45,023
42,990
47,790
54,798
192
80
0
17
6,980
2,036
2,628
7,961
8,533
12,521
Kerr-McGee
96,800
123,300
115,200
163,400
238,900
32,700
22,300
20,100
(200)
30,000
215,300
236,500
272,000
288,400
304,800
7,500
9,300
13,800
15,600
21,300
NA
NA
NA
NA
NA
Pioneer
NA
NA
13,810
20,267
7,829
NA
NA
1,257
(1,004)
(1,082)
NA
NA
51,119
70,583
84,046
NA
NA
8,679
11,253
8,718
NA
NA
19,467
23,513
17,567
UNC
29,339
80,816
133,193
181,626
167,811
7,103
28,539
42,320
61,339
12,243
87,222
145,376
203,041
279,436
239,888
1,070
1,952
5,414
9,677
11,952
27,856
54,499
49,518
39,156
46,662
NA = Not Available.
'a'Includes an $8,075 loss on settlement of uranium litigation, would
otherwise have been (8,075) - 601 = +$7,474.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
2-27
-------
Table 2.17. Financial Ratios for Selected Companies
in the Uranium Industry
(Percentage)
Operating
Profit/
Revenue
Operating
Profit/
Assets
Depreciation
Depletion/
Revenues
Capital Ex-
penditure/
Revenue
Year
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
Atlas
29.5
28.5
-
-
10.2
NA
NA
-
-
8.4
NA
NA
12.4
10.6
10.3
NA
NA
54.3
57.2
12.4
Conoco
NA
NA
-
-
-
NA
NA
-
_
-
NA
NA
17.4
19.6
11.4
NA
NA
43.7
42.3
23.1
Home stake
46.3
41.6
45.5
33.3
16.5>
1.8
.3
-
.04
15.4
9.1
4.4
17.7
20.1
27.6
Kerr-McGee
33.8
18.1
17.4
-
12.6
15.2
9.4
7.4
_
9.8
7.7
7.5
12.0
9.5
8.9
NA
NA
NA
NA
NA
Pioneer
NA
NA
9.1
-
-
NA
NA
2.5
_
-
NA
NA
62.8
55.5
111.0
NA
NA
141.0
116.0
224.0
UNC
24.2
35.3
31.8
33.8
7.3"
8.1
19.6
20.8
22.0
5.1
3.6
2.4
4.1
5.3
7.1
95.0
67.4
37.2
21.6
27.8
NA = Not Available.
- = Loss Year.
^•a'16.5 percent without litigation.
(b)
13.6 percent without litigation.
Source: Corporate annual reports, Securities and Exchange Commission (SEC)
10-K reports.
2-28
-------
Table 2.18. Capital Investment for Domestic Uranium Production
1975 1976 1977
Mine
Companies Reporting
Expenditures
M ($ Millions)
i
^ Mill
Companies Reporting
Expenditures
($ Millions)
Total Expenditures
($ Millions)
Note: Based upon surveys
Source: Statistical Data
22 29 31
124 200 325
18 24 26
22 55 167
146 255 492
1978
25
271
19
156
427
conducted from January 1
of the Uranium Industry,
1982
1979 1980 1981 (Planned)
26 34 29 20
282 273 212 105
26 27 22 14
203 242 59 23
485 515 271 128
, 1976, to January 1, 1982.
U.S. Department of Energy,
1983
(Planned)
17
90
13
10
100
January 1, 1982.
-------
REFERENCES FOR CHAPTER 2
BWSla
BW81b
Co79
CRB80
CRB81
deV82
DOE 7 9
DOE 80
DOESla
DOESlb
DOE82a
DOE82b
Ha82
Hu82
Business Week, "The U.S. Nuclear Power Industry Cries for Help,"
McGraw-Hill, Inc., New York, August 31, 1981.
Business Week, "UNC Resources: Diversifying Away from Uranium
andTnto Tools," McGraw-Hill, Inc., New York, August 24, 1981.
Combs, George F., The Uranium Market — 1978-1979, Office of
Uranium Resources and Enrichment, U.S. Department of Energy,
October 1979.
Commodity Research Bureau, New York, Commodity Yearbook 1980.
Commodity Research Bureau, New York, Commodity Yearbook 1981.
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.
U.S. Department of Energy, Energy Information Administration,
Annual Report to Congress 1979, Volume III.
U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(80), 1980.
U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(81), 1981.
U.S. Department of Energy, Office of Uranium Resources and
Enrichment, "The Domestic Uranium Industry and Imports of
Uranium," February 23, 1981.
U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(82), 1982.
U.S. Department of Energy, Survey of United States Uranium
Marketing Activity, DOE/NE-0013/1, July 1982.
Hahne, F.J., "Future Uranium Prices," presented at Nuclear
Assurance Corporation Uranium Colloquium V, Grand Junction,
Colorado, October 6-7, 1982.
Hulse, Richard D., "Uranium Supply - The Roller Coaster Effect,"
presented at Nuclear Assurance Corporation Uranium Colloquium V,
Grand Junction, Colorado, October 6-7, 1982.
2-30
-------
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.
PD81 Pay Dirt (Big Sky Edition), "Nuclear Power Growth Prediction
Contributed to Uranium Industry's Problems," Copper Queen
Publishing Co., Bisbee, AZ, July 1981.
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.
SP81 Standard and Poor's Corporation, Standard and Poor's Industry
Surveys, Metals-Nonferrous jasic Analysis, May 21, 1981.
Ta79 Taylor, June and Michael D. Yokel1, Yellowcake, The International
Uranium Cartel, 1979.
2-31
-------
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. Prevent 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
half-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. 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 for external gamma
radiation. Thus, relatively low concentrations in soil can lead to annual
doses approaching natural background radiation levels of about 100 mrem
per year. 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:
I. prevention of 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.
3.2 Control Methods
3.2.1 Prevention of 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. Isolation is
also required to prevent the construction of dwellings directly on
disposed tailings when institutional controls fail sometime in the
3-2
-------
future. Tailings are a high grade sand and can be ideal for use in
construction or as fill, if 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 EIS 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.
Since digging to or below these depths is common, it can be argued
that a significantly greater thickness would be required for isolation.
This does not imply that structures will be built on tailings or utility
piping run through tailings. It is meant to demonstrate that digging to
such depths is frequently practiced. Thus, for an earth cover to provide
reasonable isolation it should have a minimum of 3 meters thickness.
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
with the exception of one case involving incorporating the tailings into
concrete. 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 except for the concrete fixation alternative
since costs are high and not well established, and their effectiveness for
radon control is questionable.
3-3
-------
Earth placed over tailings slows the movement of radon into the
atmosphere by various attenuation processes. When the earth is moist
attenuation increases and less radon passes through. Different soils have
different attenuation properties. These properties can be described as a
half-value-layer (HVL). The HVL is that thickness of cover material
(soil) which reduces radon releases to one-half the value from uncovered
tailings. Figure 3.1 shows nominal curves for the percentage of radon
which would penetrate various thicknesses of different materials with
different HVL's. It is emphasized the HVL's are nominal; HVL's will vary
significantly at actual sites depending on soil composition, compaction,
moisture content, and other factors.
Figure 3.1 is a simplified illustration of radon retention by soils.
A complete discussion of radon attenuation is included in Appendix P of
the NRC's Generic Environmental Impact Statement (NRC80) and is based on
the work of Rogers (Ro81).
From Figure 3.1 it can be seen that 3 meters of sandy soil
(HVL = 1.0 meters) will reduce the radon released from tailings 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 also reduce the radon
release about 90 percent. We conclude from this information that 3 meters
of almost any soil can be expected to reduce radon emissions from tailings
by at least 90 percent.
3.2.3 Prevention of Spread of Tailings
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.
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.
3-4
-------
1001
90
80
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)
~ 70
r^
\/
10-
I
Figure 3.1.
23456
COVER THICKNESS (METERS)
Radon Penetration ot Cover vs. Cover Thickness
3-5
-------
A typical tailings pile may have a radium-226 concentration of
500 pCi/g. This produces a gamma absorbed dose rate in air of
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, EPA1s 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 NIPDWR's. 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 EIS.
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
3-6
-------
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 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, the worst case for corrective action is 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 one meter thick clay liner. A plastic liner 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 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 new mills must incur.
3-7
-------
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 radioac-tive waste (EPA78) 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.
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, passive controls can be expected to
3-i
-------
cost more than active controls which are provided by institutions; at
least the initial costs of passive controls will probably be greater.
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 for 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
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.
3-9
-------
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 of the surface disposal methods are subject to erosion. Some
values for soil erosion rates in the U.S. are given in Table 3.1. These
erosion rates are averages and do not mean that the surface is lowered
uniformly by this amount. Widely varying rates of erosion, and also of
deposition, can be found within any one drainage basin. These rates are
most applicable to the below grade surface disposal option. Erosion rates
for above grade disposal will be greater. It is also noted that the
maximum rate of erosion occurs in areas with about ten inches (25 cm) of
rainfall per year (Fo71).
This annual rainfall is typical of the uranium mining and milling
areas in the western U.S. Thus the tailings of concern in this standards
effort are in areas where maximum rates of erosion occur.
The erosion rates for the Colorado River basin vary between 0.09 and
0.25 meters per 1,000 years. These rates can reasonably be applied to
below-grade surface disposal even though wind erosion is not included.
Erosion rates for above-grade surface disposal will be greater than
below-grade disposal. Wind erosion of these above-grade disposed tailings
is expected to be much greater than below-grade depending on the
effectiveness of vegetation. Loss of vegetation will increase water
erosion. Rock cover will greatly reduce wind erosion. In consideration
of these points, and also that erosion rates vary greatly from site to
site, it is concluded that 3 meters of soil covering above-grade tailings
would provide long term protection for about 1,000 years. The uncertainty
in the erosion rates indicates that this soil cover would maintain
isolation ranging from a period of a few hundred years to a few thousand
years.
3.3.4 Floods
Floods are probably the greatest natural hazard to the tailings
piles. Piles can be protected against floods by constructing barriers
designed to withstand floods, or by moving them to new sites. Some of the
barriers for protecting the piles if they are to be left in place are:
grading the piles so that the sides of the piles have gradual slopes;
providing protective rock on the slopes (and on the top if needed); and
constructing embankments or dikes on the sides of the piles. The exposed
sides of the embankments can be protected by rock. For cases where the
vulnerability to floods is great enough that disposal in place is
considered inadequate, the piles can be moved to less vulnerable sites.
3-10
-------
Table 3.1 Soil Erosion Rates in the United States
Erosion Rate
(cm/1,000 years)
Measurement
Technique
Comments
Reference
6
4
17
5
9
5
25
5
3
River load
River load
River load
River load
River load
Radioactive dating
River load
River load
River load
Average for U.S. Ju64
Columbia River Ju64
Colorado River Ju64
Mississippi River Ha75
Colorado River Ha75
Amount of erosion Ha75
of volcanic extrusion
in southern Utah
Colorado River Yo75
Average for U.S. Da76
Average for Pr74
North American
continent
Note: River load refers to erosion rate estimates based on the sediment
load (dissolved and detrital particles) carried by rivers.
3-11
-------
Flood protection design must be based on very infrequent but
high-magnitude floods^1)- These floods typically depart significantly
from the trend of more frequently observed floods. The interpretation of
the data for extreme floods will influence the design of protective
measures. Where historical records are of short duration compared to the
required longevity of the protection measures, prediction of extreme
floods must rely on techniques of geomorphology (Co78). Once the size of
flood event to be used ha's been determined, flood protection can be
incorporated into the design of remedial measures.
The "design flood" is the flood adopted as the basis for flood
protection for a facility after considering both hydrologic and economic
factors. In most areas, the chracteristics of relatively short-term
floods, such as the 50-year flood, have been well established and
engineers routinely design facilities protected from such events. Where
the failure of flood protection systems could result in loss of lives and
great property damage, however, a design based on the MPF may be
justified. The SPF is often considered an appropriate design basis for
facilities where some risk would be tolerable, and the added cost of
providing greater protection would be significant. Another consideration
is that sometimes the differences between various classes of flood is not
very great. Also, the differences in water velocity can be significant
and adequate protective systems must be considered site-specifically.
Uncertainties in design specifications and performance may affect the
practicality of long-term flood protection systems. The characteristics
of long-term recurrence floods, such as the 1000-year flood, are usually
much less certain than those of floods that have recurred frequently
during historical periods. Furthermore, because of potential damage from
erosion and earthquakes, our confidence in the ability of conventional
d'lt is customary to rank the severity of floods in terms of the
average time over which floods of a given size or greater may be expected
to recur. For example, .there will be an average of 5 floods in 1000 years
that exceed the "200 year flood." The "maximum probable flood" (MPF), on
the other hand, is the largest flood that one would expect to occur in a
given region for that climate era. Geomorphic data are best for
determining the past rate of occurence of very large floods. When such
data are unavailable, the MPF can be estimated from historical records,
but such estimates are frequently shown to be inadequate when new severe
rainstorms occur.
Another measure of flood severity that is sometimes used as a design
criterion is the Standard Project Flood (SPF), which results from the most
severe combination of weather and hydrologic conditions that are
reasonably characteristic of the region involved, excluding extremely rare
combinations.
3-12
-------
flood protection systems such as dikes and stone reinforcements to
withstand a flood declines with time into the future. In view of these
combined uncertainties, conservatively designed systems would be required
to satisfy very long-term flood protection requirements. Whether for
technical or economic reasons, if those requirements could not be
satisfied at the present location of a tailings pile, it would have to be
moved to a new site where long-term floods are a more manageable threat.
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. Also, it does not preclude the choice of the
active (institutional control) option.
In general, the effectiveness of controls over time can be rated from
best to least as follows:
BEST
LEAST
Deep geological disposal
Below-grade surface disposal
Above-grade surface disposal, entire area covered with
thick earth and rock cover
Above-grade surface disposal, entire area covered with
thick earth and slopes covered with rock cover
Above-grade surface disposal covered with thick earth
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.
3-13
-------
REFERENCES FOR CHAPTER 3
Co78 Costa, J. R., "Holocene Stratigraphy in Flood Frequency
Analysis," Water Resources Research, August 1978.
Da76 Davis, S. N., Reitan, P. H., and Pestrong, R., Geology, Air,
Physical Environment, 1976.
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.
Fo71 Foster, R. J. , Physical Geolo gy, 1971.
Ha75 Hamblin, W. K., The Earth's Dynamic s Systerns, 1975.
Ju64 Judson, S. and Ritter, D. F., "Rates of Regional Denudation in
the United States," Journal of Geophysical Research, Volume 69,
1964.
NP75 National Council on Radiation Protection and Measurements,
Natural Bac kg round Rad ia t ion in the Uni t ed States, NCRP Report
No. 45, 1975.
NRC80 Nuclear Regulatory Commission, Final Generic Environmental Impact
Statement on Ur an ium Mil 1 ing, NUREG-0706, 1980.
Pr74 Press, F. and Siever, R., Earth, 1974.
Ro81 Rogers and Associates Engineering Corporation, A Handbook for the
Determination of Radon Attenuation through Cover MaterialsV
prepared for the Nuclear Regulatory Commission, NUREG/CR-2340,
1981.
Yo75 Young, K., Geo logy: TheParao{faraidMan. 1975.
3-14
-------
4. Benefit-Cost Analysis
We examine the costs and benefits of alternative tailings disposal
methods in this chapter. The analysis is performed on a model pile basis,
done separately for existing tailings piles and new tailings piles. Based
on this analysis, we determine the level of control that is optimal for
standards development.
4.1 Cost Analysis
Using the classes of control defined in the previous chapter, we
select tailings disposal methods which will provide alternative levels of
these controls. After selecting the disposal methods, we develop disposal
cost estimates for model piles. This section presents a description of
each disposal method and its estimated cost. The reader should refer to
the EIS for a detailed explanation on the development of the model pile
cost estimates.
Disposal methods were selected for both existing and new tailings
piles. Seven different methods were considered for both existing tailings
(designated ET1 through ET7) and new tailings piles (designated NT1
through NT7). Table 4.1 lists all the disposal methods according to
various characteristics including the grade of the slope, thickness of
earth cover, use of rock cover, below-grade or above-grade, and use of
liner.
For existing tailings, we developed the disposal cost estimates for
three model-sized piles. As of January 1980, there were 23 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 48 ha with an average depth of 2.37m
No. of piles in this group = 10
Average tons per pile = 1.8 million
(Range = 1.0 to 2.8 million tons)
Average area covered = 48 ha
(Range = 13.8 to 98.4 ha)
b. 7 million ton pile on 56 ha with an average depth of 7.72 m
No. of piles in this group = 10
Average tons per pile = 6.85 million
(Range = 4.2 to 11.0 million tons)
Average area covered = 56 ha
(Range = 31.1 to 86.6 ha)
c. 20 million ton pile on 98 ha with an average depth of 12.85 m
No. of piles in this group = 3
Average tons per pile = 19.9 million
(Range = 17.1 to 24.6 million tons)
Average area covered = 98 ha
(Range = 82.6 to 106.2 ha)
4-1
-------
Table 4.1. Characteristics of Tailings Disposal Methods
Disposal
Method
Existing
Tailings
Piles
ET1
ET2
ET3
ET4
ET5
ET6
ET7
5:1
5:1
5:1
8:1
8:1
5:1
Earth Cover
Thickness(m)
Rock
Cover
Put
Below Grade
Liner
Cement
Fixation
,5(a)
1
3
3
5
1
3
slopes
slopes
slopes
slopes
total area
X
New
Tailings
Piles
NT1
NT2
NT3
NT4
NTS
NT6
NT7
No treatment (Tailings Pond Only)
5:1 ,5a
5:1 1 slopes
5:1 3 slopes
3 X
8:1 5 slopes
X
X
X
X
X
X
X
^'Assumes maintenance for 100 years.
4-2
-------
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% U-^OQ. 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.
Each of the disposal methods is described below.
Method ET1
The sides of the square tailings pile are graded to a 5:1 (H:V)
slope. The entire area is then covered with 0.5 meter of earth obtained
nearby. A 6-feet high, 6-gage aluminum chain link fence is placed around
the exclusionary zone, which is assumed to be 0.5 km from all sides of the
pile. The covered pile is landscaped assuming that suitable loam or
topsoil is available onsite. The borrow pit is reclaimed. The site is
maintained for 100 years by irrigation of the vegetative cover and
inspection and repair of the earth cover and fence.
Method ET2
The sides of the tailings piles are graded to 5:1 (H:V) slope. The
tailings are covered with 1 meter of earth obtained nearby and the slopes
are covered with 0.5 meter of rock cover. There is no maintenance and
inspection of the pile. The top of the disposed tailings area (that part
not covered with rock) is landscaped. A fence is installed to form an
exclusion area 0.5 km wide all around the disposed tailings. The borrow
pit is reclaimed.
Method ET3
The sides of the tailings piles are graded to a 5:1 (H:V) slope. The
entire tailings area is covered with 3 meters of earth obtained nearby.
After covering, the slopes are covered with rock and the tops of the piles
are landscaped. No fence is necessary. The borrow pit is reclaimed.
Method ET4
The sides of the tailings piles are graded to a 8:1 (H:V) slope and
the entire area is covered with 3 meters of earth obtained nearby. The
slopes are covered with 0.5-meter rock cover and the tops of the piles are
landscaped. No fence is needed. The borrow pit is reclaimed.
4-3
-------
Method ET5
The edges of the tailings piles are graded to a slope of 8:1 (H:V).
The entire area is then covered with 5 meters of earth obtained nearby.
The slopes are covered with 0.5-meter thick rock cover and the tops of the
piles are landscaped. No fence is necessary. The borrow pit is reclaimed.
Method ET6
The sides of the tailings piles are graded to a 5:1 (H:V) slope. The
entire area is then covered with 1 meter of earth obtained nearby. The
entire pile is then covered with 0.5 meters of rock. A fence is installed
to form an exclusion area 0.5 km wide all around the disposed tailings.
The borrow pit is reclaimed.
Method ET7
This disposal method provides for below-surface level disposal of the
tailings with a 1-meter clay liner below the tailings and a 3-meter earth
cover over the tailings. For the 2 million ton pile, a 366 meter square
pit is excavated to a 12 meter depth adjacent to the pile. The bottom of
the pit is assumed to be above the groundwater table. The pit is lined
with 1 meter of clay which is assumed to be purchased and hauled 3.2 km.
The tailings are moved into the pit with scrapers after which they are
covered with 3 meters of the excavated earth. The disposal area is
landscaped.
The disposal pit for the 7 million ton pile is 614 meters square and
15 meters deep, while the 20 million ton pile is 1,047 meters square and
also 15 meters deep. Both are assumed to be above the groundwater table.
Because of the large sizes, we assumed that the tailings are hauled by
trucks for an average off-road distance of 3.2 km. The disposal method
and landscaping is similar to the 2 million ton case.
Method NT1
This method is the same as the base case in the NRC GEIS analysis
(NRC80). An initial basin would be formed by building low earthen
embankments on the four sides of a square. The mill tailings would be
slurried into the basin and as the basin filled, the coarse fraction of
the tailings (sands) would be used to raise and broaden the embankments.
When the mill ceases operations, no specific control measures for disposal
would be used. The cost for this option consists only of the preparation
of the initial basin.
Method NT2
This method is similar to ET1 since both use a thin earth cover on
the tailings and rely on institutional controls for 100 years to prevent
misuse. A pit is excavated close to the mill and measures 930 meters
square and 2 meters deep. Embankments are constructed along each side,
947 meters long, 10 meters high, and 13 meters wide at the top. The pit
4-4
-------
is Lined with 1 meter of clay obtained locally. Tailings are pumped
directly into the pit during operation of the mill. It is assumed water
from the pond will be recycled to the mill, thereby negating the need for
an evaporation pond.
At the end of mill life, the embankments are excavated and placed on
top of the tailings providing a 0.5 meter earthen cover. The slopes of
the covered tailings are graded to 5:1 (H:V). The entire area is
landscaped. A fence is placed around the disposal area and provides a 0.5
km exclusion zone. The site is maintained for 100 years by irrigation of
the vegetative cover and inspection and repair of the earth cover and
fence-.
Method NT3
This method is similar to ET2 since both use a 1-meter earth cover
and a 0.5-meter rock cover on the slopes. A pit is prepared and used
identical to that described for method NT2.
At the end of mill life, the embankments are excavated and placed on
top of the tailings providing a 1-meter earthen cover. The slopes of the
disposed tailings are graded to 5:1 (H:V) and then covered with 0.5 meters
of rock. The top of the disposed tailings area is landscaped. A fence is
contracted at a distance of 0.5 km from the edge of the disposed tailings
all around the site.
Method NT4
This method is similar to ET3 since both use a 3-meter earth cover
and a 0.5—meter rock cover on the slopes. A pit is excavated, prepared,
and used identical to that described for method NT2.
At the end of mill life, the embankments are excavated and placed on
top of the tailings. Additional earth cover is obtained from a nearby
borrow pit so that the final earth cover over the tailings is 3 meters
deep. The slopes of the covered tailings are graded to 5:1 (H:V) and are
covered with a 0.5-meter rock cover. The top of the earth-covered
tailings is landscaped. The borrow pit is reclaimed.
Method NT5
This method is similar to the staged or phased disposal method
described in the NRC's GEIS (NRC80). This method uses 6 pits of
300 meters square and 13 meters deep. Two pits are constructed initially
and lined with 1 meter of clay. Tailings are 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, and the excavated
earth from this pit is used to cover the first pit to a depth of 3 meters,
up to the original ground contour. This process continues sequentially
until the end of mill life. An evaporation pond is needed in this method.
4-5
-------
At the end of mill life, there will likely be 4 completed pits, which
are covered with 3 meters of earth to the original ground contour, and 2
uncovered pits. When sufficiently dry these last 2 pits are covered with
3 meters of excavated earth to the original ground contour. The disposed
tailings area is landscaped. The areas covered by the evaporation pond
and excess excavated earth are restored.
Method NT6
This method is similar to ET5 since both use a 5-meter earth cover
and a 0.5-meter rock cover on the slopes. A pit is excavated, prepared,
and used in the same manner as that described for method NT2.
At the end of mill life, the embankments are excavated and placed on
top of the tailings. Additional earth cover is obtained from a nearby
borrow pit so that the final earth cover over the tailings is 5 meters
deep. The slopes of the covered tailings are graded to 8:1 (H:V) and are
covered with a 0.5-meter rock cover. The top of the earth-covered
tailings is landscaped. The borrow pit is reclaimed.
Method NT7
This method is the same as alternative 7 in the NRC GEIS (NRC80).
The tailings are pumped to the edge of a depleted mine pit where the sands
(coarse fraction) and slimes (fines fraction) are separated. The sands
are washed, dried, and deposited in the mine pit. The slimes are
partially dried, mixed with cement, and deposited in the mine pit where
the cement/fines slurry would harden.
The total cost and unit cost for each disposal method and model pile
are displayed in Table 4.2.
4.2 Benefits Analysis
The benefits of each disposal method are the degree to which each of
the goals of the standards is achieved. All of the benefits are
health-related. 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 EIS which accompanies this RIA. Table 4.3 summarizes these benefit
measures.
4-6
-------
Table 4.2. Disposal Cost Summary for Model Pi
Disposal Method
Total Cost
(Millions of 1981 $)
Unit Cost
($/MT of Tailings)
Existing Tailings
ET1
ET2
ET3
ET4
ET5
ET6
ET7
: Model
2
3.9
3.8
6.9
7.6
11.9
12.8
12.3
Pile Size (MT)
7 20
5.7
7.0
11.4
13.9
19.9
i7.4
43.7
11.1
14.4
22.3
29.2
40.6
32.5
126.9
Model Pile Size (MT;
2 7 20
1.96
1.90
3.47
3.81
5.97
6.40
6.16
0.81
0.99
1.62
1.99
2.84
2.48
6.24
0.56
0.72
1.12
1.46
2.03
1.63
6.35
(10.4) (38.4) (111.7)
(5.23) (5.49) (5.58)
New Tailings:
NT1
NT 2
NT3
NT4
NT5
NT 6
NT 7
Model Pile Size (MT)
8.4
1.2
25.8 (13.8)
27.4 (15.4)
33.5 (21.5)
35.8 (27.0)
43.9 (31.9)
91.2
Model Pile Size (MT)
8.4
0.14
3.07 (1.64)
3.26 (1.83)
3.99 (2.56)
4.27 (3.21)
5.23 (3.80)
10.85
'a'Cost estimates in parentheses exclude the cost of a liner which
provides groundwater protection during the operational phase of a
tailings pond.
4-7
-------
Table 4.3. Benefits of Controlling Uranium Mill Tailings
Disposal
Method
Chance
of Misuse
Stabilization
Misuse
Inhibited
(years)
Erosion
Avoided
(years)
Radon
Deaths Avoided
Per Century,
Per Pile^3'
Control
Maximum Risk*-'3''
of Lung Cancer
(% Reduction)
Water Protection
Groundwater
Protected
(y)
NEW TAILINGS
I
oo
NT1
NT2
NTS
NT4
NT5
NT6
NT7
ET1
ET2
ET3
ET4
ET5
ET6
ET7
Most likely
More likely
Likely
Unlikely
Unlikely
Very unlikely
Very unlikely
More likely
Likely
Unlikely
Unlikely
Very unlikely
Unlikely
Unlikely
0
100
100's
1,000
> 1,000
> 1,000
> 1,000
100
100':
1,000
1,000
> 1,000
> 1,000
> 1,000
0
hundred
hundreds
thousands
many thousands
many thousands
many thousands
0
6-19
10-31
12-37
12-37
13-39
12-37
4 in 102 (0%)
2 in 102 (50%)
1 in 102 (80%)
2 in 103 (95%)
2 in 103 (95%)
1 in 104 (99%)
2 in 103 (95%)
EXISTING TAILINGS
0
100
100's
1,000
1,000
1,000
1,000
hundreds
thousands
thousands
thousands
many thousands
many thou s and s
many thou s and s
6-19
10-31
12-37
12-37
13-39
10-31
12-37
2 in 102 (50%)
1 in 102 (80%)
2 in 103 (95%)
2 in 103 (95%)
1 in 104 (99%)
1 in 102 (80%)
2 in 103 (95%)
100
100's
1,000
1,000
> 1,000
0
> 1,000
'a'New Tailings. The total lung cancer deaths attributable to radon from the model tailings pile are estimated
as 13 per century from a remote site and 39 from a rural site, if no disposal actions are taken.
Existing Tailings.
The total lung cancer deaths attributable to radon from the model existing piles are also
13 per century from a remote site and 39 from a rural site, if no disposal actions are
taken. The total lung cancer deaths from uncontrolled tailings existing at the 23 sites
as of January 1980 are estimated to be 450 per century.
Total lung cancer deaths attributable to radon from uncontrolled existing tailings plus future tailings
estimated to be generated through the year 2000 under the baseline demand projection are estimated to be about
1400 per century.
(k)Lifetime risk of fatal cancer to an individual assumed to be living 600 meters from center of a tailings
pile.
-------
The benefits of prevention of misuse are expressed in terms of the
likelihood that misuse might occur and the number of years over which the
control is expected to inhibit misuse. The likelihood of misuse during
the period of effectiveness of these methods ranges from most likely for
the no control case (NT1) to very unlikely for the tailings solidification
method (NT7) and the 5-meter earth cover (NT6 and ET5). The number of
years of prevention of misuse ranges from zero for the no control case
(method NT1) to greater than 1000 years for the methods having tailings
solidification (NT7), below-grade disposal with a 3-meter earth cover (NT5
and ET7), a 5-meter earth cover (NT6 and ET5), or rock cover over the
entire tailings pile (ET6).
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 to many thousands of years for the 3- and
5-meter earth 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 the model piles at active
mill sites is estimated for each model pile to be 13 to 39 deaths per
century if no controls are used. This range in estimated deaths
corresponds to two different population distributions around the pile,
referred to as "remote" and "rural" sites. Methods having 3-meter earth
covers would reduce this rate to about I to 2 deaths per century for each
model pile. The benefit from a 5-meter earth cover would be the virtual
elimination of the radon risk. The lifetime risk to the individual living
600 meters from the center of the pile is estimated to be 4 in 100 for an
uncontrolled tailings pile. This risk is reduced to 2 in 1000 for a
3-meter earth cover and 1 in 10,000 for a 5-meter cover.
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 (NT2 and ET1)
to greater than 1000 years for the tailings solidification method (NT7),
below-grade disposal with a 3-meter cover (NT5 and ET7), and the 5-meter
cover methods (NT6 and ET5). 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.
4-9
-------
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 4.4 shows for each
disposal method deaths avoided per century and the tailings disposal cost,
both estimated on a model pile basis. A range in avoided deaths is
presented which reflects the estimates for a remote site (low estimate)
and a rural site (high estimate). 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 risks that people would be
willing to pay from 0.3 to 2.5 million dollars to save a life (EPA82).
Upon examining the average cost estimates in Table 4.4, we see that all
disposal methods, except ET7 and NT7 for remote sites, fall within the
upper limit of 2.5 million. A more appropria'te 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 controls as
restrictive as method ET3 for existing tailings may be justified since
they fall below the $2.5 million upper limit. For new tailings, the
incremental cost for method NT4 at rural sites is within the range of the
value of life studies, while at remote sites the cost is higher than the
upper limit. Beyond ET3 and NT4, the incremental cost increases
significantly.
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
accepted 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
4-10
-------
Table 4.4. Radon Control Benefits Versus Disposal Cost
Disposal
Method
Deaths Avoided
Per Century
Average
Model Pile Cost Per
Disposal Costs'3' Death Avoided
(105 1981 $) (106 1981 i)
Existing Tailings
(7 million MT pile):
No disposal
ET1
ET2
ET6
ET3
ET4
ET7
ET5
0
6-19
10-31
10-31
12-37
12-37
12-37
13-39
0
5.7
7.0
17.4
11.4
13.9
43.7
19.9
.3-1.0
.2-. 7
.6-1.7
.3-1.0
.4-1.2
1.2-3.6
.5-1.5
Incremental
Cost Per
Death Avoided
(106 1981 $)
.3-1.0
.1-.3
(b)
.7-2.2
(b)
(b)
4.3-8.5
New Tailings:
NT1 0
NT2 6-19
NT3 10-31
NT4 12-37
NTS 12-37
NT7 12-37
NT6 13-39
1.2
13.8
15.4
21.5
27.0
91.2
31.9
.7-2.3
.5-1.5
.6-1.8
.7-2.3
2.5-7.6
-2.5
.7-2.3
.1-.4
1.0-3.1
(b)
(b)
5.2-10.4
^'Excludes cost of liner for groundwater protection during operational
phase of mill.
'"'No measurable incremental radon health benefit from previous method,
but
other incremental benefits, such as prevention of misuse, are realized.
4-11
-------
application of this estimated range of life valuation to regulations
concerning human health effects may be questionable. Another limitation
is the high degree of uncertainty in the radon death estimates. The EIS
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. The incorporation of all of the
benefits into an analytical benefit-cost framework is the subject of the
rest of this chapter.
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.
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 4.1), 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.
4-12
-------
Table 4.5 presents the effectiveness ratings for each disposal method
and class of control.
Prevention of Misuse
The ratings for prevention of misuse are arbitrary. The basis for
the relative rankings of the disposal methods in providing long- term
isolation was discussed in Chapter 3. We feel that a minimum of a 3-meter
earth cover or a substantial rock cover is necessary to isolate the
tailings for 1000 years. Therefore, we rated the methods with a 1-meter
earth cover and rocks on the slopes only as providing only 20 percent
effectiveness. The one-half meter earth cover with 100-year maintenance
was given a 1 since, after the maintenance stops, the thin earth cover
will not be effective in preventing misuse over the next 900 years.
The highest rated methods were below-grade disposal with a three-
meter earth cover and cement fixation, both assigned a rating of 9. The
5-meter earth cover with rocks on the slopes was rated just slightly lower
with an 8. Next, the methods using a 3-meter earth cover with rocks on
the slope were assigned either a 7 or a 6 depending on whether the slope
was 8:1 or 5:1. We also feel that 1 meter of earth with rock cover over
the entire area will provide a reasonable degree of isolation so that this
method was also assigned a 6.
Radon Control
The effectiveness ratings for radon control are based primarily on
the attenuation characteristics shown for different soil types in
Figure 3.1. Based on these data and allowing for some erosion and
potential .-disruption to parts of the cover material over the 1000-year
time period, we assigned an 8 to the 5-meter earth cover which is
accompanied by rock cover on the slopes. We also assigned an 8 to the
case of a 3-meter earth cover and below-grade disposal since we feel that
disposal below grade will maintain the integrity of the earth cover for a
longer time period than rock cover on the slopes. Therefore, the 2-meter
difference in cover thickness is offset by the better longevity capability
of below-grade disposal. For the same reason, the 3-meter earth cover
with rock cover on the slopes was assigned a slightly lower rating, 7,
than the 3-meter, below-grade disposal method. Disposal with a 1-meter
earth cover with rock cover over the entire pile was assigned a 4 since
this rock cover should keep most of the earth in place for the duration of
the time period. The 1-meter earth cover with rock cover on the slopes
was assigned a 3. The case of one-half meter of earth accompanied by
100-year maintenance was given a rating of 1 since, after the maintenance
stops, we assumed that the earth cover (with no rock cover) would not ~
for an additional 900 years due to erosion and other potential
disruptions. We assigned a 9 to the new tailings disposal method which
includes cement fixation of the tailings.
4-13
-------
Table 4.5. Effectiveness Index for Disposal Methods
by Class of Control
Disposal
Method
ET1
ET2
ET3
ET4
ET5
ET6
ET7
NT1
NT 2
NTS
NT4
NT5
NT 6
NT7
Prevent
Misuse Radon
1
2
6
7
8
6
9
0
1
2
6
9
8
9
Control
1
3
7
7
8
4
8
0
1
3
7
8
8
9
Prevent
Spread of
Tailings
1
6
9
9
10
10
io
0
1
6
9
10
10
10
Groundwater
Protection
1
2
7
7
9
1
7
0
1
2
7
7
9
9
Weighted
Average'3^
1.0
2.7
6.7
7.3
8.5
5.5
8.7
0
1.0
2.7
6.7
8.7
8.5
9.2
weights for this average are as follows:
I. Prevention of misuse - 60 percent
II. Radon control - 5 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Groundwater protection - 20 percent
4-14
-------
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. Below-grade disposal with a 3-meter earth cover, five meters of earth
with rock cover on the slopes, cement fixation of tailings, and a 1-meter
earth cover with rocks over the entire area were assigned a 10. The
methods with a 3-meter earth cover and rocks on the slopes were rated 9.
The case of 1 meter of earth, rock cover on the slopes received a 6, while
the 100-year maintenance method was rated a 1.
Groundwater 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. We estimate that the potential groundwater 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
groundwater contamination.
Since we are only concerned in this RIA with groundwater protection
after disposal, the effectiveness ratings are based on the thickness of
the earth cover. The 5-meter earth cover and the tailings solidification
methods received a rating of 9, while each of the methods using a 3-meter
cover were assigned a 7- 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.
The 1-meter cover with rocks on the slopes was assigned a 2, while the
1-meter earth cover with rocks over the entire tailings pile received a 1
since the rock cover would prevent any moisture from evaporating and would
thus be counter-productive. The active maintenance methods were also
rated a 1.
4-15
-------
Benefit Weighting Factory
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.
For determining the benefit weighting factors, we have relied on the
judgment of the EPA technical staff regarding the relative importance of
each class of control. Members of the staff who are knowledgeable about
the health risks from uranium mill tailings were polled for their opinions
on this subject. They were asked independently to assign numerical
weights (totalling 100 percent) to each of the four control classes which
reflect their views on the relative importance of each goal. The average
of the five percentage distributions was calculated and is shown below:
I. Prevention of misuse - 60 percent
II. Radon control - 5 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Groundwater protection - 20 percent
In the public comment period, we hope to incorporate a broader base
of opinion from other government agencies, industry and the general
public, as to the prioritization of the goals of the standards. If
necessary, these weighting factors will be revised to reflect such
opinions. These weights support the Agency's view that the primary
objective of the standards is to isolate the tailings to prevent their
misuse. Two alternative weighting schemes which are very different than
the one displayed above were also devised and are evaluated in the
sensitivity analysis presented in Section 4.3.
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
costs. In the development of environmental regulations, benefit- cost
analysis is often rejected because this monetization of benefits is not
4-16
-------
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 4.6 for existing tailings piles and in Table 4.7 for
new tailings piles. 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 groundwater 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 4.1 through 4.4.
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
4.1 through 4.3.
In Tables 4.6 and 4.7, 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 decreases from ET2 to ET3, increases by 50 percent from ET3 to ET4,
and then nearly doubles from ET4 to ET7- Disposal methods ET1, ET6, and
ET5 are eliminated from consideration since they are dominated by other
methods. Therefore, controls as far as ET4 appear reasonable, while
beyond this point it is uncertain. For the 7 million MT pite, the
4-17
-------
Table 4.6. Cost-Effectiveness of Disposal Methods, Existing Tailings
Disposal
Method
2 million MT Pile
No disposal
ET1
ET2
ET6
ET3
ET4
ET5
ET7
Effectiveness
Index
0
1.0
2.7
5.5
6.7
7.3
8.5
8.7
Total Cost
(10 1981 $)
0
3.9
3.8
12.8
6.9
7.6
11.9
10.4
Average
Cost
Incremental
Cost
Eliminated from consideration
1.4 1.4
Eliminated from consideration
1.0 .8
1.0 1.2
Eliminated from consideration
1.2 2.0
7 million MT Pile
No disposal
ET1
ET2
ET6
ET3
ET4
ET5
ET7
0
1.0
2.7
5.5
6.7
7.3
8.5
8.7
0
5.7
7.0
17.4
11.4
13.9
19.9
38.4
5.7 5.7
2.6 .7
Eliminated from consideration
1.7 1.1
1.9 4.2
2.3 5.0
4.4 92.5
20 million MT Pile
No disposal
ET1
ET2
ET6
ET3
ET4
ET5
ET7
0
1.0
2.7
5.5
6.7
7.3
8.5
8.7
0
11.1
14.4
32.5
22.3
29.2
40.6
111.7
11.1 11.1
5.3 1.9
Eliminated from consideration
3.3 2.0
4.0 11.5
4.8 9.5
12.8 355.5
4-18
-------
Table 4.7. Cost-Effectiveness of Disposal Methods, New Tailings
Disposal Effectiveness Total Cost Average Incremental
Method Index (10 1981 $) Cost Cost
NT1 0 1.2
NT2 1.0 13.8 13.8 12.6
NT3 2.7 15.4 5.7 .9
NT4 6.7 21.5 3.2 1.5
NT6 8.5 31.9 Eliminated from consideration
NT5 8.7 27.0 3.1 2.8
NT7 9.2 91.2 9.9 128.4
4-19
-------
CO
CO
a)
(3
0)
O
-------
ET5
cn
01
-------
ET7
CO
(0
W
ET5
ETA
ET1
20
40
60
80
100
120
Disposal Cost (millions of 1981 dollars)
Figure 4.3. Cost-Effectiveness of Tailings Disposal Methods -
Existing Tailings, 20 Million MT Pile
4-22
-------
X
0)
CD
CO
CU
B
CU
O
01
NT1
NTS
NT7
NT2
20
40
60
80
100
Disposal Cost (millions of 1981 dollars)
Figure 4.4. Cost-Ettectiveness ot Tailings Disposal Methods
New Tailings, 8.4 Million MT Pile
4-23
-------
incremental cost increases by about a factor of 4 when one goes to ET4
from ET3. For the 20 million MT pile, the large jump in incremental
cost — about a factor of 6 — also takes place when one goes beyond ET3
to ET4. Consequently, on a cost-effectiveness basis, disposal methods ET3
and ET4 should be considered for development of standards for existing
tailings piles. Both disposal methods assume a 3-meter earth cover and
rock cover on the slopes, with the only difference being that ET4 assumes
a more gradual slope than ET3 (8:1 versus 5:1).
For the model new tailings pile, the incremental cost decreases from
NT2 to NT3, increases by about two-thirds from NT3 to NT4, then nearly
doubles from NT4 to NT5. Beyond NT5, the incremental cost increases by a
factor of almost 50. Disposal method NT6 is eliminated from consideration
since it is dominated by other methods. These costs indicate that
controls as far as NT4 appear reasonable, while beyond NT5, it is clearly
too costly. It is uncertain whether NT4 or NT5 is the optimal point.
Both of these methods assume a 3-meter earth cover, with NT4 requiring
above-grade disposal, while NT5 calls for below-grade disposal.
The changes in incremental cost for each model tailings pile can be
seen more clearly in Figure 4.5 where the incremental cost for each
disposal method is plotted. For existing tailings piles, the incremental
cost decreases significantly for ET2 and stays about the same for ET3.
For the 2 million ton pile, the incremental cost increases only slightly
beyond ET3, while for the 7 and 20 million ton piles, the incremental cost
increases significantly. For the new tailings pile, the graph shows the
decrease in incremental cost to NTS, slight increases to NT4 and NT5, and
the very large jump in cost for NT6.
Based on this analysis, the disposal standards for both existing and
new tailings piles should require a level of control which reflects a
3-meter earth cover. 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.
4-24
-------
to
M
td
.-i
rH
o
-O
to
C
o
W
o
o
1-1
(0
4-1
C
(U
g
14
12
10
Key:
2xl06 MT existing tailings pile
7x106 MT existing tailings pile
20x106 MT existing tailings pile I
•**
8.4X106 MT new tailings pile
NTS
EX3 ET4 ET5ET7 NT7
10
Effectiveness Index
Figure 4.5. Incremental Cost of Alternative Disposal Methods
4-25
-------
4.3.1 Sensitivity Analysis
4.3.1.1 Alternative Weighting Factors
As discussed in Section 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 4.8 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 (20 percentage points)
in relative importance from prevention of misuse to radon control. An
additional 5 percentage points were also shifted from groundwater
protection to radon control. Scheme C, on the other hand, represents a
significant shift (relative to the original weighting factors) to
groundwater protection (20 percentage points) from prevention of misuse.
The effectiveness index resulting from these different sets of
weights is also shown in Table 4.8. These -numbers indicate that the
effectiveness index for the disposal methods considered in this analysis
is insensitive to the selection of the weighting factors. For all the
methods, except ET6, the effectiveness index either remains exactly the
same for each weighting factor scheme or changes by only a few tenths of a
point. The reason for this insensitivity is that the individual
effectiveness ratings for each disposal method (except ET6) is about the
same for each class of control. This should not be surprising since the
same control technique - the earthen cover - is responsible for providing
each class of control. Therefore, the relative effectiveness ratings are
all based on the thickness of the cover. The index for ET6 changes by a
full point when using Scheme C as compared to Scheme A. The ratings for
ET6 are a 10 for surface spread, 6 for misuse, 4 for radon, and a 1 for
groundwater. The rock cover placed over the entire pile for ET6 is
effective in preventing surface spread and misuse, contributes little to
radon control except keeps the 1-meter earth cover in place for a long
time, and is counter-productive for groundwater protection since it does
not allow the moisture in the tailings pile to evaporate. Consequently; a
shift in the weighting factor emphasis from prevention of misuse to
groundwater protection causes a noticeable change in the effectiveness
index for ET6.
Since this analysis shows a lack of sensitivity, we conclude that the
optimal level of control determined by the cost-effectiveness analysis is
not affected by different weighting factors.
4-26
-------
Table 4.8. Sensitivity Analysis of Weighting Factors
for Effectiveness Index
Classes of Control Alternative Weighting Factor Schemes (%)
Misuse
Radon
Surface Spread
Groundwater
Disposal Methods
ET1
ET2
ET3
ET4
ET5
ET6
ET7
NT1
NT2
NT3
NT4
NT5
NT6
NT7
A
60
5
15
20
A
1.0
2.7
6.7
7.3
8.5
5.5
8.7
0
1.0
2.7
6.7
8.7
8.5
9.2
B
40
30
15
15
Effectiveness
B
1.0
2.9
6.9
7.3
8.5
5.3
8.6
0
1.0
2.9
6.9
8.6
8.5
9.2
_C
40
5
15
40
Index
C
1.0
2.7
6.9
7.3
8.7
4.5
8.3
0
1.0
2.7
6.9
8.3
8.7
9.2
4-27
-------
4.3.1.2 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 4.9, we have re-assigned 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 4.5), 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 ET1 and NT2, which call for
only one-half meter of earth cover, but provide 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 4.9). We then perform the cost-effectiveness' analysis of disposal
methods. Tables 4.10 and 4.11 show the results of this analysis for the
model existing and new tailings piles. For each of the model existing
tailings piles, the results indicate that controls beyond the active
maintenance disposal method (ET1) result in a doubling of the incremental
cost in order to reach the next disposal method (ET3). Beyond ET3, the
incremental cost increases by a factor of 4 (for the 7 million ton pile)
or 5 (for the 2 and 20 million ton piles). 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 existing tailings. However, the passive controls of a
3-meter earth cover (ET3) should also be considered since the incremental
cost does not increase significantly. For the new tailings pile, controls
beyond the active maintenance method (NT2) can be implemented with only a
50 percent increase in incremental cost. Beyond NT4, however, the
incremental cost goes up by a factor of 3. Disposal with a 3-meter earth
cover for new tailings piles is supported by this analysis for the
100-year protection case, the same result as in the 1000-year protection
case.
4-28
-------
Table 4.9 Effectiveness Index for Disposal Methods by Class of Control,
100-Year Protection Case
Disposal
Method
ET1
ET2
ET3
ET4
ET5
ET6
ET7
NT1
NT2
NTS
NT4
NT5
NT6
NT7
Prevent
Misuse
6
5
8
8
9
6
9
0
6
5
8
9
9
9
Radon Control
6
4
8
8
9
4
8
0
6
4
8
8
9
9
Prevent
Spread of
Tailings
10
8
10
10
10
10
10
0
10
8
10
10
10
10
Ground water
Protection
3
7
9
9
10
1
9
0
3
7
9
9
10
9
Weighted
Average^3'
6.0
5.8
8.5
8.5
9.4
5.5
9.1
0
6.0
5.8
8.5
9.1
9.4
9.2
'a'The weights for this average are as follows:
I. Prevention of misuse - 60 percent
II. Radon control - 5 percent
III. Prevention of surface spread of tailings - 15 percent
IV. Groundwater protection - 20 percent
4-29
-------
Table 4.10. Cost-Effectiveness of Disposal Methods,
Existing Tailings - 100-Year Protection Case
Disposal
Method
2 million MT Pile
No disposal
ET6
ET2
ET1
ET3
ET4
ET7
ET5
Effectiveness
Index
0
5.5
5.8
6.0
8.5
8.5
9.1
9.4
Total Cost
(10 1981 $)
0
12.8
3.8
3.9
6.9
7.6
10.4
11.9
Average
Cost
Incremental
Cost
Eliminated from consideration
.7 .7
.7 .5
.8 1.2
Eliminated from consideration
1.1 5.8
1.3 5.0
7 million MT Pile
No disposal
ET6
ET2
ET1
ET3
ET4
ET7
ET5
0
5.5
5.8
6.0
8.5
8.5
9.1
9.4
0
17.4
7.0
5.7
11.4
13.9
38.4
19.9
Eliminated from consideration
Eliminated from consideration
1.0 1.0
1.3 2.3
Eliminated from consideration
Eliminated from consideration
2.1 9.4
20 million MT Pile
No disposal
ET6
ET2
ET1
ET3
ET4
ET7
ET5
0
5.5
5.8
6.0
8.
8.
9.1
9.4
0
32.5
14.4
11.
22.
29.2
111.7
40.6
.1
3
Eliminated from consideration
Eliminated from consideration
1.9 1.9
2.6 4.5
Eliminated from consideration
Eliminated from consideration
4.3 20.3
4-30
-------
Table 4.11. Cost-Effectiveness of Disposal Methods,
New Tailings - 100-Year Protection Case
Disposal Effectiveness Total Cost Average Incremental
Method Index (10 1981 $) Cost Cost
NT1 0 1.2
NTS 5.8 15.4 Eliminated from consideration -
NT2 6.0 13.8 2.3 2.1
NT4 8.5 21.5 2.5 3.1
NTS 9.1 27.0 3.0 9.2
NT7 9.2 91.2 Eliminated from consideration
NT6 9.4 31.9 3.4 16.3
4-31
-------
REFERENCES FOR CHAPTER 4
EPA82 U.S. Environmental Protection Agency, "Regulatory Impact Analysis
Guidance for Benefits," Appendix A, July 29, 1982 (unpublished
draft).
NRC80 U.S. Nuclear Regulatory Commission, Final Generic Environmental
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
4-32
-------
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 22 economic impact cases for the industry cost
analysis. These cases are defined in Table 5.1. We recognize that many
other combinations are possible, but we feel that the 22 cases designated
5-1
-------
Table 5.1. Tailings Disposal Methods,
By Economic Impact Case and Industry Category
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hi
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
Existing Mills/
Existing Tails
—
ET1
ET1
ET2
ET2
ET6
ET3
ET3
ET4
ET5
—
ET1
ET2
ET6
ET3
ET3
ET4
ET5
Existing Mills/
Future Tails
—
—
ET1
ET1
ET2
ET2
ET6
ET3
ET3
ET4
ET5
NT5
NT 5
NT4
NT 5
NT4
NT 5
NT 5
NT 6
New
Mills
NT1
NT 3
NT 5
NT 7
NT 2
NT 5
NT3
NT4
NT 5
NT4
NT 5
NT 5
NT 6
NT 5
NT 5
NT4
NTS
NT4
NTS
NTS
NT 6
ET7 NT5 NTS
5-2
-------
for study are viable from a regulatory perspective, provide sufficient
degrees of variation, and keep the scope of the analysis manageable in
terms of the number of cases to be considered.
The 22 impact cases fall into two general groups according to the
treatment of future tailings at existing mills. In one set of cases
(A through H), 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 (I through N), 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. In most instances, the controls for future
tailings at new mills are more severe than those for existing tailings
piles since we recognize the economic and engineering implications of
making extensive remedial actions to the existing piles.
The cost for a protective liner is included in the disposal cost
estimates for new mills for every impact case (except Case A) 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.
The following paragraphs present a brief description of each impact
case.
Case A is the no control case for each industry category. Existing
tailings are assumed to remain unaltered, while future tailings at both
existing and new mills are assumed to be treated in the same way that
existing tailings have been treated in the past. Under this option, there
are no disposal costs for existing tailings and future tailings at
existing mills. For future tailings at new mills, the cost of preparation
of the initial tailings basin is included in the cost of disposal.
Case B calls for no control for both existing tailings and future
tailings at existing mills, but does require disposal of future tailings
at new mills. At new mills, three degrees of control are considered:
disposal above-grade with a 1-meter earth cover; below-grade disposal
with 3 meters of earth cover; and solidification of the tailings in cement.
Case C provides no long-term controls but does require a .5-meter
earth cover and active maintenance of these tailings piles for 100 years
for each industry category.
Case D is the same as Case C for existing tailings ani future
tailings at existing mills. Below-grade disposal with a 3-meter earth
cover is assumed for new mills.
5-3
-------
Case E assumes a 1-meter earth cover with rocks on the slopes for
each industry category.
Case F is the same as Case E for existing tailings and future
tailings at existing mills. Above-grade disposal with a 3-meter earth
cover is assumed for new mills.
Case G calls for a 1-meter earth cover, plus rock cover over the
entire tailings pile for existing tailings and future tailings at existing
mills. Below-grade disposal with a 3-meter earth cover is assumed for new
mills.
Case H includes four different combinations of 3- and 5-meter earth
covers for each of the tailings categories. Variations in slope and
above-grade versus below-grade disposal are considered.
Case I calls for no control of existing tailings, but assumes
below-grade disposal with a 3-meter earth cover for future tailings at
both existing and new mills.
Case J is the same as Option I except that it requires a 0.5-meter
earth cover plus active maintenance for 100 years for existing tailings.
Case K assumes a 1-meter earth cover plus rock cover on the slopes at
existing tailings piles while it requires 3 meters of earth with rock
cover on the slopes for future tailings at both existing and new mills.
Case L assumes a 1-meter earth cover plus rock cover over the entire
tailings pile for existing tailings, and below-grade disposal with a
3-meter earth cover for future tailings at both existing and new mills.
Case M is the same as Case H in that it considers four different
combinations of 3- and 5-meter earth covers for the different tailings
categories. However, new tailings disposal methods are assumed for future
tailings at existing mills rather than existing tailings disposal methods.
Case N assumes that all tailings are placed below-grade with a
3-meter earth cover. This requires the moving of all existing tailings
piles plus the placement of a liner at the new sites.
With this analytical framework, we can estimate the incremental
impact of requiring different levels of control on the different industry
categories.
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.
5-4
-------
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
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 assumed that the industry demand forecast is unaffected by the EPA
standards. Therefore, this industry forecast is the same for all economic
impact cases. However, we have further assumed that the standards may
have an impact on the relative shares of future industry production
supplied by existing and new mills. The projection of annual mill
tailings generation, segmented by existing and new mills, is a function of
the amount of existing capacity projected to operate in the future. To
determine projected capacity of existing mills, we have performed a plant
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
plant 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 plant closure analysis.
After the estimates of industry capacity are derived, projections of
industry production at existing mills can then be made. Production at new
mills is assumed to equal the remaining portion of the aggregate industry
demand forecast not produced at existing mills after consideration of
changes in inventories, retired industry capacity, plant utilization
rates, and plant closings due to tailings disposal costs. Appendix B
presents the annual projections of industry production for each impact
case, segmented by existing and new mills.
For future tailings at new mills, the unit cost of disposal
($/MT of tailings) from the model pile cost analysis is applied to the
annual projections of industry production at new mills to derive the
annual industry cost of disposal.
5-5
-------
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 C through H) , 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 I
through N), 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 1979, future tailings are defined as the
tailings generated from 1980 through the year 2000.
For existing tailings, we assumed that the entire industry disposal
cost will be incurred over the five-year period, 1980 through 1984. 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 1980 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 and two industry demand scenarios. The
three discount rates are 10, 5, and 0 percent. The two industry demand
scenarios are a baseline projection, based on a DOE mid-range reactor
forecast, and a low-growth industry projection representative of either a
significant reduction in reactor capacity or an increased reliance on
imports.
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 and forecasts of milling
industry demand.
5-6
-------
5.1.2.1 Existing Tailings
Table 5.2 presents the total disposal cost for the 23 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. As the table indicates, there are no costs for Cases A, B, and
I since these cases call fo,r no controls for existing tailings. As stated
above, we assume that the costs are to be funded in five equal increments
over the period 1980 to 1984.
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 l^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 C through H, the existing mill costs are the simple average
of the two incremental unit cost estimates for the three model existing
tailings piles. The first incremental unit cost is estimated by dividing
the difference in total cost for the 2 and 7 million MT piles by the
tonnage difference. Similarly, the second incremental unit cost is
estimated by dividing the difference in total cost for the 7 and
20 million MT piles by the tonnage difference. These calculations were
made for each disposal method. The incremental cost per ton of tailings
is about the same for both the 2 to 7 million ton comparison and the 7 to
20 million ton comparison. Therefore, the average of the two incremental
unit costs was used to represent the industry unit cost.
This incremental unit cost may overstate the actual cost of disposing
of future tailings at some existing mills where substantial tailings
impoundment capacity exists. The incremental unit cost calculation
estimates the difference in the cost of covering piles having not only
different quantities of tailings, but also significantly different surface
areas. The surface area of the pile is a key determinant of the tailings
disposal cost. Mills with plenty of tailings capacity remaining in their
existing impoundment configuration can add to their piles without changing
the height of their tailings impoundment and, therefore, the amount of
surface area required for placement of the earthen cover. In these cases,
the incremental unit cost may overstate the unit cost of disposing of
future tailings. In cases where the existing tailings impoundment must be
expanded, the incremental unit cost appears to be a reasonable
approximation. Without doing a site-by-site investigation of tailings
capacity at existing mills and without being able to project at which
existing mills future production will take place, and how much, we cannot
determine to what extent our estimates may be overstated.
5-7
-------
Table 5.2 Total Disposal Cost for Existing Tailings
(23 Piles), By Economic Impact Case
(Millions of 1981 Dollars)
Pile Size:
(106 MT)
Economic Impact
Case # of Piles :
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
2
10
-
-
-
—
39
39
38
38
128
69
69
76
119
-
39
38
128
69
69
76
119
7
10
-
—
-
—
57
57
70
70
174
114
114
139
199
-
57
70
174
114
114
139
199
20
3
-
-
-
—
33
33
43
43
98
67
67
88
122
-
33
43
98
67
67
88
122
Total
Cost
-
-
-
-
129
129
151
151
400
250
250
303
440
-
129
151
400
250
250
303
440
124 437 382 943
5-8
-------
Table 5.3. Industry Unit Costs for Disposal
of Future Tailings (1981 dollars)
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
Existing
($/MT Tailings)
—
—
0.39
0.39
0.60
0.60
1.04
0.87
0.87
1.22
1.60
4.27
4.27
3.99
4.27
3.99
4.27
4.27
5.23
Mills
(J/MT U308)
—
419
419
645
645
1118
935
935
1312
1720
4590
4590
4289
4590
4289
4590
4590
5622
New Mills
($/MT Tailings)
0.14
3.26
4.27
10.85
3.07
4.27
3.26
3.99
4.27
3.99
4.27
4.27
5.23
4.27
4.27
3.99
4.27
3.99
4.27
4.27
5.23
(J/MT U308)
151
3505
4590
11664
3300
4590
3505
4289
4590
4289
4590
4590
5622
4590
4590
4289
4590
4289
4590
4590
5622
N
4.27
4590
4.27
4590
5-9
-------
For Cases I through N, 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 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
As stated earlier, we assume that the forecast of industry demand for
U^Og is the same for each case; in other words, total demand is
unaffected by the EPA standard. However, industry production at existing
mills versus new mills may differ by impact case according to the results
of the plant closure analysis. The plant 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. 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).
We also 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. For
conservatism, we did not make this assumption. 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. By assuming a fixed industry demand, the gap created by
any mill closures must be filled by either increased capacity utilization
rates for mills which continue to operate, reduced inventories, or
additional new mill capacity. Consequently, the occurence of mill
closures due to tailings disposal costs will result in varying projections
of existing and new mill production for each case. The effects of varying
the cash flow and cost absorption assumptions on the plant closure
analysis are discussed in the sensitivity analysis section of Appendix A.
5-10
-------
For the plant 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 2700 MT per day), three operating lives (5, 10 and 15 years),
and three sizes of existing piles (2, 7, and 20 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 15 model mill categories. A
separate analysis was performed for each of the 15 model mills and for
each impact case. Table 5.4 summarizes the results of the plant closure
analysis for the baseline and low-growth industry demand scenarios.
Appendix A presents a detailed description of the methodology and results
of the analysis.
Projections of Industry Production and Disposal Costs
Two projections of industry demand for conventionally-milled t^Og
were considered in this study. A baseline projection was derived which
corresponds to a mid-range forecast of U.S. installed reactor capacity.
An alternative projection - the low growth industry demand scenario - was
derived to represent a severe reduction in the growth of the conventional
U.S. uranium milling industry. Although a very low forecast of installed
reactor capacity was used to derive this demand for ^Og, this
projection can be used to also represent the case of a strong reliance on
imported U^Og. These projections, made on an annual basis from 1980
through 2000, are shown in Table 5.5, accompanied by their respective
uranium price projections.
Based on the projection of industry demand, the existing
inventory and the existing uranium mill capacity, we have estimated,
year-by-year, the industry production necessary to meet the demand for
domestically produced uranium. The methodology., which is explained in
depth in Appendix B, considers the following: new capacity which would
come on line in the absence 'of regulatory controls (Case A), the
obsolescence of existing capacity (permanently retired due to economic
reasons), the industry's annual average capacity utilization rate, and
premature mill closings (temporary reductions in capacity needed to work
off the abnormally high level of inventories, as discussed in Chapter 2).
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 5.4) due to the disposal costs for each case, additional premature
closures may result which, in turn, forces changes in the inventory level,
capacity utilization rate, and addition of new mill capacity, in order to
meet the industry demand. Separate tables for each impact sase (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 5.4. Summary of Mill Closure Analysis, Baseline
and Low Growth Industry Demand Scenarios(a)
Economic Impact
Case
A, B, C, D, E, F,
H]_, H2, I, J and K
H3, M]_, M2,
and M3
G
H4
L and M4
N
Model Mill
Closures
No Closures
1 small
2 small
1 small, 1 large
2 small, 1 large
5 small, 1 medium
3 large
Equivalent Number
of Small Mills^b)
0
1
2
4
5
16
(a)Based on assumptions of 100 percent cost absorption and
70 npri-pnf' c.a
-------
Table 5.5. Projection of Industry Demand and
Price of U308, 1980-2000
Baseline Industry Demand^3)
Low Growth Industry Demand
(b)
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
103 MT
U308
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4.
22.5
23.5
24.6
25.8
27.0
28.4
Price (1981 $ per
pound of 1^303)
29.3
30.7
32.1
33.5
34.8
36.2
37.6
39.0
40.3
41.7
43.1
44.5
45.9
47.2
48.6
50.0
51.4
52.7
54.1
55.5
56.9
103 MT
U308
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
Price (1981 $ per
pound of 11303)
29.3
30.7
32.1
33.5
34.8
36.2
37.6
39.0
39.2
39.3
39.5
39.6
39.8
39.5
39.3
39.1
38.8
38.5
36.9
35.4
34.0
(a)Based on the following forecast of installed reactor capacity (GWe):
1985 = 96; 1990 = 128; 1995 = 145; and 2000 = 175.
(b'Based on the following forecast of installed reactor capacity (GWe)
1985 = 96; 1990 = 122; 1995 = 125; and 2000 = 120
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. A
separate set of cost tables are presented for each of the industry demand
scenarios. The cumulative costs for each economic impact case, segmented
by industry category, are presented in Tables 5.6 and 5.7 for both demand
scenarios.
5.1.2.3 Present Worth Analysis
Once the yearly flows of costs have been derived, we can then perform
a present worth cost analysis of the economic impact cases. For each
industry demand scenario, the present worth cost for each case has been
calculated for three different discount rates (0, 5, and 10 percent). The
results of the present worth analysis are shown in Table 5.8. For
comparison purposes the ordinal rankings of each case are presented in
Table 5.9.
Table 5.9 shows the sensitivity of varying the discount rate.
Several changes in the relative ranking of the cases occur, but only one
case appears to be significantly affected by varying the discount rate.
For the baseline industry demand scenario, Case 83 is ranked the ninth
most expensive using a 10 percent rate, third most expensive with a
5 percent rate, while on an undiscounted basis this case is the most
costly. For the low-growth industry demand scenario, Case 83 is ranked
thirteenth for a 10 percent rate, tenth for a 5 percent rate, and third
for a zero rate. A closer look at this case explains this variability.
Case 83 is extremely costly for future tailings at new mills but calls
for no controls at existing mills for either existing or future tailings.
Therefore, the very high unit disposal costs are applied to new mill
production which grows rapidly throughout the 21-year projection period.
Discounting has a very large impact for this case since the years where
its greatest costs are incurred are given the least weight.
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.
5-14
-------
Table 5.6. Cumulative Industry Disposal Costs, 1980-2000 -
Baseline Industry Demand Scenario
(millions of 1981 dollars, undiscounted)
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
Existing
Tailings
0
0
0
0
129
129
151
151
400
250
250
303
440
0
129
151
400
250
250
303
440
Future Tailings,
Existing Mills
0
0
0
0
59
59
93
93
159
133
133
186
244
652
652
610
636
610
652
652
780
Future Tailings,
New Mills
42
952
1244
3170
897
1244
952
1164
1244
1164
1244
1244
1526
1244
1244
1164
1242
1164
1244
1244
1523
Total
Cost
42
952
1244
3170
1085
1433
1196
1408
1803
1547
1627
1733
2210
1896
2026
1926
2277
2024
2146
2199
2742
N 943 476 1373 2792
5-15
-------
Table 5.7. Cumulative Industry Disposal Costs, 1980-2000
Low Growth Industry Demand Scenario
(millions of 1981 dollars, undiscounted)
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H^
H4
I
J
K
L
Ml
M2
M3
M4
Existing
Tailings
0
0
0
0
129
129
151
151
400
250
250
303
440
0
129
151
400
250
250
303
440
Future Tailings,
Existing Mills
0
0
0
0
63
63
98
98
169
141
141
198
259
694
694
649
674
649
694
694
826
Future Tailings,
New Mills
25
610
757
1929
546
757
580
709
757
709
757
757
978
757
757
709
781
709
757
757
958
Total
Cost
25
610
757
1929
738
950
829
958
1326
1100
1149
1258
1676
1451
1580
1509
1855
1607
1701
1753
2224
943 505 881 2329
5-16
-------
Table 5.8. Present Worth Cost(a) of Economic Impact Cases
(millions of 1981 dollars)
Baseline Demand
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Discount Rate:
10%
10
219
286
728
337
417
384
433
676
530
549
618
818
644
742
718
940
793
834
874
1115
1333
5%
19
441
576
1467
570
731
639
737
1037
851
888
973
1264
1047
1159
1111
1382
1196
1263
1309
1651
1828
0%
42
952
1244
3170
1085
1433
1196
1408
1803
1547
1627
1733
2210
1896
2026
1926
2277
2024
2146
2199
2742
2792
Low Growth Demand
Discount Rate:
10%
6
149
187
477
267
319
310
342
580
440
452
522
709
555
653
634
855
708
744
784
1010
1231
5%
12
291
364
927
419
520
479
541
829
657
680
766
1030
853
965
929
1198
1015
1070
1115
1425
1619
0%
25
610
757
1929
738
950
829
958
1326
1100
1149
1258
1676
1451
1581
1509
1855
1607
1701
1753
2224
2329
(^Discounted to the beginning of 1980.
5-17
-------
Table 5.9. Ordinal Ranking of Present Worth Cost of
Economic Impact Cases (#1 is the most expensive)
Baseline Demand
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
Discount Rate:
10% 5% 0%
22
21
20
9
19
17
18
16
11
15
14
13
6
12
8
10
3
7
5
4
2
22
21
19
3
20
17
18
16
12
15
14
13
6
11
9
10
4
8
7
5
2
22
21
18
1
20
16
19
17
12
15
14
13
5
11
8
10
4
9
7
6
3
Low Growth Demand
Discount Rate:
10% 5% 0%
22
21
20
13
19
17
18
16
10
15
14
12
6
11
8
9
3
7
5
4
2
22
21
20
10
19
17
18
16
12
15
14
13
6
11
8
9
3
7
5
4
2
22
21
19
3
20
17
18
16
12
15
14
13
8
11
9
10
4
5
7
6
2
5-18
-------
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. We have attempted to circumvent
this problem in our analysis by using two alternative demand projections
which are far enough apart so that the estimated impacts for each case
will provide a broad, yet realistic, range, inside which we feel the
actual impacts will result.
Given each uranium demand scenario, it is 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
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.
Based on the information that we had on the uranium industry, we
developed two projections of the industry corresponding to the two demand
scenarios which takes into account the working down of existing excess
inventories, retirements of capacity due to exhaustion of ore deposits,
additions of new capacity, variable capacity utilization rates, and
premature closings due to market conditions. Industry average uranium
prices were also projected. These projections of uranium industry
activity are necessary so that we can measure the economic impacts of the
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 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
5-19
-------
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 5.10 shows the
range in percentage production cost increases across the model mills for
each impact case, assuming a base production cost of $30 per pound of
1)308. Cost increases for the least impacted model existing mill vary
across impact cases from 1.2 to 10.3 percent. The cost increase for the
most impacted existing mill varies from 7.1 to 67.6 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 5.11. The percentage cost increase is estimated to range from
2.2 percent to 67.6 percent for a small model mill. For a medium-sized
model mill, the percentage cost increase ranges from 1.4 percent to
20.7 percent. For a large model mill, the percentage cost increase ranges
from 1.2 percent to 65.8 percent. For a model new mill, the percentage
cost increase ranges from 0.2 percent to 18.1 percent. Appendix A
(Tables A-9, A-10, A-llc, and A-12) shows the complete results for all
model mills.
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
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 5.10.
5-20
-------
Table 5.10. Range of Production Cost Increases
across Model Mills by Economic Impact
(percents)
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Existing
Model with
Lowest
Production
Cost
Increase
-
-
-
-
1.2
1.2
1.5
1.5
3.5
2.4
2.4
3.1
4.3
7.1
7.6
7.2
8.8
7.6
8.0
8.1
10.3
8.8
Mills
Model with
Highest
Production
Cost
Increase
-
-
-
-
8.5
8.5
10.7
10.7
25.8
17.2
17.2
21.3
30.2
7.1
15.0
16.3
31.2
22.4
22.9
26.3
36.2
67.6
New Mill
Production
Cost
Increase
0.2
5.4
7.1
18.1
5.1
7.1
5.4
6.6
7.1
6.6
7.1
7.1
8.7
7.1
7.1
6.6
7.1
6.6
7.1
7-1
8.7
7.1
(a)
Assumes a base production cost of $30 per pound of U~OQ.
5-21
-------
Table 5.11. Range of Production Cost Increases
across Economic Impact Cases by Model Existing Mill(a)
(percents)
Size of Existing Tailings Pile
2 million MT 7 million MT
5 yrs 10 yrs 15 yrs 5 yrs 10 yrs 15 yrs
Small Mill
Low 6.0 3.1 2.2 7.1 NA 2.9
High 25.2 16.1 13.5 67.6 NA 24.8
Medium Mill
Low 3.3 1.9 1.4 NA 2.4 1.8
High 16.9 12.4 11.1 NA 20.7 15.9
/
Large Mill
Low NA NA 1.2 NA 1.8 1.4
High NA NA 10.3 NA 16.2 13.0
20 million MT
5 yrs 10 yrs 15 yrs
NA NA NA
NA NA NA
NA NA NA
NA NA NA
5.8 NA 2.1
65.8 NA 24.2
a base production cost of $30 per pound of 11303.
NA = Not Applicable.
5-22
-------
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 as many as nine
mills (5 small, 1 medium, 3 large) for Case N (see Table 5.4). 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
U^Og. These limited pass-throughs of the disposal cost represent
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 5.10. Therefore, these
pass-through levels are reasonable representations of the average industry
response to the requirements of the impact cases.
Table 5.12 presents the mill closure results by impact case for the
three different assumptions on price pass-through: no pass-through,
$1 per pound pass-through, and $2 per pound pass-through. The
relationship between alternative degrees of price pass-through and the
mill closure determination is evident from this table. The one small mill
closure for Cases H3, Mj_, and M/? is avoided with a $1 per pound
pass-through. In Case M3, the one small mill closure remains closed
under each pass-through scenario. For Case G, closures are reduced from
2 small mill equivalents with no pass-through to zero with $2 per pound
pass-through. For Case H4, the four closures (small mill equivalents)
are reduced to one at $2 per pound pass-through, while for M^, the five
closures are reduced to one. For the most costly case, N, the 16 small
mill equivalents are reduced to only 13 with a $2 per pound pass-through.
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;
5-23
-------
Table 5.12. Mill Closure Results of Alternative
Price Pass-Through Assumptions(a)
(number of small mill equivalents)
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
No Pass -Through
-
-
-
-
0
0
0
0
2
0
0
1
4
-
0
0
5
1
1
1
5
16
$1 Pass -Through
-
-
-
-
0
0
0
0
1
0
0
0
1
-
0
0
2
0
0
1
5
14
$2 Pass-Through
-
-
-
-
0
0
0
0
0
0
0
0
1
-
0
0
1
0
0
1
1
13
baseline industry demand scenario and cash flow margin
of 20 percent for each price pass-through scenario.
5-24
-------
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.
5.2.2.4 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 5.13 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 5.13 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.
5-25
-------
Table 5.13. Sales for Companies in the Uranium Industry
($ in millions)
i-n
I
t-o
American Atlantic
Total Company
Revenues
Uranium Segment
Revenues
Percent
Uranium Revenues/
Company Revenues
Year
1978
1979
1980
1978
1979
1980
1978
1979
1980
Nuclear
1.6
10.0
5.6
.4
8.2
2.0
23.4
82.3
35.1
Richfield Atlas
12,738
16,676
24,155
< 1
.8 53.3
.7 70.9
.6 95.3
26.8
38.3
60.1
50.4
54.0
.0 63.1
Conoco
9,871.8
13,083.9
18,766.3
13.7
16.3
34.4
< 1.0
Exxon
63,896.0
83,555.0
108,449.0
< 1.0
Federal
Resources
18.3
20.4
23.8
100.0
Getty
(Petrotomics)
3,758.0
5,121.0
10,437.0
< 1.0
Home stake
170.3
234.8
345.5
44.9
42.4
45.4
26.4
18.1
13.1
Total Company
Revenues
Uranium Segment
Revenues
Percent
Uranium Revenues/
Company Revenues
Year
1978
1979
1980
1978
1979
1980
1978
1979
1980
Kerr-
McGee
2,072.4
2,683.5
3,477.9
115.2
163.4
238.9
5.6
6.1
6.9
Newmont
(Dawn)
685.2
867.6
881.6
12.0
14.7
1.4
1.7
Phelps
Dodge
(Western
Nuclear)
1,007.5
43.0
4.3
Pioneer
556.0
732.5
912.0
13.8
20.2
7.8
2.5
2.8
0.9
Rio Algoma
576.1
710.7
847.5
153.1
157.2
225.9
26.6
22.1
26.7
Standard
Oil of
Calif.
(Chevron)
24,106.0
30,938.0
41,553.0
< 1.0
Standard
Oil of
Ohio UNC
5,197.7 246.7
7,916.0 291.7
11,023.2 274.0
133.2
181.6
167.8
54.0
62.3
< 1.0 61.3
Union
Carbide
7,870.0
9,177.0
9,994.0
< 1.0
aCanadian and U.S. operations.
Source: Companies' 1980 Annual Reports or from 1980 Form 10-K.
-------
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.
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 1981 are presented for each company in
the first column of Table 5.14. An example of the calculation is as
follows: The Atlantic Richfield Company (ARCO) shows long term debt of
$3239.3 million in 1981 and shareholders equity of $8665.2 million. Total
capitalization is, therefore, $11904.5 million. The debt ratio is
27.2 percent ($3239.3 million divided by $11904.5 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 disposal methods ET3 and ET7- Method ET3 requires a
3-meter earth cover and rodk cover on the slopes, while ET7 requires
moving the existing pile and putting the tailings below grade with a liner
and a 3-meter cover. Method ET7 is the most expensive control technique
and represents a "worst case" scenario. These model pile costs (millions
of 1981 dollars) are as follows:
Tailings Pile Size
Disposal Method
ET3
ET7
2 (10 MT)
6.9
12.3
7 (10 MT)
11.4
43.7
20 (10 MT)
22.3
126.9
5-27
-------
Table 5.14. Capital Availability Analysis: Debt/Total Capitalization
Ratios for Firms with Existing Tailings Piles
Before Control Costs
Consolidated Corp.
Atlantic Richfield Co.
Atlas Corp.
Standard Oil of Gal.
^n (Chevron)
i
IS* Conoco, Inc.
OO '
Pioneer Corp.
Commonwealth Edison
Newmont Mining Corp.
Exxon Corp.
Federal Resources Corp.
American Nuclear Corp.
Homes take Mining
Kerr-McGee Corp.
General Electric Co.
(1) (2) (3)
Debt/Total Average^1) Debt/Total
Capitalization Debt/Total Capitalization
1981 Capitalization for ET3
(Percent) (Percent) (Percent)
27.2
35.7
8.4
23.1(2)
31.6(2)
54.1
10.7
15.3
19.9(4)
56.8(4)
.8
35.9
10.4
31.0
30.9
12.3
26.6(2)
41.7(2)
53.2
15.1(3)
15.9
7.5(4)
49.8(4)
.4
25.9
12.7
27.3
44.8
8.4
23.2
32.5
54.1
11.1
15.4
71.0
64.3
7.7
36.5
10.6
After Control Costs
(4)
Increase in
Debt Ratio
with Controls
(ET3) (3)-(l)
0.1
9.1
0
.1
0.9
0
0.4
0.1
51.1
7.5
6.9
0.6
0.2
(5)
Debt/Total
Capitalization
for ET7
(Percent)
28.0
60.6
8.5
23.3
34.9
54.1
11.5
15.4
89.7
76.1
30.4
39.2
11.2
(6)
Increase in
Debt Ratio
with Controls
(ET7) (5)-U)
0.8
24.9
0.1
.2
3.3
0
0.8
0.1
69.8
19.3
29.6
3.3
0.8
-------
Table 5.14. Capital Availability Analysis: Debt/Total Capitalization
Ratios for Firms with Existing Tailings Piles
(continued)
Before Control Costs
Consolidated Corp.
Getty Oil Co.
Rio Algom Limited
Union Pacific Corp.
Southern Calif. Edison Co.
Standard Oil Co. (Ohio)
Reserve Oil & Minerals
Corp.
Union Carbide Corp.
UNC Resources, Inc.
Phelps Dodge
(1)
Debt/Total
Capitalization
1981
(Percent)
11.8
16.8
35.4
48.2
36.9
1981: Neg(5)
net worth
28.5
26.7
34.7
(2)
Average^-)
Debt/Total
Capitalization
(Percent)
8.2
21.9
29.7
49.0
54.5
9.9(5)
29.6
34.1
38.5
(3)
Debt/Total
Capitalization
for ET3
(Percent)
11.9
17.8
35.5
48.3
36.9
60.6(5)
28.8
28.9
35.4
After Control Costs
(4)
Increase in
Debt Ratio
with Controls
(ET3) (3)-(l)
0.1
1.0
0.1
0.1
0
50.2
0.3
2.2
0.7
(5)
Debt/Total
Capitalization
for ET7
(Percent)
12.0
18.5
35.7
48.4
36.9
73.4
29.4
30.4
36.9
(6)
Increase in
Debt Ratio
with Controls
(ET7) (5)-(l)
0.2
1.7
0.3
0.2
0
63.0
0.9
3.7
2.2
(3)
(4)
The average ratio represents a five year average from 1977 to 1981 except if noted otherwise.
The debt ratio is for the year 1980 and the average is for the period 1976 to 1980. In 1981 Conoco was acquired
by DuPont.
The average represents the three year period from 1979 to 1981.
The debt ratio is for the year 1982 and the average represents the four year period, 1979 to 1982.
Oil and Minerals Corp. showed a large loss for 1981 which resulted in a negative net worth position. The
average debt ratio represents a two year period, 1979 and 1980. Data prior to 1979 are not available. The
financial data used as the basis for the after control costs ratios are from 1980. The calculation of the increase
in the ratio with controls uses the average debt ratio as the base.
-------
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 ET3, it can be seen from Table A-3 that the Anaconda (a subsidiary of
ARCO) pile is of the 20 million metric ton size and has control costs of
$22.3 million. This amount is then added to the debt amount of
$3239.3 million, resulting in $3261.6 million. The total capitalization
is now $22.3 million plus $11904.5 or $11926.8 million. Dividing $3261.6
million by $11926.8 million results in 27.3 percent, or an increase of 0.1
percent in the no-control debt ratio. In this particular case, because
ARCO 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 5.14 while column (5) presents the debt
ratios using ET7 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 5.14, 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 5.15.
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
5-30
-------
Table 5.15. Capital Availability Analysis: Grouping of Firms
by Degree of Capital Availability Problems
(percentage points)
GROUP 1: Minimal or No Impact in
Meeting either ET3 or ET7
Increase in
Debt Ratio with
Controls (ET3)
Increase in
Debt Ratio with
Controls (ET7)
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
.1
.1
.1
.1
.1
.1
.2
.4
.3
1.0
.7
.6
.9
2.2
.1
.1
.2
.2
.2
.3
.8
.8
.8
.9
1.7
2.2
3.3
3.3
3.7
GROUP 2: Some Difficulty in Meeting
ET3 and Significant Problems
in Meeting ET7
Atlas Corp.
Homestake Mining
9.1
6.9
24.9
29.6
GROUP 3: Significant Problems in
^_ Meeting Either ET3 or ET7
American Nuclear Corp.
Reserve Oil & Minerals Corp.
Federal Resources Corp.
7.5
50.2
51.1
' a'Percentage point changes are taken from Table 5.14.
- = negligible impact (below .1 percentage points).
19.3
63.0
69.8
5-31
-------
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 ET3 or ET7) is readily manageable, generally
less than five percentage points. The debt ratios for these firms do not
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.
One company in Group 1 may be more affected by the control costs than
the other companies. The Kerr-McGee Corporation shows a much higher debt
ratio with controls than their average debt ratio. As presented in
Table 5.14, their 1981 debt ratio of 35.9 percent is significantly greater
than their average ratio of 25.9 percent. This situation arises because,
prior to 1981, the debt ratio ranged from 19 to 28 percent. In 1981,
Kerr-McGee increased their amount of debt by 60 percent from the prior
year, resulting in a debt ratio of 35.9 percent. Therefore, we believe
that a debt ratio of either 36.5 percent (ET3) or 39.2 (ET7) can be
undertaken by the company.
The two companies in Group 2 may have difficulty in obtaining the
necessary capital, but for different reasons. 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 1981
and it was extremely small, 0.8 percent. They have a large tailings pile
which would result in debt ratios of 7.7 percent for ET3 and 30.4 percent
for ET7. Although these debt ratios 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. This situation is considerably more
relevant to the higher level of financing associated with ET7 than with
ET3. 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 Homestake's 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 Atlas Corporation presents a
different situation. Their debt ratio changes from a no-control ratio of
35.7 percent to 44.8 percent with ET3, and 60.6 percent with ET7- Both of
these debt levels are high, particularly the ratio associated with ET7. A
debt ratio of 60 percent would be excessive for extremely profitable
companies. This level of debt has not been experienced by any firms in
5-32
-------
this industry in recent years and is simply not a financially viable
situation. Atlas has had an uneven earnings history over the past
five years with a net loss in 1979, and the major segment of their
business is uranium, which is currently in a period of contraction.
Therefore, this level of debt is not feasible, and even the lower level of
44.8 (ET3) may present difficulties, although the company was almost at
this debt level in 1980 when it reached 44.5 percent.
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 losses for three consecutive fiscal years, 1979 through 1981. 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 5.3. 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.
5.2.3 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.25 Table 5.16 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 5.17 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.
5-33
-------
Table 5.16. Demographics of the Model Uranium Mining and Milling Region
Distance from Area Population % Increase Current
Mill (Km) (Km2) i960 1976 1960-1976 Labor Force
Inner
Outer
Total
Source
Subregion
Subregion
Region
0-40
40-80
0-80
5
15
20
,000
,000
,000
1,920
47,560
49,480
: U.S. Nuclear Regulatory Commission,
Impact Statement on Uranium Milling,
2,
55,
57,
Final
200
100
300
Generic
NUREG-0706,
15
16
16 20,
Environmental
September 1980
-
-
800
•
5-34
-------
Table 5.17. 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
(^Source: U.S. Nuclear
Environmental Impact
% Employed
By Sector(a)
5.0
18.7
21.8
13.1
7.5
3.0
8.8
11.2
10.9
100.0
Sector
Employment
1,040
3,890
4,534
2,725
1,560
624
1,830
2,330
2,267
20,800
Sector
Payroll^)
(million $)
15.23
46.93
55.26
32.42
28.07
7.33
36.58
43.38
37.20
302.40
Regulatory Commission, Final Generic
Statement on Uranium
Milling, NUREG-0706,
September 1980. The original NRC distribution was adjusted to include
agriculture.
'•'-'•'Sector 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, 1980.
5-35
-------
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
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 5.18. The direct impacts on employment resulting from
a mill closure range from a decrease of 70 employees for a small model
mill to 210 employees for a large model mill. Total employment impacts
range between 155 and 464 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
2.2 percent, depending on the size of the model mill closure.
The total impact on the region's payroll ranges between $3.2 million
and $9.5 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 3.2 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
"lling industry.
5-36
-------
Table 5.18. 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)
907
1,814
2,721
Mill
Employees3
70
140
210
Total
Impact
on Work
Forceb
155
309
464
% of
Region1 s
Work
Force
0.7
1.5
2.2
Total Mill
Payroll
(Million $)c
1.6
3.2
4.8
Total Impact
on Payroll
(Million $)d
3.2
6.3
9.5
Percent
of Area
Payroll
1.1
2.1
3.2
aThis 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.
bMill employees times 2.21.
cTotal 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.
CTotal mill payroll times 1.97.
5-37
-------
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 impacts will have minor
impact at this level. As a result, these effects may be difficult, or
even impossible, to discern. For example, even though 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 may be discernible at the national level is imports of uranium.
For the most costly impact case, there is the potential that nine
model mills will close (5 small, 1 medium, 3 large). These nine model
mills represent about 4800 metric tons of 1^303 capacity, or about
27 percent of total 1980 industry capacity of 18,000 metric tons. If the
market price for yellowcake is depressed so that it is not economical for
new mills to replace this capacity, imports may replace lost domestic
production.
An increase in the imports share of the domestic market, to about
30 percent, by 1985 seems possible given the results of a recent study by
Nuclear Resources International (NRI81). That report estimates that the
average penetration of imports into the domestic market assuming no import
controls would range from 22 to 23 percent during the period 1983-1990.
An upper boundary for foreign uranium purchases is estimated to be
approximately 31 percent. This 31 percent limit suggests that domestic
utilities would consider purchasing a maximum of 31 percent of their
requirements from foreign producers. As described in Chapter 2, some
domestic utilities may not wish to purchase that much uranium from foreign
producers because foreign sources of supply are less certain than domestic
sources of supply. (For the 1991-2000 period, an average purchase limit
of about 36 percent is estimated to be an upper boundary.) Even under our
worst-case scenario of nine model mill closures, production from the lost
domestic capacity could be substituted by the additional use of imports
without exceeding the 31 percent upper boundary.
We cannot estimate the impact of tailings disposal costs on imports
of uranium for several reasons. First, the ban on imports from 1964 to
1976 prevents any attempt at analysis using past behavior to predict
future behavior. Therefore, we cannot estimate the domestic demand
elasticity for imports.
Second, the precise nature of the monopolistic power wielded by
foreign governments is not known. Even though several foreign countries
already have significant comparative cost advantages in the production of
uranium, import prices do not always reflect the lower costs.
5-38
-------
A final consideration with respect to imports and the maintenance of
a viable domestic uranium industry is the subject of national security.
Undoubtedly, the existence of a domestic source of supply of uranium
implies a more stable source of supply than does a substantial reliance on
imports. Evidence of the importance of this consideration is provided by
the existence of the current restriction on 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
35 percent of all the tailings which we estimate have accumulated at all
the licensed mills as of January 1980 (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
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
5-39
-------
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 23
existing tailings piles (from Table 5.2) by the estimated total quantity
of tailings at these piles, 146 million MT. These estimates are presented
in Table 5.19. Ignoring the no disposal cases (A, B, and I), the subsidy
estimates range from 44 million dollars for Cases C and D to 329 million
dollars for Case N.
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.
5-40
-------
Table 5.19. Subsidy Estimates for Commingled Tailings
By Economic Impact Case
(millions of 1981 dollars)
Economic Impact Case Amount of Subsidy
A
C 44
D 44
E 53
F 53
G 140
HL 87
H2 8?
H3 106
H4 154
I
J 44
K 53
L 140
ML 87
M2 87
M3 106
M4 154
N 329
5-41
-------
REFERENCES FOR CHAPTER 5
DOE82 U.S. Department of Energy, Commingled Uranium Tailings Study,
Volume I, Plan for Stabilization and Management of Commingled
Uranxum'llill Tailings, DOE/DP^Oll, June 30, 19827"
EMJ81 Engineering and Mining Journal, "Can Changes be Made that Will
Encourage Mine Development?" May 1981.
NRI81 Nuclear Resources International, "Domestic Utility Attitudes
Toward Foreign Uranium Supply," prepared for the U.S. Department
of Energy, Grand Junction Office, Contract No. DE-AC13-76GJ01664,
June 1981.
5-42
-------
6. Selection of Proposed Standards
There are two major parts of the proposed 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 proposed 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.
Our rationale for selecting the proposed standards for disposal is
presented in section 6.2. The selection is based on material presented
earlier in this RIA and on information contained in the EIS.
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.
We have reviewed the adequacy of these standards as they relate to
uranium mill tailings piles and conclude that additional standards under
the Act are not warranted. We considered the need for more stringent
standards, but conclude that the benefits do not justify the additional
costs to meet such standards and that determination of compliance with
standards at lower dose levels could be difficult and costly. We also
considered a less stringent standard and conclude that, since control
methods are available at reasonable costs to meet the current standards,
there is no justification for raising the standards to higher levels.
Radon Emissions
Control of radon emissions from uranium mill tailings are 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
6-1
-------
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
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.
Practical methods for significantly reducing radon emissions during
the operational phase of existing mills are limited in their effectiveness
to about a factor of 3 reduction; the exact degree depends strongly on
specific characteristics of the tailings management scheme appropriate for
a given site. Control can be achieved by keeping the tailings wet
(usually with process liquids) or by covering portions of the pile not in
active use with earth.
The incremental increase in the working level concentration in houses
caused by 1 pCi/1 of radon in air is about 0.005 WL. Such an increase
over a 15-year period (the operational period of the model mill) would
cause an increase in the lifetime risk of lung cancer of 1 in 1,000.
Although such incremental risks are not insignificant, they are only about
25 percent of the average risk to individuals from natural radon sources,
and only a very few individuals would be exposed to these levels. Based
on all of the above, we have concluded that a more restrictive radon
standard than now exists for the operating phase of a mill is not
justified. The regulatory agency should assure, under the Federal
Radiation Protection Guidance, that exposure to radon emissions is
minimized as far below existing limits as is practicable, through the
choice of tailings management procedures and site boundaries.
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.
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
require 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."
6-2
-------
In view of the comprehensive regulatory program in place for surface
water discharges from the uranium milling industry, we believe no
additional standards for surface water are needed under this Act.
Groundwater Protection
The Act requires that the standards proposed herein 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 regulate in conformance with the SWDA
(Section 84a(3)). 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 and to remove leachate from these units before it enters
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.
6-3
-------
The standard proposed here to carry out the first element of the
groundwater protection strategy is contained in Subpart K of existing SWDA
regulations, at 40 CFR Section 264.221, which applies to surface
impoundments. This section requires a liner that is designed,
constructed, and installed to prevent migration of wastes out of the
impoundment to the adjacent subsurface soil, or groundwater, or surface
water during the active life (including the closure period) of the
impoundment. Under this section, an exemption to the requirement for a
liner may be granted if the owner or operator demonstrates that alternate
design and operating practices, together with location characteristics,
will prevent the migration of any hazardous constituents into ground or
surface water. This section also exempts the pre-existing portion of an
impoundment from the liner requirement. The existing portion is defined
as the land surface area on which wastes (in this case, tailings) have
been placed prior to the effective date of the regulations.
Two points are important here. First, by providing an exemption
procedure to the liner requirement, EPA recognized that adequate
groundwater protection can be achieved at some locations without a liner.
An example of a situation for which this exemption may be appropriate is
one where: (1) the unsaturated zone below the impoundment is composed of
materials that are capable of attenuating any hazardous constituents in
the process liquid before it reaches ground or surface water (e.g.,
holding up hazardous constituents through ion exchange); (2) the tailings
are located in an arid area in which precipitation does not recharge
groundwater; and/or (3) the quantity of wastes is very small.
Second, the requirement for a liner does not apply to the land
surface areas where tailings are currently placed. This means that a
liner would usually not have to be installed under existing tailings.
This is consistent with our economic analysis which indicates that
installing liners under existing tailings is usually not cost effective.
Further, depositing tailings on existing piles could continue as long as
the pile surface area is not expanded and limiting concentrations of
hazardous constituents are not exceeded in groundwater. However, any
expanded portion of an existing impoundment would be subject to the same
liner requirements (or their equivalent) as a new impoundment. If
hazardous constituent concentration limits exceed the groundwater
standards, continued deposition of tailings on an existing pile may or may
not be permissible, depending on the effectiveness of the corrective
action program or the result of a decision to seek an alternate standard
or an exemption.
Finally, the proposed standard exempts uranium byproduct material
impoundments from the surface closure requirements of Section 264.228.
This modification is proposed since the proposed standards for disposal of
tailings (Section 192.32(b)) are adequate to protect groundwater. The
considerations involved are discussed in more detail below.
6-4
-------
In summary, EPA proposes here a primary groundwater protection
requirement to prevent seepage of leachate from the tailings into
groundwater. This is consistent with the primary groundwater protection
standard specified in the SWDA regulation, where such a standard is
identified as a "technical performance" standard. In many cases, this may
require installation of a liner under the tailings. However, a liner is
not required if an equivalent level of protection can be achieved through
the selection of a tailings impoundment location.
The standard proposed here to carry out the second element of the
groundwater protection strategy is also contained in existing SWDA
regulations, at 40 CFR Section 264.92. This standard specifies two
additional parts. The first part is contained in Section 264.93 and
identifies hazardous constituents as those listed in Appendix VIII of
Part 261. We propose to add two hazardous chemical elements, molybdenum
and uranium, commonly present in tailings. The second part is contained
in Section 264.94 and requires that "...no increase over background
levels" be allowed for most listed constituents. This approach is
consistent with a groundwater protection philosophy that seeks to maintain
groundwater quality for any current or future uses. The second part also
contains Table 1 - "Maximum Concentration of Constituents for Groundwater
Protection." These standards are maximum concentration limits for a
particular set of toxic metals and pesticides and were first established
in the National Interim Primary Drinking Water Regulations (NIPDWR) as
health-based concentration limits. We propose to add to these limits the
corresponding NIPDWR limits for the radioactive materials found in
tailings.
These proposed standards would require the measurement of background
concentrations of hazardous constituents in groundwater at each tailings
site. Background concentrations would be measured only for those
hazardous constituents that are reasonably expected to be in or derived
from the tailings. The standards would then be established for most
constituents at the background groundwater concentrations. The maximum
concentrations listed in Table 1 of Section 264.94 of this chapter and the
maximum concentrations of radioactive materials listed in Table A of the
proposed standards would be established as standards if these
concentrations are greater than the background concentrations. If
background concentrations are greater than the Table 1 and Table A
concentrations, the standards would be established at the background
concentrations.
The SWDA standards allow the Regional Administrator to exclude a
hazardous constituent from the list of hazardous constituents applicable
to a site if he finds that the constituent is not capable of posing a
substantial present or potential hazard to human health or the environment
(Section 264.93(b) and (c)). He is also allowed to establish an alternate
concentration limit for a hazardous constituent if he finds that the
constituent will not pose a substantial present or potential hazard to
6-5
-------
human health or the environment as long as the alternate concentration is
not exceeded (Section 264.94(b) and (c)). EPA believes that
determinations as to what constituent levels pose a health hazard are a
primary responsibility of EPA and cannot be delegated to other agencies.
Therefore, we propose to retain effective control over granting of
exemptions and establishment of alternate standards for groundwater by
requiring EPA concurrence in regulatory decisions regarding such
exemptions and alternate standards.
Section 264.100 of the SWDA regulations requires that a corrective
action program be initiated when hazardous constituent concentration
limits are exceeded in groundwater. However, the time within which this
corrective action program is to be initiated is not specified. We propose
to require this corrective action program be initiated within one year, if
such a program is needed. A restriction on the period for beginning
corrective actions is reasonable for tailings sites since there are less
than 30 licensed sites all containing similar materials. The SWDA
regulations require only that corrective actions begin within a reasonable
time period. However, the SWDA regulations are applicable to thousands of
sites, with a wide variety of hazardous constituents.
6.2 Disposal Standards
6.2.1 Form of the Standards
Standards can be in the form of engineering specifications, design
considerations, performance requirements, or ambient environmental
levels. Engineering standards for tailings disposal would likely specify
the type and.minimum thickness of earthen cover to be used for disposal.
EPA is precluded from issuing engineering standards for uranium byproduct
material in the legislative history of the Act. The Report (on the Act)
of the Committee on Interior and Insular Affairs, U.S. House of
Representatives (U.S.78), states, "The EPA standards and criteria should
not interject any detailed or site-specific requirements for management,
technology, or engineering methods on licensees..."
Performance standards specify the level of control that must be
achieved, but do not specify how the level is to be achieved. They often
take the form of release rate limits, but can be stated in concentration
limits of air or water if the pathway through the environment is
adequately known.
Design standards specify what is to be achieved by control methods.
They guide the design of control methods without specifying engineering
requirements and thus allow creativity and initiative to be used in
providing control methods. They often take the form of requirements which
cannot be precisely measured and must be calculated. An example of a
design standard is specifying the minimum number of years that controls
must be effective.
6-6
-------
General ambient standards usually take the form of a concentration
limit in air or water. They can also take the form of a radiation dose
limit to humans since radiation dose can be directly related to ambient
concentrations.
After consideration of the available forms, we conclude that a
standard specifying release rate limits of radon to the atmosphere is the
form most likely to accomplish the goals of the disposal standard. These
goals are presented in Chapter 3.
Release rate limits for radon can be directly related to the
thickness of earthen cover material - the primary control technique
assumed in this RIA - by using Figure 3.1. The radon emission rate for
new tailings with no controls was estimated as 280 pCi/m^s by the NRC
(NRC80). This value can also be used for existing tailings since more
recent processing of lower grade ores would result in a release rate of
about 280 pCi/m^s from the top of the pile where the more recently
generated tailings are deposited.
Using Figure 3.1 and the uncontrolled radon source term of
280 pCi/m^s, we conservatively estimated the release rates for the
disposal methods:
thickness of radon control radon release
earth cover achieved for 1,000 years rate
(m) (%) (PCi/m2s)
0.5 50 150
1 80 60
3 95 20
5 > 99 2
These are conservative estimates since they reflect an average soil with
no compaction. In practice, we anticipate that greater levels of radon
control may be achieved than indicated for the various cover thicknesses.
The period over which the indicated control is achieved is 1,000 years.
Thus, the percent of radon control indicates control of that fraction of
the total radon emissions expected over 1,000 years if no control measures
are taken.
By specifying a radon release limit that would require a thick cover,
e.g., about 3m of earth, we would also fulfill the other objectives
discussed in Chapter 3. This is discussed in detail in the next section.
6.2.2 Level of Control
The objectives of tailings control and stabilization efforts are to
prevent their misuse by man, to reduce radon emissions (and gamma radiation
exposure), and to avoid the contamination of land and water by preventing
erosion by natural processes. The longevity (i.e., long-term integrity)
of control is particularly important. This is affected by the potential
6-7
-------
for disruption by man; by the probability of occurrence of such natural
phenomena as earthquakes, floods, windstorms, and glaciers; and by
chemical and mechanical processes in the piles. Prediction of the
long-term integrity of control methods becomes less certain as the period
of concern increases. Beyond several thousand years, long-term geological
processes and climatic change become the dominant factors.
Methods to prevent misuse by man and disruption by natural phenomena
may be divided into those whose integrity depends upon man and his
institutions ("active" controls) and those that do not ("passive"
controls). Examples of active controls are fences, warning signs,
restrictions on land use, and inspection and repair of semi-permanent
tailings covers, temporary dikes, and drainage courses. Examples of
passive controls are thick earthen covers, rock covers, massive earth and
rock dikes, burial below grade, and moving piles out of locations highly
subject to erosion, such as unstable river banks.
Erosion of tailings by wind, rain, and flooding can be inhibited by
contouring the pile and its cover, by stabilizing the surface (with rock,
for example) to make it resistant to erosion, and by constructing dikes.
If necessary, erosion can be inhibited by burying tailings in a shallow
pit or moving them away from a particularly flood-prone or otherwise
geologically unstable site.
Earth covers can reduce the likelihood of human intrusion into the
tailings, especially if the cover is thick enough. A one-meter earth
cover provides only limited prevention of misuse since man commonly digs
to such depths for many purposes. However, an earth cover in the range of
3 to 5 meters thickness will substantially reduce the likelihood of
intrusion into tailings. The Agency is not aware of any historical
examples of societies successfully maintaining active care of
decentralized materials through public institutions for periods extending
to many hundreds or thousands of years. We have concluded that primary
reliance on passive measures (thick covers) is preferable since their
long-term performance can be projected with more assurance than that of
measures which rely on institutions and on continued expenditures for
active maintenance.
An even better method for surface disposal of tailings is burial in
surface pits with a 3 to 5 meter earth cover back up to the original grade
(earth contour). The chance of misuse for this method is less than above
surface disposal since the tailings disposal site would be indistin-
guishable from surrounding terrain. There would be no easily identifiable
pile with rock covered slopes, clearly an indication of human activity.
Methods to control release of radon range from applying a simple
barrier (such as an earthen cover) to such ambitious treatments as
embedding tailings in cement or processing them to remove radium, the
precursor of radon. Covering tailings with a permeable (porous) barrier,
6-8
-------
such as earth, delays radon diffusion so that most of it decays and is
effectively retained in the cover. In addition to simple earthen covers,
other less permeable materials such as asphalt, clay, or soil cement,
usually in combination with earthen covers, may be used. The more
permeable the covering material, the thicker it must be to achieve a given
reduction in radon release. However, maintaining the integrity of very
thin impermeable covers, such as plastic sheets, even over a period as
short as several decades, is unlikely given the chemical and physical
stresses present at piles.
The most likely constituents of cover for use to control tailings are
locally available earthen materials. 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 the west
exhibit ambient moisture contents of 9% to 12%. For non-clay soils,
ambient moisture contents range from 6% to 10%. The following table
provides, as an example, the cover thicknesses that would be required to
reduce the flux of radon to 20 pCi/m^s for the above ranges of soil
moisture. Three examples of tailings are shown that cover the probable
extreme values of radon flux from tailings at designated sites (100 to
1000 pCi/m^s); the most common value is probably about 280 pCi/m^s.
Estimated Cover Thickness in Meters to Reduce
2
the Flux of Radon to 20 pCi/m s
Initial
Tailings Flux Percent Moisture Content of Cover
(PCi/m2s)
6 8 10 12
100
300
1000
1.7
2.8
4.1
1.3
2.1
3.2
1.0
1.5
2.4
0.7
1.1
1.8
Those values are for simple homogeneous covers. In practice,
multi-layer covers using clay next to the tailings can be used to
significantly reduce the total thickness required.
Methods that control radon emissions will also prevent transport of
particulates from the tailings pile to air or to surface water.
Similarly, permeable covers sufficiently thick for effective radon control
will also absorb gamma radiation effectively (although thin impermeable
covers will not).
6-9
-------
Very effective long-term inhibition of misuse by man, as well as of
releases to air and surface water, could be achieved by burying tailings
in deep mined cavities. In this case, however, direct contact with ground
water would be difficult to avoid. The potential hazards of tailings
could also be reduced by chemically processing them to remove
contaminants. Such processes have limited efficiencies, however, so the
residual tailings would still require control. Furthermore, the extracted
substances (e.g., radium and thorium) would be concentrated and would
require further control.
We believe that groundwater protection after disposal of the tailings
is provided by a well-designed and carefully maintained cap (cover). The
requirements for closure (disposal) of surface impoundments for hazardous
waste under the SWDA, as amended, include a cover designed and constructed
to: (a) provide long-term minimization of the migration of liquids
through the closed impoundment; (b) function with minimum maintenance;
(c) promote drainage and minimize erosion or abrasion of the final cover;
(d) accommodate settling and subsidence so that the cover's integrity is
maintained; and (e) have a permeability less than or equal to the
permeability of any bottom liner system or natural subsoils present.
EPA1 s view of the function of a liner contrasts somewhat with that of
some members of the public and the regulated community. Some have argued
that liners are devices that provide a perpetual seal against any
migration from a waste management unit. EPA has concluded that the more
reasonable assumption, based on what is known about the pressures placed
on liners over time, is that any liner will begin to leak eventually.
Others have argued" that liners should be viewed as a means of retarding
the movement of liquids from a unit for some period of time. While this
view accords with how liners do in fact operate, EPA does not believe that
this is a sound regulatory strategy for groundwater protection because it
is principally designed to delay the appearance of groundwater
contamination rather than to achieve a more permanent solution.
Accordingly, EPA views liners as a barrier technology that can be best
used to facilitate the removal of liquids from a waste management unit
during its active life (including the closure period) and thereby provide
a greater assurance of long-term protection at the facility.
While liners may remain effective at preventing migration from the
unit until well after closure, their principal role occurs during the
active life. After closure, EPA believes that a protective cap becomes
the prime element of the liquids management strategy. A well-designed and
carefully maintained cap can be quite effective at reducing the volume of
liquids entering a unit and, therefore, can substantially reduce the
potential for leachate generation at the unit for long periods.
The cost-effectiveness analysis of disposal methods presented in
Chapter 4 concludes that the optimal level of control for both existing
and new tailings piles is that reflected by a three-meter earth cover. As
shown earlier in this chapter, this level of control is estimated to
6-10
-------
represent a radon release rate of about 20 pCi/m2s. Therefore, our
design standard for tailings disposal assumes this radon release limit.
We feel that conformance with this radon release rate will prevent the
misuse of the tailings by man, reduce radon emissions and gamma radiation
exposure, and avoid the contamination of land and water for a long period
of time.
6.2.3 Impacts of Proposed Standards
Environmental Impacts
Under the proposed standards, the tailings would remain covered and
isolated for 1,000 years or more. Even under very severe conditions of
erosion they would remain covered for at least 200 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
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 the proposed
standards, the total deaths avoided (compared to tailings piles which are
left uncontrolled) would be about 1400 for the first 100 years after
disposal and many thousands during the first thousand years. These
estimates relate to the cumulative generation of tailings through the year
2000 under baseline projection conditions. If no controls are
implemented, the health risk to people living very near to tailings (600
meters from the center of the tailings pile) is about 4 chances in 100 of
fatal lung cancer during their lifetime. This risk is reduced to about 2
chances in 1,000 under the proposed standards.
The misuse of tailings in constructing buildings poses the greatest
hazard to human health associated with tailings. Under the proposed
standard, we believe the possibility of unauthorized removal of the
tailings will be unlikely for at least 1,000 years.
6-11
-------
We estimate that covering the tailings under the proposed standard
could result in 10 to 11 accidental deaths and 6 to 8 radiation induced
deaths for all tailings (existing and new) to the year 2000. These deaths
would occur among workers only.
Economic Impacts
The level of control required by the disposal standards approximates
that which is provided by a three-meter earthen cover. Therefore, we have
assumed that the cost of the economic impact cases in' Chapter 5 which use
this disposal method represent the cost of the proposed standards. We
have determined that four cases - H]_, H2, M]^, and M£ - which use a
three-meter cover are possible outcomes of meeting the requirements of the
standards. These four cases provide a probable range in the estimated
economic consequences of the standards.
All four of the impact cases assume disposal method ET3 - a
three-meter earth cover above-grade with rock cover on the slopes - for
existing tailings piles. Cases H^ and M]^ assume disposal method NT4
for new mills which is identical to method ET3 for existing piles except
that it requires the placement of a liner for groundwater protection
during the operational phase of the mill. Cases H£ and M2 assume
disposal method NT5 for new mills which calls, for disposal below-grade
with a three-meter earth cover and a liner. The major difference between
these four cases pertains to the treatment of future tailings at existing
mills. Cases H-^ and H£ assume that future tailings are added to
existing piles and then disposed in the same manner (ET3), while Cases
M]^ and M£ assume that existing mills will start new piles immediately
for their future tailings and dispose of them in the same manner required
for new mills (NT4 for M^^ and NTS for M£) . The regulatory requirement
which influences how future tailings at existing mills will be disposed
(i.e., starting new piles or adding to existing piles) is the groundwater
protection provision of the operations standard. This provision makes the
SWDA groundwater protection standards applicable to uranium mill
tailings. At this time, it is uncertain how the mills will comply with
this requirement as it will most likely necessitate a site-by-site
analysis by the regulatory agencies. We believe that the method of
disposal of future tailings at existing mills will probably be somewhere
between the extremes represented by these four impact cases.
Table 6.1 summarizes the cost and economic impacts of each of the
four economic impact cases. Based on these estimates, we conclude that
compliance with the proposed standards, assuming that other regulatory
requirements did not exist, would cost the uranium milling industry from
about 550 to 850 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 under baseline projection conditions. These costs are present
worth estimates (discounted at a 10 percent rate) expressed on a 1981
constant dollar basis. The range of industry disposal costs becomes 450
to 750 million dollars under low-growth projection conditions.
6-12
-------
Table 6.1. Summary of Economic Impacts of Proposed Standards
Impact Characteristics
Economic Impact Cases
i H2 Mj_ M2
Disposal Method^3)
Existing tailings
Future tailings, existing mills
Future tailings, new mills
ET3 ET3
ET3 ET3
NT4 NT5
ET3 ET3
NT4 NT5
NT4 NT5
Present Worth Cost (10 1981 dollars)
Baseline Demand, 10% rate
Baseline Demand, 0% rate
Low Growth Demand, 10% rate
Low Growth Demand, 0% rate
Mill Closures(b)
100% Cost Absorption, 20% Cash-flow margin
$l/lb Price Pass-Through, 20% Cash-flow margin
100% Cost Absorption, 25% Cash-flow margin
100% Cost Absorption, 15% Cash-flow margin
Uranium Price Increase (percents)'c^
530 549
1547 1627
440 452
1100 1149
793 834
2024 2146
708 744
1607 1701
0
0
0
1
0
0
0
1
1
0
0
5
1
0
0
5
Model
Model
existing
new mill
mill
with
lowest increase
2.
6.
4
6
2.
7.
4
1
7.
6.
6
6
8.0
7.1
= Above-grade, 3m of earth, rock cover on slopes.
NT4 = Above-grade, 3m of earth, rock cover on slopes, liner.
NT5 = Below-grade, 3m of earth, liner.
(^/Expressed in small mill equivalents.
^c'Increases in production cost due to tailings disposal, assuming a base
production cost of $30 per pound of
6-13
-------
We estimate that the average uranium price may increase from 2 to
8 percent. As explained in Chapter 5, this range in price inprease 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. Using our models, we estimate that if mills are forced to
absorb the entire cost of disposal, one small mill may cease operation
depending on the implementation of the groundwater protection
requirements. If mills can add tailings to their existing piles
indefinitely, we estimate that no mills will close (Cases E^ and H2).
If mills are required to start new piles immediately for their future
tailings, than one small model mill is estimated to close (Cases M^ and
M2). We further estimate that under the conditions of a more favorable
cash-flow or a limited price pass-through, this single mill closure would
be avoided. On the other hand, with no pass-through and a lower cash-flow,
two small model mills and a large model mill may close. (See Appendix A
for the complete tabulation of the mill closure results for the various
scenarios of price pass-through, cash'flow, and industry demand.)
Based on one small model mill closure, we estimate a direct employment
loss of about 70 mill employees and an indirect impact of an additional
85 jobs in the region. This total employment impact represents about
0.7 percent of the model region's work force. The total loss in payroll
for the region is estimated to be about 3 million dollars or 1.1 percent of
the area's payroll. These estimates assume that the mill closure is
permanent, although it is possible that the mill may close temporarily and
then reopen when market conditions improve.
We do not expect any macroeconomic impacts, including foreign trade,
to take place as a result of the proposed standards.
These costs and economic impacts are not incremental costs of the
proposed 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 (NRC) licensing regulations
and State regulations. 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
proposed standards.
6-14
-------
REFERENCES FOR CHAPTER 6
FRC60 Federal Radiation Council, "Report No. 1, Background Material for
the Development of Radiation Protection Standards," May 1960.
U.S.78 U.S. House of Representatives, "Report - Authorizing the
Secretary of Energy to Enter into Cooperative Agreements with
Certain States Respecting Radioactive Material at Existing Sites,
Providing for the Regulation of Uranium Mill Tailings under the
Atomic Energy Act of 1954, and for Other Purposes," 95th
Congress, Report 95-1480, August 1978.
NRC80 U.S. Nuclear Regulatory Commission, Final Generic Environmental
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
6-15
-------
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 1980 were
used in this analysis. There were 21 mills operating at this time with
tailings piles, plus piles existed at two other licensed mills which were
no longer in operation.
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 an in-depth 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 2700 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 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 mills to be analyzed. After examining the
characteristics of the 21 mills which were operating (as of January 1980)
and had existing tailings piles, we placed each of them in one of 15 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. These estimates, where possible, relied on information contained
in Corporate Annual Reports, Securities and Exchange Commission 10-K
Reports, or articles in trade journals. If estimates were not available
from the above sources, the estimated ore reserves for a particular mine
were divided by average production of its mill to yield an estimated
remaining life. If neither of the above means was available,
consideration was given to the start-up date for the mill.
A-2
-------
Table A.I. Generalized Matrix of Existing Mills'3'
>
Mill
Capacity Remaining
(MT ore/day) Life
900 5 years
10 years
15 years
1,800 5 years
10 years
15 years
2,700 5 years
10 years
15 years
Total Existing Mills
By Tailings Pile Size
Total
Tailings Pile Size (10 MT) Existing Mills
2 7 20 By Capacity
1 1
1
13 7
1
2 1
13 8
1
1
112 6
8 10 3 21
of January 1980. Excludes 2 licensed mills with 2 million MT tailings
piles that were no longer operating (Edgemont, South Dakota, and Ray Point,
Texas).
Source: Tables A.2, A.3, and A.4.
-------
>
Size
1,300
1,200
640
1,100
400
900
1,200
_900J1T_
Company
Table A. 2. Existing Mills by Capacity'3-'
(Metric Tons of Ore Per Day)
1,800 MT
Cotter
Union Carbide (Uravan)
Rio Algom
Atlas
Dawn
Federal-American
Union Carbide (Gas Hills)
7 Mills
Size
Company
1,500 Sohio-Reserve
2,200 Chevron
1,800 Western Nuclear (Wellpinit)
2,000 Pathfinder (Gas Hills)
1,800 Rocky Mtn.
1,500 Western Nuclear (Jeffrey City)
1,600 Pathfinder (Shirley Basin)
1,500 Petrotomics
8 Mills
2,700 MT
Size
Company
3,600
5,400
6,300
3,200
2,900
2,700
UNC (Church Rock)
Anaconda
Kerr-McGee
Homestake
Conoco
Exxon (Powder River)
6 Mills
As of January 1980.
longer operating.
Excludes mills at Edgemont, South Dakota, and Ray Point, Texas, that were no
Source: Table 2.10.
-------
Table A. 3. Existing Mills by Tailings Pile Si
(Millions of Metric Tons)
Tailings
Pile
Company
Tailings
Pile
Company
20
Tailings
Pile
Company
>
1.0
1.4
2.2
1.2
1.6
2.8
1.3
2.0
8 Mills
Cotter
Sohio-Reserve
UNC (Church Rock)
Chevron
Rio Algom
Dawn
Western Nuclear (Wellpinit)
Petrotomics
8.8 Union Carbide (Uravan)
5.6 Conoco
7.8 Atlas
4.2 Federal-American
5.5 Pathfinder (Gas Hills)
8.0 Rocky Mtn. Energy
5.7 Exxon (Powder River)
11.0 Western Nuclear (Jeffrey City)
7.6 Union Carbide (Gas Hills)
4.2 Pathfinder (Shirley Basin)
10 Mills
17.1 Anaconda
24.6 Kerr-McGee
17.9 Homestake
3 Mills
As of January 1980. Excludes two licensed mills with 2 million MT tailings piles at
Edgemont, South Dakota, and Ray Point, Texas, which were no longer operating.
Source: Table 2.10.
-------
Table A.4. Existing Mills by Estimated Remaining Life^3'
>
5 Years
10 Years
15 Years
Union Carbide (Gas Hills) Conoco
Cotter Corp.
Sohio-Reserve
Anaconda
Chevron
Western Nuclear (Wellpinit) UNC (Church Rock)
Dawn
Rocky Mountain Energy
Kerr-McGee
Homestake
Rio Algom
Atlas
Federal-American
Pathfinder (Gas Hills)
Exxon (Powder River)
Western Nuclear (Jeffrey City)
Union Carbide (Uravan)
Pathfinder (Shirley Basin)
Petrotomics
As of January 1980. Excludes licensed mills at Edgemont, South Dakota, and
Ray Point, Texas, which were no longer operating.
-------
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 EIS 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 C through H^. 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 I through N.
The unit cost assumed for cases C through H^ 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 I through N 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
20 million metric ton category. Therefore, no control costs are shown for
a 20 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 1981 Dollars)
Economic Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Tailings Pile Size
2 (106 MT)
-
-
-
-
3.9
3.9
3.8
3.8
12.8
6.9
6.9
7.6
11.9
-
3.9
3.8
12.8
6.9
6.9
7.6
11.9
12.3
7 (106 MT)
-
-
-
-
5.7
5.7
7.0
7.0
17.4
11.4
11.4
13.9
19.9
-
5.7
7.0
17.4
11.4
11.4
13.9
19.9
43.7
20 (106 MT)
-
-
-
-
11.1
11.1
14.4
14.4
32.5
22.3
22.3
29.2
40.6
-
11.1
14.4
32.5
22.3
22.3
29.2
40.6
126.9
A-8
-------
Table A.6. Cost to Control Future Tailings at Existing Mills
(Millions of 1981 Dollars)
>
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
"I
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Unit Cost
of Disposal
($/MT Tailings)
0.
0.
0.
0.
0.
0.
0.
0.
1.
0.
0.
1.
1.
4.
4.
3.
4.
3.
4.
4.
5.
4.
00
00
00
00
39
39
60
60
04
87
87
22
60
26
26
99
26
99
26
26
23
26
900 MT ore/day
1.2^"
5 Yrs
0.0
O.-O
0.0
0.0
0.5
0.5
0.7
0.7
1.3
1.0
1.0
1.5
1.9
5.1
5.1
4.8
5.1
4.8
5.1
5.1
6.3
5.1
2.7^
10 Yrs
0.0
0.0
0.0
0.0
1.0
1.0
1.6
1.6
2.8
2.3
2.3
3.3
4.3
11.4
11.4
10.7
11.4
10.7
11.4
11.4
14.0
11.4
4.1U)
15 Yrs
0.0
0.0
0.0
0.0
1.6
1.6
2.5
2.5
4.3
3.6
3.6
5.0
6.6
17.6
17.6
16.5
17.6
16.5
17.6
17.6
21.6
17.6
1,800 MT ore/day
2-4Ta5"
5 Yrs
0.0
0.0
0.0
0.0
0.9
0.9
1.5
1.5
2.5
2.1
2.1
2.9
3.8
10.3
10.3
9.6
10.3
9.6
10.3
10.3
12.6
10.3
5_3(aT
10 Yrs
0.0
0.0
0.0
0.0
2.1
2.1
3.2
3.2
5.6
4.6
4.6
6.5
8.5
22.8
22.8
21.3
22.8
21.3
22.8
22.8
27.9
22.8
8.2(a)
15 Yrs
0.0
0.0
0.0
0.0
3.2
3.2
5.0
5.0
8.6
7.2
7.2
10.1
13.2
35.2
35.2
32.9
35.2
32.9
35.2
35.2
43.1
35.2
2,700 MT ore
3.6^
5 Yrs
0.0
0.0
0.0
0.0
1.4
1.4
2.2
2.2
3.8
3.1
3.1
4.4
5.8
15.4
15.4
14.4
15.4
14.4
15.4
15.4
18.9
15.4
6.0<*>
10 Yrs
0.0
0.0
0.0
0.0
3.1
3.1
4.8
4.8
8.3
7.0
7.0
9.8
12.8
34.2
34.2
32.0
34.2
32.0
34.2
34.2
41.9
34.2
/day
7Y.7^
15 Yrs
0.0
0.0
0.0
0.0
4.8
4.8
7.5
7.5
12.9
10.8
10.8
15.1
19.8
52.7
52.7
49.4
52.7
49.4
52.7
52.7
64.7
52.7
(a'Future production of uranium (million MT of ore).
-------
Table A.7. Control Costs for a Model New Tailings Pile
(Millions of 1981 Dollars)
Regulatory
Option
A
B1
1
B0
2
BO
3
C
D
E
F
G
Hi
1
H_
2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Tailings Pile Size
8.4 (x 106 MT)
1.2
27.4
35.8
91.2
25.8
35.8
27.4
33.5
35.8
33.5
35.8
35.8
43.9
35.8
35.8
33.5
35.8
33.5
35.8
35.8
43.9
35.8
A-10
-------
Table A.8a. Total Disposal Cost for Small Model Existing Mill
(Existing Tails Plus New Tails, Millions of 1981 Dollars)
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.0
0.0
0.0
0.0
4.4
4.4
4.5
4.5
14.1
7.9
7.9
9.1
13.8
5.1
9.0
8.6
17.9
11.7
12.0
12.7
18.2
17.5
2(.)
10 Years
0.0
0.0
0.0
0.0
4.9
4.9
5.4
5.4
15.6
9.2
9.2
10.9
16.2
11.4
15.3
14.5
24.2
17.6
18.3
19.0
25.9
23.8
900 MT
15 Years
0.0
0.0
0.0
0.0
5.5
5.5
6.3
6.3
17.1
10.5
10.5
12.6
18.5
17.6
21.5
20.3
30.4
23.4
24.5
25.2
33.5
30.0
ore /day
5 Years
0.0
0.0
0.0
0.0
6.2
6.2
7-7
7.7
18.7
12.4
12.4
15.4
21.8
5.1
10.8
11.8
22.5
16.2
16.5
19.0
26.2
48.8
?(a)
10 Years
0.0
0.0
0.0
0.0
6.7
6.7
8.6
8.6
20.2
13.7
13.7
17.2
24.2
11.4
17.1
17.7
28.8
22.1
22.8
25.3
33.9
55.1
15 Years
0.0
0.0
0.0
0.0
7.3
7.3
9.5
9.5
21.7
15.0
15.0
18.9
26.5
17.6
23.3
23.5
35.0
27.9
29.0
31.5
41.5
61.3
of existing tailings pile, million MT.
A-ll
-------
Table A.8b. Total Disposal Cost for a Medium Model Existing Mill
(Existing Tails Plus New Tails, Millions of 1981 Dollars)
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.0
0.0
0.0
0.0
4.8
4.8
5.3
5.3
15.3
9.0
9.0
10.5
15.7
10.3
14.2
13.4
23.1
16.5
17.2
17.9
24.5
22.7
2(a)
10 Years
0.0
0.0
0.0
0.0
6.0
6.0
7.0
7.0
18.4
11.5
11.5
14.1
20.4
22.8
26.7
25.1
35.6
28.2
29.7
30.4
39.8
35.2
1,800 MT
15 Years
0.0
0.0
0.0
0.0
7.1
7.1
8.8
8.8
21.4
14.1
14.1
17.7
25.1
35.2
39.1
36.7
48.0
39.8
42.1
42.8
55.0
47.6
ore/day
5 Years
0.0
0.0
0.0
0.0
6.6
6.6
8.5
8.5
19.9
13.5
13.5
16.8
23.7
10.3
16.0
16.6
27.7
21.0
21.7
24.2
32.5
54.0
(a)
10 Years
0.0
0.0
0.0
0.0
7.8
7.8
10.2
10.2
23.0
16.0
16.0
20.4
28.4
22.8
28.5
28.3
40.2
32.7
34.2
36.7
47.8
66.5
15 Years
0.0
0.0
0.0
0.0
8.9
8.9
12.0
12.0
26.0
18.6
18.6
24.0
33.1
1 35.2
40.9
39.9
52.6
44.3
46.6
49.1
63,0
78.9
of existing tailings pile, million MT.
A-12
-------
Table A.8c. Total Disposal Cost for a Large Model Existing Mill
(Existing Tails Plus New Tails, Millions of 1981 Dollars)
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Yrs
0.0
0.0
0.0
0.0
5.3
5.3
6.0
6.0
16.6
10.0
10.0
12.0
17-7
15.4
19.3
18.2
28.2
21.3
22.3
23.0
30.8
27.8
2(a)
10 Yrs
0.0
0.0
0.0
0.0
7.0
7.0
8.6
8.6
21.1
13.9
13.9
17.4
24.7
34.2
38.1
35.8
47.0
38.9
41.1
41.8
53.8
46.6
2,700 MT ore/day
7(a)
15 Yrs
0.0
0.0
0.0
0.0
8.7
8.7
11.3
11.3
25.7
17.7
17.7
22.7
31.7
52.7
56.6
53.2
65.5
56.3
59.6
60.3
76.6
65.1
5 Yrs
0.0
0.0
0.0
0.0
7.1
7.1
9.2
9.2
21.2
14.5
14.5
18.3
25.7
15.4
21.1
21.4
32.8
25.8
26.8
29.3
38.8
59.1
10 Yrs
0.0
0.0
0.0
0.0
8.8
8.8
11.8
11.8
25.7
18.4
18.4
23.7
32.7
34.2
39.9
39.0
51.6
43.4
45.6
48.1
61.8
77.9
15 Yrs
0.0
0.0
0.0
0.0
10.5
10.5
14.5
14.5
30.3
22.2
22.2
29.0
39.7
52.7
58.4
56.4
70.1
60.8
64.1
66.6
84.6
96.4
5 Yrs
0.0
0.0
0.0
0.0
12.5
12.5
16.6
16.6
36.3
25.4
25.4
33.6
46.4
15.4
26.5
28.8
47.9
36.7
37.7
44.6
59.5
142.6
20(a)
10 Yrs
0.0
0.0
0.0
0.0
14.2
14.2
19.2
19.2
40.8
29.3
29.3
39.0
53.4
34.2
45.3
46.4
66.7
54.3
56.5
63.4
82.5
161.4
15 Yrs
0.0
0.0
0.0
0.0
15.9
15.9
21.9
21.9
45.4
33.1
33.1
44.3
60.4
52.7
63.8
63.8
85.2
71.7
75.0
81.9
105.3
179.9
of existing tailings pile, million MT.
A-13
-------
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. 9a 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.8a by the approximate number of metric tons of
future production as shown on Table A.9a. Table A.9b expresses this cost
increase in terms of dollars per pound of I^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 U^Og. Therefore, the
cost per metric ton of ore divided by two equals the cost per pound of
1)303. Finally, Table A.9c shows the percentage increase in production
cost assuming a base production cost of $30 per pound of 1)303. 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-14
-------
Table A.9a. Production Cost Increases for a Small Model Existing Mill,
^/Metric Ton of Ore
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
1.2(b)
5 Years
0.00
0.00
0.00
0.00
3.63
3.63
3.76
3.76
11.67
6.60
6.60
7.53
11.48
4.26
7.50
7.14
14.89
9.72
9.99
10.57
15.11
14.56
2(a)
2.7(b)
10 Years
0.00
0.00
0.00
0.00
1.85
1.85
2.03
2.03
5.83
3.45
3.45
4.06
6.05
4.26
5.72
5.41
9.05
6.57
6.84
7.11
9.68
8.90
4.1(b)
15 Years
0.00
0.00
0.00
0.00
1.33
1.33
1.53
1.53
4.1,4
2.54
2.54
3.06
4.48
4.26
5.21
4.91
7.36
5.66
5.93
6.10
8.11
7.27
1.2(b)
5 Years
0.00
0.00
0.00
0.00
5.12
5.12
6.42
6.42
15.49
10.33
10.33
12.76
18.12
4.26
8.99
9.80
18.71
13.45
13.73
15.80
21.75
40.54
/a)
2.7(b)
10 Years
0.00
0.00
0.00
0.00
2.52
2.52
3.22
3.22
7.55
5.13
5.13
6.42
9.04
4.26
6.39
6.61
10.77
8.25
8.53
9.46
12.67
20.61
4.1(b)
15 Years
0.00
0.00
0.00
0.00
1.77
1.77
2.30
2.30
5.26
3.63
3.63
4.59
6.42
4.26
5.64
5.69
8.48
6.75
7.03
7.63
10.05
14.86
of existing tailings pile, million MT.
(^Future production of uranium (million MT of ore).
A-15
-------
Table A.9b. Production Cost Increases for a Small Model Existing Mill,
$/Pound of 11303
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.00
0.00
0.00
0.00
1.81
1.81
1.88
1.88
5.83
3.30
3.30
3.76
5.74
2.13
3.75
3.57
7.44
4.86
5.00
5.29
7.55
7.28
2(a)
10 Years
0.00
0.00
0.00
0.00
0.92
0.92
1.01
1.01
2.91
1.73
1.73
2.03
3.02
2.13
2.86
2.70
4.53
3.28
3.42
3.55
4.84
4.45
15 Years
0.00
0.00
0.00
0.00
0.67
0.67
0.76
0.76
2.07
1.27
1.27
1.53
2.24
2.13
2.60
2.45
3.68
2.83
2.97
3.05
4.06
3.63
5 Years
0.00
0.00
0.00
0.00
2.56
2.56
3.21
3.21
7.74
5.17
5.17
6.38
9.06
2.13
4.50
4.90
9.35
6.73
6.86
7.90
10.87
20.27
?(a)
10 Years
0.00
0.00
0.00
0.00
1.26
1.26
1.61
1.61
3.78
2.57
2.57
3.21
4.52
2.13
3.20
3.30
5.39
4.13
4.26
4.73
6.34
10.31
15 Years
0.00
0.00
0.00
0.00
0.88
0,88
1.15
1.15
2.63
1.82
1.82
2.29
3.21
2.13
2.82
2.84
4.24
3.38
3.51
3.82
5.03
7.4
of existing tailings pile, million MT.
A-16
-------
Table A.9c. Production Cost Increases for a Small Model Existing Mill,
Percentage Increase^'
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.0
0.0
0.0
0.0
6.0
6.0
6.3
6.3
19.4
11.0
11.0
12.5
19.1
7.1
12.5
11.9
24.8
16.2
16.7
17.6
25.2
24.3
2(b)
10 Years
0.0
0.0
0.0
0.0
3.1
3.1
3.4
3.4
9.7
5.8
5.8
6.8
10.1
7.1
9.5
9.0
15.1
10.9
11.4
11.8
16.1
14.8
15 Years
0.0
0.0
0.0
0.0
2.2
2.2
2.5
2.5
6.9
4.2
4.2
5.1
7.5
7.1
8.7
8.2
12.3
9.4
9.9
10.2
13.5
12.1
5 Years
0.0
0.0
0.0
0.0
8.5
8.5
10.7
10.7
25.8
17.2
17.2
21.3
30.2
7.1
15.0
16.3
31.2
22.4
22.9
26.3
36.2
67.6
?(b)
10 Years
0.0
0.0
0.0
0.0
4.2
4.2
5.4
5.4
12.6
8.6
8.6
10.7
15.1
7.1
10.7
11.0
18.0
13.8
14.2
15.8
21.1
34.4
15 Years
0.0
0.0
0.0
0.0
2.9
2.9
3.8
3.8
8.8
6.1
6.1
7.6
10.7
7.1
9.4
9.5
14.1
11.3
11.7
12.7
16.8
24.8
a base production cost of $30 per pound of
of existing tailings pile, million MT.
A-17
-------
Table A.lOa. Production Cost Increases for a Medium Model Existing Mill,
$/Metric Ton of Ore
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
2.4(b)
5 Years
0.00
0.00
0.00
0.00
2.01
2.01
2.18
2.18
6.35
3.73
3.73
4.37
6.54
4.26
5.88
5.57
9.58
6.85
7.13
7.42
10.17
9.41
2(a)
5.3(b)
10 Years
0.00
0.00
0.00
0.00
1.12
1.12
1.32
1.32
3.44
2.16
2.16
2.64
3.82
4.26
4.99
4.70
6.66
5.28
5.55
5.68
7.45
6.58
8.2(b)
15 Years
0.00
0.00
0.00
0.00
0.86
0.86
1.07
1.07
2.59
1.71
1.71
2.14
3.04
4.26
4.73
4.45
5.81
4.82
5.10
5.18
6.67
5.76
5 Years
0.00
0.00
0.00
0.00
2.75
2.75
3.51
3.51
8.26
5.60
5.60
6.99
9.86
4.26
6.63
6.69
11.48
8.72
8.99
10.03
13.49
22.40
7(a)
5.3(b>
10 Years
0.00
0.00
0.00
0.00
1.45
1.45
1.91
1.91
4.30
3.00
3.00
3.82
5.32
4.26
5.33
5.30
7.52
6.12
6.39
6.86
8.95
12.44
8.2(b)
15 Years
0.00
0.00
0.00
0.00
1.08
1.08
1.45
1.45
3.15
2.25
2.25
2.90
4.01
4.26
4.95
4.84
6.37
5.37
5.64
5.95
7.64
9.56
'a'Size of existing tailings pile, million MT.
(b)
Future production of uranium (million MT of ore).
A-18
-------
Table A.lOb. Production Cost Increases for a Medium Model Existing Mill
$/Pound of
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M0
2
M3
M4
N
5 Years
0.00
0.00
0.00
0.00
1.00
1.00
1.09
1.09
3.18
1.87
1.87
2.19
3.27
2.13
2.94
2.78
4.79
3.43
3.56
3.71
5.08
4.70
2(a)
10 Years
0.00
0.00
0.00
0.00
0.56
0.56
0.66
0.66
1.72
1.08
1.08
1.32
1.91
2.13
2.50
2.35
3.33
2.64
2.78
2.84
3.73
3.29
15 Years
0.00
0.00
0.00
0.00
0.43
0.43
0.53
0.53
1.30
0.85
0.85
1.07
1.52
2.13
2.37
2.22
2.91
2.41
2.55
2.59
3.33
2.88
5 Years
0.00
0.00
0.00
0.00
1.38
1.38
1.76
1.76
4.13
2.80
2.80
3.49
4.93
2.13
3.31
3.45
5.74
4.36
4.50
5.02
6.74
11.20
?(a)
10 Years
0.00
0.00
0.00
0.00
0.73
0.73
0.96
0.96
2.15
1.50
1.50
1.91
2.66
2.13
2.66
2.65
3.76
3.06
3.20
3.43
4.47
6.22
15 Years
0.00
0.00
0.00
0.00
0.54
0.54
0.73
0.73
1.57
1.13
1.13
1.45
2.00
2.13
2.48
2.42
3.19
2.68
2.82
2.97
3.82
4.78
'a'Size of existing tailings pile, million MT.
A-19
-------
Table A.lOc. Production Cost Increases for a Medium Model Existing Mill,
Percentage Increase(a)
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.0
0.0
0.0
0.0
3.3
3.3
3.6
3.6
10.6
6.2
6.2
7.3
10.9
7.1
9.8
9.3
16.0
11.4
11.9
12.4
16.9
15.7
2(b)
10 Years
0.0
0.0
0.0
0.0
1.9
1.9
2.2
2.2
5.7
3.6
3.6
4.4
6.4
7.1
8.3
7.8
11.1
8.8
9.3
9.5
12.4
11.0
15 Years
0.0
0.0
0.0
0.0
1.4
1.4
1.8
1.8
4.3
2.8
2.8
3.6
5.1
7.1
7.9
7.4
9.7
8.0
8.5
8.6
11.1
9.6
5 Years
0.0
0.0
0.0
0.0
4.6
4.6
5.9
5.9
13.8
9.3
9.3
11.6
16.4
7.1
11.0
11.5
19.1
14.5
15.0
16.7
22.5
37.3
7a)
10 Years
0.0
0.0
0.0
0.0
2.4
2.4
3.2
3.2
7.2
5.0
5.0
6.4
8.9
7.1
8.9
8.8
12.5
10.2
10.7
11.4
14.9
20.7
15 Years
0.0
0.0
0.0
0.0
1.8
1.8
2.4
2.4
5.2
3.8
3.8
4.8
6.7
7.1
8.3
8.1
10.6
8.9
9.4
9.9
12.7
15.9
(^Assumes a base production cost of $30 per pound of
(b'Size of existing tailings pile, million MT.
A-20
-------
Table A.lla. Production Cost Increases for a Large Model Existing Mill,
it/Metric Ton of Ore
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hi
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.00
0.00
0.00
0.00
1.47
1.47
1.66
1.66
4.58
2.78
2.78
3.32
4.89
4.26
5.34
5.04
7.80
5.90
6.17
6.37
8.52
7.69
2(a)
8.0(b)
10 Years
0.00
0.00
0.00
0.00
0.87
0.87
1.08
1.08
2.64
1.73
1.73
2.17
3.08
4.26
4.75
4.46
5.86
4.85
5.12
5.21
6.71
5.81
12.4(b)
15 Years
0.00
0.00
0.00
0.00
0.70
0.70
0.91
0.91
2.08
1.43
1.43
1.83
2.56
4.26
4.58
4.30
5.30
4.55
4.82
4.88
6.19
5.26
3.6(b)
5 Years
0.00
0.00
0.00
0.00
1.97
1.97
2.54
2.54
5.86
4.02
4.02
5.07
7.10
4.26
5.84
5.93
9.08
7.14
7.42
8.11
10.73
16.36
?(a)
8.0(b)
10 Years
0.00
0.00
0.00
0.00
1.10
1.10
1.48
1.48
3.21
2.29
2.29
2.95
4.08
4.26
4.97
4.86
6.43
5.41
5.68
6.00
7.71
9.71
12.4
15 Years
0.00
0.00
0.00
0.00
0.85
0.85
1.17
1.17
2.45
1.79
1.79
2.34
3.20
4.26
4.72
4.55
5.67
4.91
5.18
5.39
6.83
7.79
3.6(b)
5 Years
0.00
0.00
0.00
0.00
3.46
3.46
4.59
4.59
10.03
7.04
7.04
9.30
12.83
4.26
7.33
7.97
13.26
10.16
10.43
12.34
16.46
39.46
20(3)
8.0(b)
10 Years
0.00
0.00
0.00
0.00
1.77
1.77
2.40
2.40
5.09
3.65
3.65
4.86
6.66
4.26
5.65
5.78
8.31
6.77
7.04
7.90
10.29
20.12
12.4(b)
15 Years
0.00
0.00
0.00
0.00
1.28
1.28
1.77
1.77
3.67
2.67
2.67
3.58
4.88
4.26
5.16
5.15
6.89
5.79
6.06
6.62
8.51
14.54
of existing tailings pile, million MT.
(^'Future production of uranium (million MT of ore).
-------
Table A.lib.
Production Cost Increases for a Large Model Existing Mill,
$/Pound of U308
N3
to
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.00
0.00
0.00
0.00
0.73
0.73
0.83
0.83
2.29
1.39
1.39
1.66
2.44
2.13
2.67
2.52
3.90
2.95
3.09
3.18
4.26
3.85
2(a)
10 Years
0.00
0.00
0.00
0.00
0.44
0.44
0.54
0.54
1.32
0.86
0.86
1.08
1.54
2.13
2.37
2.23
2.93
2.42
2.56
2.60
3.36
2.90
15 Years
0.00
0.00
0.00
0.00
0.35
0.35
0.46
0.46
1.04
0.71
0.71
0.92
1.28
2.13
2.29
2.15
2.65
2.27
2.41
2.44
3.09
2.63
5 Years
0.00
0.00
0.00
0.00
0.98
0.98
1.27
1.27
2.93
2.01
2.01
2.53
3.55
2.13
2.92
2.96
4.54
3.57
3.71
4.05
5.37
8.18
/a)
10 Years
0.00
0.00
0.00
0.00
0.55
0.55
0.74
0.74
1.61
1.15
1.15
1.48
2.04
2.13
2.49
2.43
3.22
2.70
2.84
4.00
3.85
4.86
15 Years
0.00
0.00
0.00
0.00
0.42
0.42
0.59
0.59
1.22
0.90
0.90
1.17
1.60
2.13
2.36
2.28
2.83
2.45
2.59
2.69
3.42
3.90
5 Years
0.00
0.00
0.00
0.00
1.73
1.73
2.29
2.29
5.02
3.52
3.52
4.65
6.42
2.13
3.67
3.99
6.63
5.08
5.22
6.17
8.23
19.73
20(a)
10 Years
0.00
0.00
0.00
0.00
0.89
0.89
1.20
1.20
2.55
1.83
1.83
2.43
3.33
2.13
2.82
2.89
4.16
3.38
3.52
3.95
5.14
10.06
15 Years
0.00
0.00
0.00
0.00
0.64
0.64
0.88
0.88
1.83
1.34
1.34
1.79
2.44
2.13
2.58
2.58
3.44
2.90
3.03
3.31
4.25
7.27
'a'Size of existing tailings pile, million MT.
-------
Table A.lie.
Production Cost Increases for a Large Model Existing Mill,
Percentage Increase'3'
i
M
to
Economic
Imp act
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
0.0
0.0
0.0
0.0
2.4
2.4
2.8
2.8
7.6
4.6
4.6
5.5
8.1
7.1
8.9
8.4
13.0
9.8
10.3
10.6
14.2
12.8
2(b)
10 Years
0.0
0.0
0.0
0.0
1.5
1.5
1.8
1.8
4.4
2.9
2.9
3.6
5.1
7.1
7.9
7.4
9.8
8.1
8.5
8.7
11.2
9.7
15 Years
0.0
0.0
0.0
0.0
1.2
1.2
1.5
1.5
3.5
2.4
2.4
3.1
4.3
7.1
7.6
7.2
8.8
7.6
8.0
8.1
10.3
8.8
5 Years
0.0
0.0
0.0
0.0
3.3
3.3
4.2
4.2
9.8
6.7
6.7
8.4
11.8
7.1
9.7
9.9
15.1
11.9
12.4
13.5
17.9
27.3
7
10 Years
0.0
0.0
0.0
0.0
1.8
1.8
2.5
2.5
5.4
3.8
3.8
4.9
6.8
7.1
8.3
8.1
10.7
9.0
9.5
10.0
12.8
16.2
15 Years
0.0
0.0
0.0
0.0
1.4
1.4
2.0
2.0
4.1
3.0
3.0
3.9
5.3
7.1
7.9
7.6
9.4
8.2
8.6
9.0
11.4
13.0
5 Years
0.0
0.0
0.0
0.0
5.8
5.8
7.6
7.6
16.7
11.7
11.7
15.5
21.4
7.1
12.2
13.3
22.1
16.9
17.4
20.6
27.4
65.8
20(b)
10 Years
0.0
0.0
0.0
0.0
3.0
3.0
4.0
4.0
8.5
6.1
6.1
8.1
11.1
7.1
9.4
9.6
13.9
11.3
11.7
13.2
17.1
33.5
15 Years
0.0
0.0
0.0
0.0
2.1
2.1
2.9
2.9
6.1
4.5
4.5
6.0
8.1
7.1
8.6
8.6
11.5
9.7
10.1
11.0
14.2
24.2
^a'Assumes a base production cost of $30 per pound of
of existing tailings pile, million MT.
-------
Table A.12. Production Cost Increases for a Model New Mill
Economic
Impact
Case
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
$ /Metric Ton of Ore
0.14
3.26
4.26
10.86
3.07
4.26
3.26
3.99
4.26
3.99
4.26
4.26
5.23
4.26
4.26
3.99
4.26
3.99
4.26
4.26
5.23
4.26
$/Pound of U30g
0.07
1.63
2.13
5.43
1.54
2.13
1.63
1.99
2.13
1.99
2.13
2.13
2.61
2.13
2.13
1.99
2.13
1.99
2.13
2.13
2.61
2.13
Percentage
Increase in
Production Cost'3'
0.2
5.4
7.1
18.1
5.1
7.1
5.4
6.6
7.1
6.6
7.1
7.1
8.7
7.1
7.1
6.6
7.1
6.6
7.1
7.1
8.7
7.1
(^Assumes a base production cost of $30 per pound of 1)303.
A-24
-------
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-25
-------
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-26
-------
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
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
A-27
-------
Table A.14. Discounted Cash Flow Analysis
(Dollars in Thousands)
00
Financing: 100% Equity
Year
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Revenue
Cost
Depreciation
Interest
Control O&M Cost
Control Depreciation
Control Interest
Earnings Before Tax
Depletion
Tax Liability
Investment Tax Credit
Control Investment
Tax Credit
Minimum Tax
Total Tax Due
Earnings After Tax
Depreciation
Control Depreciation
Depletion
Cash Flow Before
Deduction
Principal Payments
Control Principal
Payments
Sustaining Capital
Expenditures
Net Cash Flow
Discount Factor
Discounted Net
Cash Flow
1
1,000
700
100
0
0
0
0
200
0
100
50
0
0
50
150
100
0
0
250
0
0
0
250
.909
227.3
2
1,000
700
100
0
0
0
0
200
0
100
50
0
0
50
150
100
0
0
250
0
0
0
250
.826
206.5
3
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.751
150.2
4
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.683
136.6
5
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.621
124.2
6
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.564
112.8
7
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.513
102.6
8
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.467
93.4
9
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.424
84.8
10
1,000
700
100
0
0
0
0
200
0
100
0
0
0
100
100
100
0
0
200
0
0
0
200
.386
77.2
Present Value of Cash Flows 1,315.6
Original Investment - 1,000.0
Net Present Value + 315.6
-------
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 M2- The first step in determining
the cash flow is to project the annual quantity 'of l^Og 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 U-jOg
(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 85 percent for
1980 (year 1), 65 percent for 1981-82, 70 percent for 1983, 80 percent for
1984, 85 percent for 1985, 90 percent for 1982-92, and 85 percent for
1993-94 (year 15). An alternative utilization rate - a constant
85 percent - was also considered, but the varying rate was adopted in
order to be conservative and consistent with the industry average rates
used in Appendix B.
The forecast of uranium price (line 2) was derived from DOE data
sources and is explained in Chapter 2 and 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-29
-------
Table A.15. Discounted Cash Flow Analysis - CASE M2
Small Mill, 7 Million MT Pile, 5 Years Remaining
(1981 Dollars)
u>
o
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
U-jOg Production (Million Ibs.)
U308 Price ($/lb)
Price Pass-through ($/lb)
Revenue (Million $)
Cash Flow Margin
Cash Inflow (Million $)
Control Costs-Existing Tailings (Million $)
Control Costs-New Tailings (Million $)
Net Cash Flow (Million $)
Discount Factor
Discounted Net Cash Flow (Million $)
1
0.56
29.31
0.00
16.4
0.20
3.29
2.28
1.17
-0.16
.9091
-0.14
2
0.43
30.69
0.00
13.2
0.20
2.63
2.28
0.89
-0.54
.8265
-0.45
YEAR
3
0.43
32.07
0.00
13.8
0.20
2.75
2.28
0.89
-0.42
.7513
-0.32
4
0.46
33.45
0.00
15.5
0.20
3.09
2.28
0.96
-0.15
.6830
-0.10
5
0.53
34.83
0.00
18.4
0.20
3.68
2.28
1.10
0.30
.6209
0.19
12. Net Present Value (Million $) = -0.82
-------
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 profLt 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
11303) 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-31
-------
Table A.16. Financial Information for Selected Companies
in the Uranium Industry
($ in Thousands)
Year
Revenues 1976
1977
1978
1979
1980
Operating 1976
Profit 1977
1978
1979
1980
Assets 1976
1977
1978
1979
1980
Depreciation 1976
Depletion 1977
1978
1979
1980
Capital 1976
Expend. 1977
1978
1979
1980
Atlas
15,611
28,152
26,845
38,253
60,148
4,607
8,027
(1,925)
(2,159)
6,142
NA
NA
56,375
79,428
72,834
NA
NA
3,331
4,058
6,212
NA
NA
14,579
21,870
7,453
Conoco
NA
NA
16,488
16,384
34,586
NA
NA
(20,815)
(21,530)
(30,719)
NA
NA
52,491
61,218
62,867
NA
NA
2,876
3,209
3,957
NA
NA
7,213
6,937
7,999
Home stake
22,441
59,141
44,928
42,388
45,363
10,389
24,622
20,454
14,097
(601) 30,000
215,300
236,500
272,000
288,400
304,800
7,500
9,300
13,800
15,600
21,300
NA
NA
NA
NA
NA
Pioneer
NA
NA
13,810
20,267
7,829
NA
NA
1,257
(1,004)
(1,082)
NA
NA
51,119
70,583
84,046
NA
NA
8,679
11,253
8,718
NA
NA
19,467
23,513
17,567
UNC
29,339
80,816
133,193
181,626
167,811
7,103
28,539
42,320
61,339
12,243
87,222
145,376
203,041
279,436
239,888
1,070
1,952
5,414
9,677
11,952
27,856
54,499
49,518
39,156
46,662
NA = Not Available.
^Includes an $8,075 loss on settlement of uranium litigation, would
otherwise have been (8,075)-601 = +$7,474.
A-32
-------
Table A.17. Financial Ratios for Selected Companies
in the Uranium Industry
(Percents)
Operating
Profit/
Revenue
Operating
Profit/
Assets
Depreciation
Depletion/
Revenues
Capital
Expenditure/
Revenue
Year
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
1976
1977
1978
1979
1980
Atlas
29.5
28.5
-
-
10.2
NA
NA
-
-
8.4
NA
NA
12.4
10.6
10.3
NA
NA
54.3
57.2
12.4
Conoco
NA
NA
-
-
-
NA
NA
-
-
-
NA
NA
17.4
19.6
11.4
NA
NA
43.7
42.3
23.1
Home stake
46.3
41.6
45.5
33.3
16.5(3)
73.4
54.7
47.6
29.5
13.6°>)
1.8
.3
.04
15.4
9.1
4.4
17.7
20.1
27.6
Kerr-McGee
33.8
18.1
17.4
-
12.6
15.2
9.4
7.4
-
9.8
7.7
7.5
12.0
9.5
8.9
NA
NA
NA
NA
NA
Pioneer
NA
NA
9.1
-
-
NA
NA
2.5
-
-
NA
NA
62.8
55.5
111.0
NA
NA
141.0
116.0
224.0
UNC
24.2
35.3
31.8
33.8
7.3
8.1
19.6
20.8
22.0
5.1
3.6
2.4
4.1
5.3
7.1
95.0
67.4
37.2
21.6
27.8
NA = Not Available.
- = Loss Year.
(aH6.5% without litigation.
3.6% without litigation.
A-33
-------
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.
Tables A.18a, A.18b, and A.18c present the estimated net present
values for all 22 economic impact cases and each model mill, for the
baseline industry demand scenario (each demand scenario has a different
uranium price forecast which yields different cash flow estimates).
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 under the baseline industry demand scenario 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 three small mills.
Thus, the total of 21 mills in the industry can be converted to the
equivalent of 41 small mills [(7 small mills x 1) + (8 medium mills x 2) +
(6 large mills x 3) = 41 small mill equivalents].
Economic Model Mill Equivalent Number
Impact Case Closures of Small Mills
A, B, C, D, E, F No Closures 0
Hl5 H2, I, J, K
H3, M]_, M2, M3 1 Small 1
G 2 Small 2
H4 1 Small, 1 Large 4
L, M4 2 Small, 1 Large 5
N 5 Small, 1 Medium, 3 Large 16
A. 8 Sensitivity__Ana_ly_s_is
To supplement the above closure results, a sensitivity analysis was
performed which varied three parameters: the cash flow margin, the demand
scenario, 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. Two industry demand scenarios are presented for each
cash flow margin: a baseline industry demand scenario and a low growth
industry demand scenario. The low growth industry demand scenario
A-34
-------
Table A.18a. Net Present Value for a Small Model Existing Mill
Baseline Industry Demand Scenario
(millions of 1981 dollars)
Economic
Impact
Case
Number
of Mills
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
1
11.63
11.63
11.63
11.63
8.33
8.33
8.21
8.21
0.99
5.62
5.62
4.78
1.18
7.82
4.87
5.19
-1.88
2.84
2.59
2.06
-2.06
-1.58
2(a)
10 Years
1
22.31
22.31
22.31
22.31
18.75
18.75
18.49
18.49
10.98
15.72
15.72
14.64
10.79
15.64
12.68
13.19
5.94
10.84
10.41
9.88
5.11
6.24
900 MT ore/day
15 Years
1
30.07
30.07
30.07
30.07
26.34
26.34
25.99
25.99
18.30
23.12
23.12
21.89
17.89
21.63
18.67
19.29
11.92
16.94
16.40
15.86
10.69
12.23
5 Years
1
11.63
11.63
11.63
11.63
6.96
6.96
5.78
5.78
-2.49
2.21
2.21
0.00
-4.88
7.82
3.50
2.76
-5.37
-0.58
-0.82
-2.72
-8.13
-25.31
10 Years
0
22.31
22.31
22.31
22.31
17.39
17.39
16.06
16.06
7.49
12.31
12.31
9.87
4.73
15.64
11.32
10.76
2.45
7.43
7.00
5.10
-0.96
-17.49
15 Years
3
30.07
30.07
30.07
30.07
24.98
24.98
23.56
23.56
14.82
19.70
19.70
17.12
11.82
21.63
17.30
16.86
8.43
13.53
12.98
11.09
4.63
-11.51
(a'Size of existing tailings pile, million MT.
A-35
-------
Table A.18b. Net Present Value for a Medium Model Existing Mill
Baseline Industry Demand Scenario
(millions of 1981 dollars)
Economic
Impact
Case
Number
of Mills
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
5 Years
1
23.26
23.26
23.26
23.26
19.61
19.61
19.30
19.30
11.69
16.47
16.47
15.32
11.38
15.65
12.69
13.25
5.94
10.90
10.41
9.88
4.90
6.24
2(a)
10 Years
1
44.63
44.63
44.63
44.63
40.46
40.46
39.85
39.85
31.66
36.67
36.67
35.05
30.61
31.28
28.32
29.26
21.58
26.91
26.05
25.52
19.24
21.88
1,800 MT
15 Years
2
60.14
60.14
60.14
60.14
55.65
55.65
54.86
54.86
46.31
51.46
51.46
49.55
44.79
43.25
40.30
41.46
33.55
39.11
38.02
37.49
30.41
33.85
ore/day
5 Years
0
23.26
23.26
23.26
23.26
18.24
18.24
16.87
16.87
8.21
13.06
13.06
10.54
5.32
15.65
11.32
10.83
2.45
7.49
7.00
5.11
-1.16
-17.49
(a)
10 Years
1
44.63
44.63
44.63
44.63
39.09
39.09
37.43
37.43
28.18
33.26
33.26
30.27
24.54
31.28
26.96
26.83
18.09
23.50
22.64
20.74
13.17
-1.85
15 Years
3
60.14
60.14
60.14
60.14
54.28
54.28
52.44
52.44
42.82
48.05
48.05
44.77
38.73
43.25
38.93
39.03
30.06
35.69
34.61
32.71
24.34
10.12
of existing tailings pile, million MT.
A-36
-------
Table A.18c. Net Present Value for a Large Model Existing Mill
Baseline Industry Demand Scenario
(millions of 1981 dollars)
Economic
Impact
Case
Number
of Mills
A
Bl
B2
B3
C
D
E
F
G
Hl
H2
H3
H4
I
J
K
L
Ml
M2
M3
\
N
2(a)
5 Yrs 10 Yrs
0
34.88
34.88
34.88
34.88
30.89
30.89
30.38
30.38
22.39
27.32
27.32
25.86
21.59
23.47
20.51
21.32
13.76
18.97
18.24
17.71
11.86
14.07
0
66.94
66.94
66.94
66.94
62.16
62.16
61.22
61.22
52.35
57.63
57.63
55.46
50.42
46.92
43.97
45.33
37.22
42.98
41.69
41.16
33.37
37.52
15 Yrs
1
90.
90.
90.
90.
84.
84.
83.
83.
74.
79.
79.
77.
71.
64.
61.
63.
55.
61.
59.
59.
50.
55.
21
21
21
21
95
95
74
74
32
81
81
21
70
88
92
63
17
28
65
12
13
48
2,700
MT ore /day
?(a)
5 Yrs 10 Yrs
0
34.88
34.88
34.88
34.88
29.52
29.52
27.96
27.96
18.90
23.91
23.91
21.08
15.52
23.47
19.15
18.89
10.28
15.56
14.83
12.93
5.80
-9.66
1
66.94
66.94
66.94
66.94
60.80
60.80
58.79
58.79
48.86
54.22
54.22
50.68
44.36
46.92
42.60
42.90
33.73
39.57
38.28
36.38
27.31
13.79
15 Yrs
1
90.21
90.21
90.21
90.21
83.58
83.58
81.31
81.31
70.83
76.40
76.40
72.43
65.64
64.88
60.56
61.20
51.69
57.86
56.24
54.34
44.06
31.75
5 Yrs
1
34.
34.
34.
34.
25.
25.
22.
22.
7.
15.
15.
9.
-0.
23.
15.
13.
-1.
7.
6.
1.
-9.
-72.
88
88
88
88
43
43
35
35
46
65
65
48
17
47
05
28
17
30
56
33
90
97
20(a)
10 Yrs
0
66.94
66.94
66.94
66.94
56.70
56.70
53.18
53.18
37.41
45.95
45.95
39.08
28.66
46.92
38.51
37.29
22.28
31.30
30.01
24.78
11.61
-49.52
15 Yrs
2
90.21
90.21
90.21
90.21
79.49
79.49
75.70
75.70
59.38
68.14
68.14
60.83
49.94
64.88
56.46
55.59
40.24
49.60
47.97
42.74
28.37
-31.56
of existing tailings pile, million MT.
A-37
-------
includes prices that are lower and, consequently, cash flows that are
lower than the baseline. Finally, the assumption of complete cost
absorption by the model mills is varied.
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 1)303 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 18 different scenarios which have been
analyzed (2 demand projections x 3 cash flow margins x 3 cost
absorption/pass-through assumptions). Since there are 22 economic impact
cases, this yields 396 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.
Demand Projections
There is virtually no difference in mill closures associated with the
different demand projections. Of the 198 estimations (22 impact cases x
3 cash flow margins x 3 cost absorption/pass-through assumptions)
calculated for each demand projecton, only 2 show different results. For
Case M4 with a $1 cost pass-through and a 15 percent cash flow margin,
the baseline demand results in 5 small mill equivalent closures, while
there are 8 for the low-growth projection. Case N results in 7 small mill
closures for •$! cost pass-through and 25 percent cash flow margin under
the baseline demand projection, while there are 13 small mill closures for
the low-growth demand. All the other cases result in the same number of
closures for the baseline demand as they do for the low-growth demand.
The reason that the closure analysis is insensitive to the demand
projection is that the price forecast for each projection is the same for
1980 through 1987, or the first eight years of the mill closure analysis
(see Appendix B for a discussion of the price forecast for each demand
projection). Consequently, there is no difference in the cash flows for
model mills with a five-year remaining lifetime. Mills with a ten-year
lifetime will have different cash flows only in years 9 and 10, while
mills with a 15-year lifetime will have different cash flows for years 9
through 15. Since the cash flows are discounted, the few years in which
they may be different due to the demand projection receive the least
weight in determining the net present value of the cash flows. With the
same or similar cash flow, the mill's decision to continue operating is
basically unaffected by the demand projection.
A-38
-------
Table A. 19. Summary of Model Mill Closure
Cost Absorption
Impact
Case
A
B,
1
B2
B3
C
D
E
F
> G
1
"-0 u
VD n.
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
Baseline
25%
-
_
—
-
0
0
0
0
1
0
0
0
1
0
0
0
1
0
0
1
5
13
20%
-
__
—
—
0
0
0
0
2
0
0
1
4
0
0
0
5
1
1
1
5
16
15%
-
_
-
-
0
0
0
0
5
1
1
4
5
0
1
1
11
5
5
5
11
28
Low Growth
25%
-
_
-
-
0
0
0
0
1
0
0
0
1
0
0
0
1
0
0
1
5
13
20%
-
_
-
-
0
0
0
0
2
0
0
1
4
0
0
0
5
1
1
1
5
16
15%
-
_
-
-
0
0
0
0
5
1
1
4
5
0
1
1
11
5
5
5
11
28
$1 Price Increase (Cost Pass-Through)
Baseline
25%
-
-
-
0
•o
0
0
0
0
0
0
1
0
0
0
1
0
0
0
1
7
20%
-
—
-
-
0
0
0
0
1
0
0
0
1
0
0
0
2
0
0
1
5
14
15%
-
_
-
-
0
0
0
0
2
0
0
1
5
0
0
0
5
1
1
5
5
16
Low Growth
25%
-
_
-
-
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
1
13
20%
-
_
-
-
0
0
0
0
1
0
0
0
1
0
0
0
2
0
0
1
5
14
15%
-
—
-
-
0
0
0
0
2
0
0
1
5
0
0
0
5
1
1
5
8
16
$2 Price Increase
Baseline
25%
-
_
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
4
20%
-
_
-
-
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
1
1
13
15%
-
_
—
-
0
0
0
0
1
0
0
1
1
0
0
0
2
1
1
1
5
16
(Cost Pass-through)
Low Growth
25%
-
_
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
4
20%
-
_
-
-
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
1
1
13
15%
-
_
-
-
0
0
0
0
1
0
0
1
1
0
0
0
2
1
1
1
5
16
^'Expressed in terras of small mill equivalents.
-------
Cash Flow Margin
Selection of the cash flow margin has a noticeable impact on the mill
closure analysis. For the cost absorption scenario, almost all the impact
cases which show mill closures -for a 20 percent cash flow margin have
fewer closures with a 25 percent margin and more closures with a
15 percent margin. Four of the impact cases which have no closures under
a 20 percent margin have one closure with a 15 percent margin.
Cost Absorption/Pass-Through Assumptions
The cost absorption/pass-through assumption also influences the mill
closure analysis. Under the conditions of baseline demand and 20 percent
cash flow margin, all but two of the impact cases which indicate closures
with the cost absorption asumption have fewer closures with a $1 per pound
pass-through. A $2 per pound pass-through reduces the closures even
further for most cases.
A-40
-------
REFERENCES FOR APPENDIX A
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-41
-------
APPENDIX B
PROJECTIONS OF PRICE, DEMAND, PRODUCTION
-------
Appendijt _B
£ro j_ec_t_ions of_ Price, Demand, Production
B.I Introduction
The purpose of this appendix is to present the projections of the
demand, price, and production of uranium for the years 1980 through 2000.
The principal use of uranium is for generating electricity at nuclear
power plants. Therefore, the demand for uranium is directly dependent on
the total demand for electricity in general, and in particular, the demand
for electricity generated by nuclear power.
B.2 Price and Demand
B.2.1 Baseline Industry Demand Scenario
Table B.I presents projections of the demand for nuclear reactor
generating capacity, the total amount of uranium that will be required to
meet that generating capacity, the amount of uranium that will be provided
by conventional mills, and the price of uranium. The projections of
nuclear generating capacity and the price of uranium are both
U.S. Department of Energy estimates based on their mid-range nuclear
generating capacity scenario (DOE80). We refer to this scenario as the
baseline industry demand scenario.
The assumptions underlying the projections for DOE's mid-range
scenario are outlined in the DOE/EIA 1980 Annual Report to Congress and
are summarized below. These assumptions reflect:
o A clear indication of increased demand for new electric
generating capacity;
o A major reassessment of utility financial practices and utility
rate structures to relieve debt-equity and cash-flow burdens of
new nuclear construction;
o A resolution of uncertainties surrounding nuclear deployment,
including the predictability of the licensing process, nuclear
safety regulations, reactor siting, and long-term uranium
availability;
o A resolution of the nuclear waste disposal problem, particularly
the construction of a Federal repository for the long-term
disposition of highly radioactive wastes.
B-l
-------
Table B.I. Projections of Uranium Demand and Price,
Baseline Industry Demand Scenario
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Reactor
Capacity3
(GWe)
54.0
60.7
68.2
76.7
86.2
96.0
101.6
107.5
113.7
120.3
128.0
131.2
134.5
137.8
141 . 3
145.0
150.7
156.5
162.6
169.0
175.0
Uranium
Requirements
(103 MT U308)
14.2
15.9
17.8
18.8
19.9
21.0
22.3
23.7
24.3
24.9
25.5
26.1
26.8
27.9
29.0
30.1
31.3
32.4
33.6
34.9
36.2
Conventional
Shareb
.884
.856
.835
.816
.805
.790
.776
.758
.737
.719
.714
.716
.717
.728
.738
.747
.752
.760
.767
.775
.784
Conventional
Demand
(103 MT U308)
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4
22.5
23.5
24.6
25.8
27.0
28.4
Uranium
Price0
(i/lb U308)
29.31
30.69
32.07
33.45
34.83
36.20
37.58
38.96
40.33
41.72
43.09
44.47
45.85
47.22
48.61
49.98
51.35
52.74
54.11
55.50
56.87
aLinear interpolation estimates from an incomplete data series.
"Ratio of conventional milling to total milling.
GLinear regression estimates for an incomplete data series. The ordinary
least squares equation used for estimation is: Price = - 2515 + 1.284 (Year)
Prices were updated to 1981 using the Marshall & Swift equipment cost index
for mining, milling (1979 to 1981 = 17.7%).
B-2
-------
These general assumptions are quantified as follows:
o 154 nuclear power generating plants (or 145 GWe capacity) will
be on line by 1995;
o The growth rate of electricity demand will approximate the
estimated 2.5 percent growth in GNP for the period from 1980 to
2000.
This estimate is further broken down into the following time
periods:
1978 - 1985 2.8%
1985 - 1995 3.3%
1995 - 2020 2.0%
Nuclear energy is projected to generate 26 percent of
electricity produced in the year 2000.
the
The price projections are estimated by the EUREKA Model which was
designed specifically for modeling the price and supply of uranium
(Ro81). The forecast represents an average of spot market and contract
uranium prices. The price projections are "full recovery cost" estimates
which are derived from the total costs associated with the recovery of
known uranium reserves. These costs include production costs, sunk costs,
taxes, and return on investment. The latter three costs distinguish the
"full recovery cost" estimates from other types of forward cost estimates.
Converting the demand for generating capacity into uranium
requirements is based on the assumptions used in the NRC Generic
Environmental Impact Statement on uranium milling (NRC80):
"Conversion from GWe to uranium requirements is based on an
average of 185 MT 11363 in yellowcake required per GWe-year.
This is the factor'for 3.0% reload enrichment, 0.20% enrichment
tails, and an effective average plant capacity factor of 75%.
A three-year delay between yellowcake production and fuel
utilization is assumed."
Not all uranium is produced by conventional mills. In 1979,
88 percent of total uranium production was produced by conventional
mills. The remaining 12 percent was produced by in-situ mining,
phosphoric acid by-product operations, and heap leaching. Because this
analysis is only concerned with conventional milling, it is therefore
necessary to estimate the amount of uranium that will be produced by
conventional milling versus unconventional milling. We used the projected
ratio of conventional milling to total milling which was assumed in the
NRC GEIS (NRC80). We estimated the demand for conventional milling
production by multiplying the total uranium requirements by the
conventional milling ratio.
B-3
-------
Over the entire forecast period, the demand for uranium produced at
conventional mills more than doubles from its 1980 level of 12,500 MX to
28,400 MT by the year 2000. The price of uranium is also projected to
increase significantly from its 1980 level of $29.31 per pound of
yellowcake to $56.87 per pound in the year 2000.
B.2.2 Low Growth Industry Demand Scenario
In addition to the baseline industry demand scenario, we studied a
second case which requires a significantly lower level of production at
conventional uranium mills. This case, identified as the low-growth
industry demand scenario, represents either a large reduction in the
growth of installed reactor capacity or a heavy reliance on imported
uranium. A very low projection of installed reactor capacity (DOE's firm
nuclear base scenario) was used to develop this industry demand
projection. Table B.2 presents the forecast of reactor capacity and the
derived demand for uranium. The projections of uranium demand, both total
and for conventional mills, were derived in the same manner as in the
baseline scenario.
The assumptions upon which this reactor capacity forecast is based
are also outlined in the DOE/EIA 1980 Annual Report to Congress (DOE80).
This scenario assumes that:
o Light-water reactors will be phased out after a 30-year
operating life;
o Only nuclear units currently under construction and at least
10 percent complete will be allowed to complete construction and
enter service.
Because a yellowcake price forecast is unavailable from DOE/EIA for
this scenario, we have developed our own. Conventional demand for the
period 1980 to 1987 does not change significantly compared to those values
appearing in Table B.I, so that the price for this period can also be
assumed to remain the same. For the 1988 to 2000 period, estimates were
calculated using a simple regression technique relating price to total
demand.
For the low-growth scenario, the demand for conventionally milled
uranium peaks in 1987 at 17,100 MT and then declines to 14,800 tons by the
year 2000. The rebound in the price of uranium is much less than that
projected for the baseline demand scenario. The price increases from
$29.31 per pound of l^Og in 1980 to a peak price of $39.75 per pound
in 1992. The real uranium price decreases to $34.04 by the year 2000.
These projections for the year 2000 compare to projections of 28,400 MT of
1)303 and $56.87 per pound under the baseline industry demand scenario.
B-4
-------
Table B.2. Projections of Uranium Demand and Price,
Low Growth Industry Demand Scenario
Year
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Reactor
Capacity3
(GWe)
54.0
60.7
68.2
76.7
86.2
96.0
100.8
105.8
111.1
116.7
122.0
122.6
123.2
123.8
124.5
125.0
124.0
123.0
122.0
121.0
120.0
Uranium
Re qu i r emen t s
(103 MT U308)
14.2
15.9
17.8
18.6
19.6
20.6
21.6
22.6
22.7
22.8
22.9
23.0
23.1
22.9
22.8
22.6
22.4
22.2
21.0
19.9
18.9
Conventional
Shareb
.884
.856
.835
.816
.805
.790
.776
.758
.737
.719
.714
.716
.717
.728
.738
.747
.752
.760
.767
.775
.784
Conventional
Demand
(103 MT U308)
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
Uranium
Price0
($/lb U308)
29.31
30.69
32.07
33.45
34.83
36.20
37.58
38.96
39.21
39.34
39.48
39.62
39.75
39.48
39.34
39.07
38.80
38.52
36.89
35.40
34.04
aLinear interpolation estimates from an incomplete data series.
io of conventional milling to total milling.
cLinear regression estimates for an incomplete data series. The ordinary
least squares equation used for estimating price for the years 1988 to
2000 is: Price = 7.756 + 1.268 (Demand). Prices were updated to 1981 using
the Marshall and Swift equipment cost index for mining, milling
(1979 to 1981 = 17.7%).
B-5
-------
B.3 Production, Inventory, and Mill Closure Estimates
Tables B.3 and B.4 present production and inventory projections for
the baseline and low-growth industry demand scenarios. Uranium
inventories are those inventories held by utilities, reactor
manufacturers, and fuel fabricators and are reported by DOE to be
47,500 MT l^Og as of January 1980. Estimates of premature mill
closures (due to market conditions, not control costs) are calculated
under the restrictive assumptions of inventory adjustment time, new
capacity coming on line, and capacity utilization rates.
In each demand scenario, a six-year period of adjustment is assumed
to be an appropriate time period for the industry to work off the
abnormally high level of excess inventories present at the beginning of
1980. This period was chosen to represent an average among various
possible choices. For example, one possible choice can be represented by
a scenario of total production curtailment. In such a situation, the
level of uranium inventories would decrease to a normal level of about
20,000 MT after two years of consumption. A normal level would be
approximately one year's worth of consumption. The case of total
production curtailment seems unlikely, and, therefore, is not used in this
analysis. Another possible choice is a nine-year inventory adjustment
period that was forecast by Nuexco Corp. (Wh81). This forecast is based
on the assumption that the industry is unwilling to cut back production,
continues to build further inventories until the end of 1983, and is able
to bear the abnormally high carrying costs associated with the large
inventories. A six-year adjustment period is chosen to represent a
combination of elements of the different possible choices.
The exact amount of new capacity coming on line is difficult to
estimate since decisions concerning start-up times are continually
changing. According to DOE estimates, conventional mill capacity as of
January 1980 was 44,500 MT of ore per day or about 18,000 MT of U30g
per year. At the present time, the information available suggests no new
capacity for 1980 and 1981,, only 300 MT of U30s per year of new
capacity for 1982 and 1983, and 600 MT of U30g for 1984 (DOE80). New
capacity after 1984 will be added at a rate necessary to accommodate
expanding consumption and an obsolescence rate of .047. The assumed
obsolescence rate of .047 is 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.
B-6
-------
CO
I
Table B.3. Production and Inventory Projections
Baseline Industry Demand Scenario
(Thousands of Metric Tons of
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4
22.5
23.5
24.6
25.8
27.0
28.4
Begin
Invent .
47.5
49.9
47.1
42.4
37.6
33.1
28.8
25.2
22.2
20.9
21.2
22.8
25.4
29.0
31.4
34.0
36.7
39.6
42.7
45.8
48.9
Begin
Capacity
18.0
17.2
16.0
15.3
14.6
14.2
14.7
15.8
17.5
19.4
21.2
22.9
24.5
26.0
27.5
28.9
30.3
31.8
33.3
34.8
36.1
New
Capacity
0
0
.3
.3
.6
1.2
1.8
2.4
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
3.0
3.0
3.0
3.0
3.0
Obsolete
*a
Capacity
.8
.8
.8
.7
.7
.7
.7
.7
.8
.9
1.0
1.1
1.2
1.2
1.3
1.4
1.4
1.5
1.6
1.6
1.7
Capacity
Utilization
Rate
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
Product.
14.9
10.8
10.2
10.5
11.5
12.3
13.7
15.0
16.6
18.2
19.8
21.3
22.7
22.8
24.0
25.2
26.4
27.7
28.9
30.1
31.3
Premature
Closure
0
.3
.3
.3
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending
Inventory
49.9
47.1
42.4
37.6
33.1
28.8
25.2
22.2
20.9
21.2
22.8
25.4
29.0
31.4
34.0
36.7
39.6
42.7
45.8
48.9
51.8
Ending
Capacity
17.2
16.0
15.3
14.6
14.2
14.7
15.8
17.5
19.4
21.2
22.9
24.5
26.0
27.5
28.9
30.3
31.8
33.3
34.8
36.1
37.4
Obsolescense rate is .047 of capacity.
^These estimates assume a neutral impact from imports and nonconventional production.
-------
w
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
Begin
Invent .
47.5
49.9
47.1
42.4
37.7
33.4
29.4
26.2
23.5
22.2
22.1
23.0
24.3
26.1
27.1
28.3
29.2
29.5
29.3
29.3
29.2
Begin
Capacity
18.0
17.2
16.0
15.3
14.6
14.2
14.7
15.5
16.6
17.6
18.6
19.5
20.1
20.7
21.2
21.1
20.7
19.7
19.4
18.5
17.6
New
Capacity
0
0
.3
.3
.6
1.2
1.5
1.8
1.8
1.8
1.8
1.5
1.5
1.5
0.9
0.6
0.0
.6
0
0
0
Obsolete
a
Capacity
.8
.8
.8
.7
.7
.7
.7
.7
.8
.8
.9
.9
.9
1.0
1.0
1.0
1.0
.9
.9
.9
.8
Capacity
Utilization
Rate
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
Product.
14.9
10.8
10.2
10.5
11.5
12.3
13.6
14.5
15.4
16.3
17.1
17.8
18.3
17.8
18.0
17.8
17.2
16.6
16.1
15.3
14.6
Premature
Closure
0
.3
.3
.3
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending ,
Inventory
49.9
47.1
42.4
37.7
33.4
29.4
26.2
23.5
22.2
22.1
23.0
24.3
26.1
27.1
28.3
29.2
29.5
29.3
29.3
29.2
29.0
Ending
Capacity
17.2
16.0
15.3
14.6
14.2
14.7
15.5
16.6
17.6
18.6
19.5
20.1
20.7
21.2
21.1
20.7
19.7
19.4
18.5
17.6
16.8
Obsolescense rate is .047 of capacity.
''These estimates assume a neutral impact from imports and nonconventional production.
-------
The capacity utilization rate (CUR) is assumed to fluctuate
significantly over the first ten years. For the first five years, until
inventories are decreased to an appropriate level, the CUR will be in the
range of 0.65 to 0.85 (DOE80). The 0.65 level represents an average of
current CUR's in the industry,• and the 0.85 represents a historical CUR
level for the industry (NRC80). An increase in the CUR to 0.90 for the
next seven years is assumed so that the average for the entire forecast
period approaches the historical level of 0.85 and inventory levels remain
at near normal levels. The industry is capable of operating at rates of
0.90 and above during periods of tight supply. During the period 1976
through 1979, the industry operated at above historically normal rates,
reaching a peak of 0.92 in 1978 (DOE79).
The methodology for estimating premature mill closures begins with
the calculation of the ending capacity for each year. The formula for
ending capacity is:
(1) ECt = BCt (1 - ob) + NCt - PCt.
Total production for the industry can be calculated by the following
formula:
(2) TPt = CURt x (BCt + ECt)/2.
Finally, the ending inventory is calculated as follows:
(3) EIt = BIt + (TPt - Dt).
where ECt = Ending capacity in year t
BCt = Beginning capacity in year t
ob = Obsolescence rate
NCt = New capacity in year t
PCt = Premature closures in year t
TPt = Total production in year t
CURt = Capacity utilization rate in year t
EIt = Ending inventory in year t
BIt = Beginning inventory in year t
Dt = Conventional milling demand in year t.
Formula 1 estimates ending capacity for year t by adjusting beginning
capacity in year t for the following three variables: (1) capacity which
becomes obsolete during year t; (2) new capacity which begins production
during year t; and (3) any premature closures during year t caused by any
exogenous events. Formula 2 estimates total production for year t by
averaging the beginning capacity with the ending capacity for year t and
applying an appropriate capacity utilization rate for year t. The average
capacity is used in order to account for new capacity or obsolete capacity
which is in production for a fraction of year t. Formula 3 is an identity
which calculates ending inventory in year t by adjusting beginning
inventory for surplus (deficit) production in year t. These formulas were
used in an iterative procedure until a series of premature closures were
obtained which yielded an ending inventory level in 1986 that approached a
normal level of one year's consumption.
B-9
-------
The results from this procedure, presented in Tables B. 3 and B.4,
indicate premature closures of 300 MT of u^Og capacity per year for
four years, for a cumulative effect of 1200 MT l^Og capacity. These
premature mill closures .do not necessarily represent permanent closures.
The extreme inventory buildup, which forced the closures and reduced
capacity utilization, is only a temporary phenomena. It is possible that
after inventory equilibrium is achieved, these mills will be brought back
on line and treated as new mills.
For both demand scenarios, Tables B.5 and B.6 present a summary of
the projections of demand, production, inventory, and prices for
conventional milling of l^Og. In addition, the projections of
production are segmented by production from old and new capacity. The
following formulas are used to make these calculations:
(4) OCt = ECt
when t = 1982 and years preceding 1982.
Equation 4 identifies old capacity in 1982 as identical to ending capacity
in 1982.
(5) OCt = OC^ - 1/2 (OBt + PCt)
when t = 1983.
Equation 5 estimates old capacity in 1983 to be equal to old capacity in
1982 less any mill closures occurring in 1983 resulting from both
premature closures and obsolete capacity. Only half of the mill closures
occurring in 1983- will impact old production in 1983. The other half of
1983 mill closures is carried forward to the following year since the
impact on production will begin in 1984.
(6) OCt = OCt-i - 1/2 (OB,--! + pct-l> ~
when t = 1984 through 2000.
Equation 6 estimates old capacity for the years 1984 through 2000 by
employing the same methodology used in equation 5. However, an additional
term 1/2 (OBt_^ + pct_j_) occurred in the previous year but begins
impacting production in the current year. For 1984, old capacity is
estimated to be equal to old capacity in 1983 less half of the mill
closures in 1983 and half of the mill closures in 1984.
Production from old capacity is calculated by:
(7) OPt = CURt x OCt
New production is calculated by:
(8) NPt = TPt - OPt
B-10
-------
Table B.5. Summary Table of Projections of Demand, Production,
and Uranium Price for Conventional Milling of
Baseline Industry Demand Scenario
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Conventional
Demand3
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4
22.5
23.5
24.6
25.8
27.0
28.4
Q
Production
Total
14.9
10.8
10.2
10.5
11.5
12.3
13.7
15.0
16.6
18.2
19.8
21.3
22.7
22.8
24.0
25.2
26.4
27.7
28.9
30.1
31.3
Old
14.9
10.8
10.2
10.3
11.0
11.0
11.0
10.4
9.7
8.9
8.1
7.1
6.1
4.8
3.7
2.6
1.4
0.2
0
0
0
New
0
0
0
.1
.5
1.3
2.7
4.6
6.9
9.3
11.7
14.2
16.6
18.0
20.3
22.6
25.0
27.5
28.9
30.1
31.3
Ending
Inventory3
49.9
47.1
42.4
37.6
33.1
28.8
25.2
22.2
20.9
21.2
22.8
25.4
29.0
31.4
34.0
36.7
39.6
42.7
45.8
48.9
51.8
Price
($/lb U308)
29.31
30.69
32.07
33.45
34.83
36.20
37.58
38.96
40.33
41.72
43.09
44.47
45.85
47.22
48.61
49.98
51.35
52.74
54.11
55.50
56.87
aThousands of Metric Tons of
B-ll
-------
Table B.6. Summary Table of Projections of Demand, Production,
and Uranium Price for Conventional Milling of
Low-Growth Industry Demand Scenario
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Conventional
Demand3
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
a
Production
Total
14.9
10.8
10.2
10.5
11.5
12.3
13.6
14.5
15.4
16.3
17.1
17.8
18.3
17.8
18.0
17.8
17.2
16.6
16.1
15.3
14.6
Old
14.9
10.8
10.2
10.3
11.0
11.0
11.0
10.4
9.7
9.0
8.2
7.4
6.6
5.4
4.6
3.7
2.9
2.1
1.3
0.6
0
New
0
0
0
.1
.5
1.3
2.6
4.1
5.7
7.3
8.9
10.4
11.7
12.4
13.4
14.0
14.3
14.5
14.8
14.8
14.6
Ending
Inventory3
49.9
47.1
42.4
37.7
33.4
29.4
26.2
23.5
22.2
22.1
23.6
24.3
26.1
27.1
28.3
29.2
29.5
29.3
29.3
29.2
29.0
Price
($/lb U308)
29.31
30.69
32.07
33.45
34.83
36.20
37.58
38.96
39.21
39.34
39.48
39.62
39.75
39.48
39.34
39.07
38.80
38.52
36.89
35.40
34.04
aThousands of Metric Tons of
B-12
-------
where OCt = Old capacity in year t
OPt = Old production in year t
CURt = Capacity utilization rate in year t
PCt = Premature closures
OBt = Obsolete old capacity in year t (set equal to .047 x BCt)
NPt = New production in year t
TPt = Total production in year t.
B.4 Elasticity of Demand
A discussion on price elasticity of uranium deserves mention within
the context of demand projections. The factors which normally affect the
price elasticity of demand for any product are not significant in the case
of uranium. First, the substitutes for uranium, such as oil, coal, and
natural gas, are not cost competitive at the present time. Coal is the
closest substitute to becoming cost competitive with uranium, but it is
estimated that the price of yellowcake would have to approach $160 per
pound (1980 dollars) before a breakeven would occur (Ni81).
Second, the price of yellowcake is a small part of the total cost of
generating electricity. For the 1980 through 2000 forecast period, the
portion of total nuclear power generation cost due to the cost of
yellowcake is estimated to range from about 9.6 percent in 1980 to
13.5 percent in the year 2000 (Hu81). This slight increase is due solely
to the increase in the price of yellowcake, ceteris paribus, all other
costs of generation remaining constant over time. Based upon this
information, this analysis assumes that the demand for yellowcake is
perfectly inelastic in all scenarios presented.
B.5 Production and Inventory Impacts From Control Caused Closures
Appendix A presented an analysis of mill closures for each economic
impact case. This section is intended to combine the mill closure results
with the projections described above in order to determine the impacts
these closures will have on production, inventories, and the requirements
for new capacity. Table B.7 presents a summary of the mill closure
analysis from Appendix A.
The mill closure estimates are stated in terms of annual
capacity, based on an equivalent small mill capacity of 300 MT
per year. The net capacity equivalent for these closures (see Table B.7)
is estimated by subtracting the 1200 MT l^Og capacity which, as
discussed above, we estimate will close due to market conditions. The net
capacity equivalent for the closures is added to the premature closures in
Table B.3 for the year 1983, the year in which we assume both the standard
will become effective and the decision to close will be made. New
capacity is then adjusted accordingly so that inventory equilibrium will
still be achieved in 1986 and production will be sufficient to meet demand
through the year 2000.
B-13
-------
Table B.7. Model Mill Closure Summary
a
Baseline and Low-Growth Industry Demand Scenarios
Reg.
Opt.
A
Bl
B2
C
D
E
F
G
Hi
H2
H3
H4
I
J
K
L
Ml
M2
M3
M4
N
No. of
Model Mill Small Mill
Closures Equivalents
No Closures
No Closures
No Closures
No Closures
No Closures
No Closures
No Closures
No Closures
2 Small
No Closures
No Closures
1 Small
1 Small
1 Large
No Closures
No Closures
No Closures
2 Small
1 Large
1 Small
1 Small
1 Small
2 Small
1 Large
5 Small
1 Medium
3 Large
-
-
2
-
-
1
4
-
-
-
5
1
1
1
5
16
Capacity Net No. of
Equivalent Small Mill
(MT U-jOs) Equivalents^
-
-
600
-
-
300
1200
-
-
-
1500 1
300
300
300
1500 1
4800 12
Net Capacity
Equivalent
(MT U308)
-
-
-
-
-
-
—
-
-
-
300
-
-
-
300
3600
Estimated under conditions of 100 percent cost absorption and
20 percent cash flow margin. The results for both demand scenarios are
the same for the 20% cash flow case.
The net number of small mill equivalents is equal to the gross number
of small mill equivalents minus the four small mill closures due to
market conditions.
B-14
-------
The adjustment procedure just outlined is a simplified simulation of
a more realistic simultaneous adjustment process. A more likely situation
would involve more than one variable changing in the adjustment process.
For example, if an inventory increase (decrease) occurs, not only will the
addition of new capacity decrease (increase), but it can be expected that
the obsolescence rate will increase (decrease), the capacity utilization
rate will decrease (increase), and more (less) premature closures will
occur. The simultaneous adjustment process would allow the impact to be
spread over many variables. The single variable adjustment process used
in this analysis will overestimate the impact on additions to new capacity.
The mill closure analysis is complicated by the parameters of closure
timing. In the DCF analysis of Appendix A, if mill closure appears
justified, the timing is assumed to occur when the standard becomes
effective, i.e., 1983. In reality, it is conceivable that some mills
could operate longer if their yearly net cash flow exceeds the incremental
yearly tailings control cost. This on-going situation arises because of
the assumption that the mills are financially responsible for control of
the existing tailings pile whether they close before or after the
effective date of the standard. Facing such an obligation from the
accumulated tailings piles, some mills could face less of a loss if they
continued to operate. More detailed investigations of specific timing
were felt to not be possible because such investigations would require
individual mill information about marginal control cost curves and
marginal production cost curves.
B.5.1 Baseline Industry Demand Scenario
As shown in Table B.7, only 3 of the 22 economic impact cases result
in net mill closures, that is, closures which are greater than those which
we estimate would take place anyway in the absence of any control costs
due to market conditions. Thirteen of the cases result in no closures
and, therefore, have no impact on the projections. The remaining 6 cases
have closures but were not examined since the plant closure capacity
equivalent is less than the premature closures due to market conditions
(i.e., no net closures in Table B.7).
Cases L and M^ indicate a reduction in capacity of five small model
mill equivalents or 1,500 MT of U^Og. The impacts on the projections
for these cases are shown in Table B.8. There is no impact on the
introduction of new capacity. Demand is met by a slight reduction in
inventory levels. Production at old mills is slightly lower than that
which takes place in the no closure case.
The results for Case N — a reduction in capacity of sixteen small
model mill equivalents or 4800 MT of UgOg — are presented in
Table B.9. The simulation under this option requires additional new
capacity in each year from 1984 through 1990. The biggest increase from
the no closure case is in 1985 where an additional 900 MT of l^Og
capacity is required. Inventory levels are also substantially reduced
B-15
-------
Table B.8.
Cd
I
Production and Inventory Projections - Cases L and
Baseline Industry Demand Scenario
(Thousands of Metric Tons of
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4
22.5
23.5
24.6
25.8
27.0
28.4
Begin.
Invent .
47.5
49.9
47.1
42.4
37.4
32.6
28.0
24.2
20.8
19.2
19.3
20.7
23.0
26.3
28.6
31.0
33.4
36.1
39.1
42.0
45.0
Begin.
Capacity
18.0
17.2
16.0
15.3
14.2
13.8
14.4
15.5
17.2
19.1
20.9
22.6
24.2
25.8
27.3
28.7
30.0
31.6
33.1
34.6
36.0
New
Capacity
0
0
.3
.3
.6
1.2
1.8
2.4
2.7
2.7
2.7
2.7
2.7
2.7
2.7
2.7
3.0
3.0
3.0
3.0
3.0
Obsolete
. b
Capacity
.8
.8
.8
.7
.7
.6
.7
.7
.8
.9
1.0
1.1
1.1
1.2
1.3
1.3
1.4
1.5
1.6
1.6
1.7
Capacity
Utilization Production
Rate
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
14.9
10.8
10.2
10.3
11.2
12.0
13.4
14.7
16.3
18.0
19.6
21.1
22.5
22.5
23.8
25.0
26.2
27.5
28.8
30.0
31.1
Old
14.9
10.8
10.2
10.2
10.7
10.7
10.7
10.1
9.4
8.6
7.8
6.9
5.9
4.6
3.5
2.4
1.2
9
0
0
0
New
0
0
0
0.1
0.5
1.3
2.7
4.6
6.9
9.3
11.7
14.2
16.6
18.0
20.3
22.6
25.0
27.5
28.8
30.0
31.1
Premature
Closure
0
.3
.3
.6
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending
Inventory
49.9
47.1
42.4
37.4
32.6
28.0
24.0
20.8
19.2
19.3
20.7
23.0
26.3
28.6
31.0
33.4
36.1
39.1
42.0
45.0
47.7
Ending
Capacity
17.2
16.0
15.3
14.2
13.8
14.4
15.5
17.2
19.1
20.9
22.6
24.2
25.8
27.3
28.7
30.0
31.6
33.1
34.6
36.0
37.3
aThese options include the closure of 2 small mills and 1 large mill which is approximately equal to
1.5 thousand metric tons. Net control-caused closures would be equal to 1.5 thousand metric tons minus
1.2 thousand metric tons of premature closure capacity.
^Obsolescence rate is .047 of capacity.
cPremature closures includes closures caused by control which are assumed to occur in 1983.
-------
w
I
Table B.9. Production and Inventory Projections - Case Na
Baseline Industry Demand Scenario
(Thousands of Metric Tons of 1)303)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.3
16.0
16.6
17.3
18.0
17.9
17.9
18.2
18.7
19.2
20.3
21.4
22.5
23.5
24.6
25.8
27.0
28.4
Begin.
Invent.
47.5
49.9
47.1
42.4
36.2
28.9
22.4
17.3
13.3
11.2
11.1
12.5
15.1
18.7
21.1
23.7
26.4
29.2
32.3
35.5
38.6
Begin.
Capacity
18.0
17.2
16.0
15.3
10.7
11.1
12.7
14.5
16.5
18.7
20.8
22.9
24.5
26.0
27.5
28.9
30.3
31.8
33.3
34.8
36.1
New
Capacity
0
0
.3
.3
1.2d
2.1d
2.4d
2.7d
3.0d
3.0d
3.0d
2.7
2.7
2.7
2.7
2.7
3.0
3.0
3.0
3.0
3.0
Capacity
Obsolete Utilization Production
Capacity Rate
.8
.8
.8
.7
.5
.5
.6
.7
.8
.9
1.0
1.1
1.2
1.2
1.3
1.4
1.4
1.5
1.6
1.6
1.7
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
14.9
10.8
10.2
9.1
8.7
10.1
12.2
13.9
15.8
17.8
19.7
21.3
22.7
22.8
24.0
25.1
26.4
27.7
28.9
30.1
31.3
Old
14.9
10.8
10.2
9.0
8.0
7.9
7.9
7.3
6.7
5.9
5.1
4.2
3.2
2.0
0.9
0
0
0
0
0
0
New
0
0
0
0.1
0.7
2.2
4.3
6.6
9.2
11.9
14.6
17.1
19.6
20.8
23.1
25.1
26.4
27.7
28.9
30.1
31.3
Premature
Closure
0
.3
.3
3.9
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending
Inventory
49.9
47.1
42.4
36.2
28.9
22.4
17.3
13.3
11.2
11.1
12.5
15.1
18.7
21.1
23.7
26.4
29.2
32.3
35.5
38.6
41.5
Ending
Capacity
17.2
16.0
15.3
10.7
11.1
12.7
14.5
16.5
18.7
20.8
22.9
24.5
26.0
27.5
28.9
30.3
31.8
33.3
34.8
36.1
37.4
aThese options include the closure of 5 small mills, 1 medium mill, and 3 large mills, which is approximately
equal to 4.8 thousand metric tons. Net control-caused closures would be equal to 4.8 thousand metric tons minus
1.2 thousand metric tons of premature closure capacity.
^Obsolescence rate is .047 of capacity.
cPremature closures includes closures caused by control which are assumed to occur in 1983.
dlncludes new mill capacity additional to new capacity projected for the no closure case (Table B.3).
-------
from the no closure case, reaching a low of 11,100 MT I^Og in 1990
compared to a low of 20,900 MT in 1989. Total industry production is
lower from 1983 through 1989 but is the same as that projected in the no
closure case from 1990 to 2000. Production is shifted from old mills to
new mills, as new mill production is higher from 1984 through 1997 than
that projected in the no closure case.
B.5.2 Low-Growth Industry Demand Scenario
Tables B.10 and B.ll present the simulation results for the three
cases which have net mill closures under the low-growth industry demand
scenario. For Cases L and M4 (Table B.10), which both result in
closures of five small mill equivalents, there is a small increase in the
new capacity projection for 1994 through 1996. Yearly inventory levels
are slightly lower throughout the projection period than that of the no
closure case. Total industry production is slightly higher from 1995
through 2000.
In Case N (Table B.ll), which results in the closure of sixteen small
mill equivalents, projections of new capacity are higher than in the no
closure case for the years 1985 through 1990 and 1994 through 1996.
Demand is met by a significant reduction in inventory levels. Inventories
reach a low of 7000 MT of U308 in 1991, a 70 percent reduction in the
minimum inventory level of 22,100 MT (in 1990) from the no closure case.
Total industry production for this case is lower than the no closure case
for the years 1983 through 1995 and higher from 1996 through the year 2000.
B-18
-------
Table B.10. Production and Inventory Projections - Cases L and
Low-Growth Industry Demand Scenario
(Thousands of Metric Tons of 0303)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
w 1990
,1 1991
o 1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
Begin.
Invent.
47.5
49.9
47.1
42.4
37.5
32.9
28.6
25.1
22.2
20.6
20.2
20.8
21.9
23.4
24.3
25.4
26.5
27.6
28.1
28.9
29.5
Begin.
Capacity
18.0
17.2
16.0
15.3
14.2
13.8
14.4
15.2
16.3
17.3
18.3
19.2
19.8
20.4
20.9
21.2
21.4
20.7
20.3
19.3
18.4
New
Capacity
0
0
.3
.3
.6
1.2
1.5
1.8
1.8
1.8
1.8
1.5
1.5
1.5
1.2d
1.2d
0.3d
.6
0
0
0
Capacity
Obsolete Utilization Production
Capacity
.8
.8
.8
.7
.7
.6
.7
.7
.8
.8
.9
.9
.9
1.0
1.0
1.0
1.0
1.0
1.0
.9
.9
Rate
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
14.9
10.8
10.2
10.3
11.2
12.0
13.3
14.2
15.1
16.0
16.9
17.6
18.1
17.6
17.9
18.1
17.9
17.4
16.8
16.1
15.3
Old
14.9
10.8
10.2
10.2
10.7
10.7
10.7
10.1
9.4
8.7
8.0
7.2
6.4
5.2
4.4
3.5
2.7
1.8
1.0
0.2
0
New
0
0
0
0.1
0.5
1.3
2.6
4.1
5.7
7.3
8.9
10.4
11.7
12.4
13.5
14.5
15.2
15.6
15.8
15.8
15.3
Premature
Closure
0
.3
.3
.6
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending
Inventory
49.9
47.1
42.4
37.5
32.9
28.6
25.1
22.2
20.6
20.2
20.8
21.9
23.4
24.3
25.4
26.5
27.6
28.1
28.9
29.5
30.0
Ending
Capacity
17.2
16.0
15.3
14.2
13.8
14.4
15.2
16.3
17.3
18.3
19.2
19.8
20.4
20.9
21.2
21.4
20.7
20.3
19.3
18.4
17.6
aThese options include the closure of 2 small model mills and 1 large model mill, which is approximately equal
to 1.5 thousand metric tons. Net control-caused closures would be equal to 1.5 thousand metric tons minus
1.2 thousand metric tons of premature closure capacity.
^obsolescence rate is .047 of capacity.
cPremature closures includes closures caused by control which are assumed to occur in 1983.
dlncludes new mill capacity additional to new capacity projected for the no closure case (Table B.4).
-------
Table B.ll. Production and Inventory Projections - Case Na
Low-Growth Industry Demand Scenario
(Thousands of Metric Tons of
Cd
1
N5
O
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Demand
12.5
13.6
14.9
15.2
15.8
16.3
16.8
17.1
16.7
16.4
16.3
16.5
16.6
16.7
16.8
16.9
16.8
16.9
16.1
15.4
14.8
Begin.
Invent.
47.5
49.9
47.1
42.4
36.3
29.0
22.0
16.3
11.6
8.6
7.2
7.0
7.5
8.5
8.9
9.5
10.2
11.3
12.1
13.2
14.1
Begin.
Capacity
18.0
17.2
16.0
15.3
10.7
10.5
11.5
13.1
14.5
16.0
17.3
18.6
19.2
19.8
20.4
20.6
20.9
21.1
20.7
19.7
18.8
New
Capacity
0
0
.3
.3
.6
1.5d
2.1d
2.1d
2.1d
2.1d
2.1d
1.5
1.5
1.5
1.2d
1.2d
1.2d
.6
0
0
0
Capacity
Obsolete Utilization Production
Capacity
.8
.8
.8
.7
.5
.5
.5
.6
.7
.7
.8
.9
.9
.9
1.0
1.0
1.0
1.0
1.0
.9
.9
Rate
.85
.65
.65
.70
.80
.85
.90
.90
.90
.90
.90
.90
.90
.85
.85
.85
.85
.85
.85
.85
.85
Total
14.9
10.8
10.2
9.1
8.5
9.3
11.0
12.4
13.7
15.0
16.2
17.0
17.6
17.1
17.4
17.6
17.8
17.7
17.2
16.4
15.6
Old
14.9
10.8
10.2
9.0
8.0
7.9
7.9
7.4
6.8
6.2
5.5
4.7
3.9
2.9
2.1
1.3
0.5
0
0
0
0
New
0
0
0
0.1
0.5
1.4
3.1
5.0
6.9
8.8
10.7
12.3
13.6
14.2
15.3
16.3
17.3
17.7
17.2
16.4
15.6
Premature
Closure
0
.3
.3
3.9
.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ending
Inventory
49.9
47.1
42.4
36.3
29.0
22.0
16.3
11.6
8.6
7.2
-7.0
7.5
8.5
8.9
9.5
10.2
11.3
12.1
13.2
14.1
14.9
Ending
Capacity
17.2
16.0
15.3
10.7
10.5
11.5
13.1
14.5
16.0
17.3
18.6
19.2
19.8
20.4
20.6
20.9
21.1
20.7
19.7
18.8
17.9
aThese options include the closure of 5 small model mills, 1 medium mill, and 3 large model mills, which is
approximately equal to 4.8 thousand metric tons. Net control-caused closures would be equal to 4.8 thousand
metric tons minus 1.2 thousand metric tons of premature closure capacity.
^Obsolescence rate is .047 of capacity.
cPremature closures includes closures caused by control which are assumed to occur in 1983.
dlncludes new mill capacity additional to new capacity projected for the no closure case (Table B.4).
-------
REFERENCES FOR APPENDIX B
DOE79 U.S. Department of Energy, Statistical Data of the Uranium
Industry, GJO-100(79), January 1, 1979.
DOE80 U.S. Department of Energy, Energy Information Administration,
1980 Annual Report to Congress, Volume Three: DOE/EIA-0173(80)/3.
Hu81 Correspondence between Ross Humphreys, U.S. Department of Energy,
and Kevan Deardorff, JACA Corp., June 19, 1981.
Lo81 Telephone conversation between L. W. Long, Battelle Pacific
Northwest Laboratory, and Kevan Deardorff, JACA Corp.,
July 14, 1981.
Ni81 Telephone conversation between D. Nikoden, U.S. Department of
Energy and Kevan Deardorff, JACA Corp., July 28, 1981.
NRC80 U.S. Nuclear Regulatory Commission, Final Generic Environmental
Impact Statement on Uranium Milling, NUREG-0706, September 1980.
Ro81 Telephone conversation between B. Roberts, U.S. Department of
Energy and Kevan Deardorff, JACA Corp., November 3, 1981.
Wh81 White, George, Jr., "Uranium, Supply-Demand Imbalance Leads to
Sharp Price Break and Intense Seller Competition," Engineering
and Mining Journal, March 1981.
B-21
-------
APPENDIX C
ANNUAL INDUSTRY DISPOSAL COSTS,
BY ECONOMIC IMPACT CASE AND INDUSTRY CATEGORY, 1980-2000
-------
TABLE C.1
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE A
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
198U
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.2
0.4
0.7
1.1
1.4
1.8
2.2
2.6
2.8
3.1
3.5
3.8
4.2
4,4
4.6
4.8
0.0
0.0
0.0
0.0
0.1
0.2
0.4
0.7
1.1
1.4
1.8
2.2
2.6
2.8
3.1
3.5
3.8
4.2
4.4
4.6
4.8
0.0
0.0
0.0
0.0
0.1
0.1
0.3
0.5
0.7
0.9
1.1
1.2
1.4
1.4
1.5
1.6
1.7
1.8
1.8
1.7
1.7
0.0
0.0
0.0
0.0
0.0
0.1
0.2
0.3
0.4
0.6
0.6
0.7
0.7
0.7
0.7
0.8
0.8
0.8
0.7
0.7
0.6
41.7
41.7
19.3
9.6
-------
TABLE C.2
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASK II1
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
EXISTING
TAILINGS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
EXISTING MILLS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
0.4
1.7
4.5
9.5
16.1
24.1
32.7
41.2
49.7
58.2
63.0
71.1
79.1
87.6
96.6
101.5
105.7
109.7
TOTAL
COST
0.0
0.0
0.0
0.4
1.7
4.5
9.5
16.1
24.1
32.7
41.2
49.7
58.2
63. G
71.1
79.1
87.6
96.6
101.5
105.7
109.7
DISCOUNTED
5%
0.0
0.0
0.0
0.3
1.3
3.3
6.7
10.9
15.6
20.1
24.1
27.7
30.9
31.8
34.2
36.3
38.2
40.1
40.2
39.8
39.4
TOTAL
10%
0.0
0.0
0.0
0.3
1.0
2.5
4.9
7.5
10.2
12.6
14.4
15.8
16.9
16.6
17.0
17.2
17.3
17.4
16.6
15.7
14.8
CUMULATIVE COST
1980-2000
0.0
0.0
952.3
952.3
440.8
218.8
-------
TABLE C.3
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASK B2
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
c,
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
0.0
0.0
0.0
0.4
1.7
4.4
8.8
14.2
20.3
26.2
31.5
36.2
40.3
41.6
44.7
47.4
50.0
52.4
52.5
52.0
51.4
0.0
0.0
0.0
0.3
1.4
3.3
6.3
9.8
13.4
16.5
18.9
20.7
22.0
21.7
22.2
22.5
22.7
22.7
21.7
20.5
19.4
1244.3
1244.3
576.0
285.9
-------
TABLE C.4
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
EXISTING
TAILINGS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
EXISTING MILLS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
1.2
5.6
14.9
31.5
53.6
80. A
108.7
137.1
165.4
193.8
209.8
236.6
263.4
291.7
321.4
337.9
351.8
365.0
TOTAL
COST
0.0
0.0
0.0
1.2
5.6
14.9
31.5
53.6
80.4
108.7
137.1
165.4
193.8
209.8
236.6
263.4
291 ..7
321.4
337.9
351.8
365.0
DISCOUNTED
5%
0.0
0.0
0.0
1.0
4.4
11. -1
22.4
36.3
51.8
66.7
80.1
92.1
102.8
106.0
113.8
120.7
127.3
133.6
133.7
132.6
131.0
TOTAL
10%
0.0
0.0
0.0
0.8
3.5
8.4
16.2
25.0
34.1
41.9
48.0
52.7
56.1
55.3
56.6
57.3
57.7
57.8
55.2
52.3
49.3
CUMULATIVE COST
1980-2000
0.0
0.0
3169.7
3169.7
1467.3
728.4
-------
TABLE C.5
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE C
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981.DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
I960
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
25.9
25.9
25.9
25.9
25.9
0.0
G.O
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
129.3
6.2
4.5
4.2
4.3
4.6
4.6
4.6
4.3
4.0
3.7
3.4
3.0
2.6
2.0
1.5
1.1
0.6
0.1
0.0
0.0
0.0
59.3
0.0
0.0
0.0
0.3
1.6
4.2
8.9
15.2
22.7
30.8
38.8
46.8
54.8
59.4
66.9
74.5
82.5
90.9
95.6
99.5
03.3
32.1
30.4
30.1
30.5
32.0
8.8
13.5
19.5
26.8
34.5
42.1
49.8
57.4
61.3
68.5
75.6
83.1
91.0
95.6
99.5
103.3
30.6
27.5
26.0
25.1
25.1
6.6
9.6
13.2
17.3
21.2
24.6
27.7
30.4
31.0
32.9
34.6
36.3
37.8
37.8
37.5
37.1
29.2
25.1
22.6
20.8
19.9
5.0
6.9
9.1
11.4
13.3
14.8
15.9
16.6
16.2
16.4
16.5
16.4
16.4
15.6
14.8
14.0
896.7
1085.3
569.9
336.7
-------
TABLE C.6
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE D
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
25.9
25.9
25.9
25.9
25.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
129.3
6.2
4.5
4.2
4.3
4.6
4.6
4.6
4.3
4.0
3.7
3.4
3.0
2.6
2.0
1.5
1.1
0.6
0.1
0.0
0.0
0.0
59.3
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.. 5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
32.1
30.4
30.1
30.7
32.7
10.4
17.0
25.4
35.6
46.4
57.2
67.9
78.6
84.4
94.4
104.5
115.1
126.2
132.6
138.1
143.3
30.6
27.5
26.0
25.2
25.6
7.8
12.1
17.2
22.9
28.5
33.4
37.8
41.7
42.6
45.4
47.9
50.2
52.5
52.5
52.0
51.4
29.2
25.1
22.6
20.9
20.3
5.9
8.7
11.8
15.1
17.9
20.0
21.6
22.8
22.2
22.6
22.7
22.8
22.7
21.7
20.5
19.4
1244.3
1432.9
730.8
416.6
-------
TABLE C.7
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE E
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2UOO
2
2
,2
,2
2
30.
30.
30.
30.
30.
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.7
7.0
6.6
6.7
7.2
7.2
7.2
6.8
6.3
5.8
5.2
4.6
4.0
3.1
2.4
1.7
0.9
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.4
1.7
4.5
9.5
16.1
24.1
32.7
41.2
49.7
58.2
63.0
71.1
79.1
87.6
96.6
101.5
105.7
109.7
40.0
37.3
36.9
37.3
39.1
11.6
16.6
22.9
30.4
38.5
46.4
54.3
62.2
66.1
73.5
80.8
88.5
96.7
101.5
105.7
109.7
38.0
33.8
31.8
30.7
30.6
8.7
11.8
15.5
19.6
23.6
27.1
30.3
33.0
33.4
35.4
37.0
38.6
40.2
40.2
39.8
39.4
36.3
30.8
27.7
25.5
24.3
6.6
8.5
10.7
12.9
14.8
16.3
17.3
18.0
17.4
17.6
17.6
17.5
17.4
16.6
15.7
14.8
CUMULATIVE COST
1980-2000
151.2
92.5
952.3
1196.0
638.6
384.3
-------
TABLE C.8
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE F
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
j
00
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2
.2
,2
,2
,2
30-
30.
30.
30.
30.
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.7
7.0
6.6
6.7
7.2
7.2
7.2
6.8
6.3
5.8
5.2
4.6
4.0
3.1
2.4
1.7
0.9
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.6
19.7
29.5
39.9
50.4
60.8
71.2
77.1
86.9
96.8
107.1
118.1
124.1
129.2
134.1
40.0
37.3
36.9
37.4
39.5
12.6
18.8
26.4
35.8
45.7
55.6
65.4
75.2
80.2
89.3
98.4
108.0
118.2
124.1
129.2
134.1
38.0
33.8
31.8
30.8
30.9
9.4
13.3
17.9
23.1
28.1
32.5
36.4
39.9
40.5
43.0
45.1
47.1
49.1
49.1
48.7
48.1
36.3
30.8
27.7
25.6
24.5
7.1
9.6
12.3
15.2
17.6
19.5
20.8
21.8
21.1
21.4
21.4
21.4
21.3
20.3
19.2
18.1
CUMULATIVE COST
1980-2000
151.2
92.5
1164.3
1408.0
736.7
433.0
-------
TABLE C.9
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE C
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
79.9
79.9
79.9
79.9
79.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.7
12.1
11.4
11.6
12.3
12.3
12.4
11.6
10.9
10.0
9.0
8.0
6.9
5.3
4.2
2.9
1.6
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
96.6
92.0
91.3
92.0
94.4
18.2
24.7
32.7
42.4
52.7
62.8
72.9
82.9
87.7
97.0
106.3
116.1
126.4
132.6
138.1
143.3
92.0
83.4
78.9
75.7
74.0
13.6
17.6
22.1
27.3
32.3
36.7
40.6
44.0
44.3
46.7
48.7
50.6
52.5
52.5
52.0
51.4
87.8
76.0
68.6
62.8
58.6
10.3
12.7
15.2
18.0
20.3
22.0
23.2
24.0
23.1
23.2
23.1
23.0
22.7
21.7
20.5
19.4
399.5
159.2
1244.3
1803.0
1036.9
676.3
-------
TABLE C.10
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE 111
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
o
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.0
10.1
9.5
9.7
10.3
10.3
10.3
9.7
9.1
8.3
7.5
6.7
5.7
4.5
3.5
2.4
1.3
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.6
19.7
29.5
39.9
50.4
60.8
71.2
77.1
86.9
96.8
107.1
118.1
124.1
129.2
134.1
63.9
60.1
59.5
60.1
62.3
15.8
21.9
29.4
38.6
48.3
57.9
67.4
76.9
81.5
90.4
99.2
108.4
118.2
124.1
129.2
134.1
60.9
54.5
51.4
49.4
48.8
11.8
15.6
19.9
24.9
29.6
33.8
37.5
40.8
41.2
43.5
45.4
47.3
49.1
49.1
48.7
48.1
58.1
49.6
44.7
41.0
38.7
8.9
11.2
13.7
16.4
18.6
20.3
21.5
22.3
21.5
21.6
21.6
21.5
21.3
20.3
19.2
18.1
CUMULATIVE COST
1980-2000
249.9
133.0
1164.3
1547.2
851.4
530.1
-------
TABLE C.11
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASI- 112
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.0
10.1
9.5
9.7
10.3
10.3
10.3
9.7
9.1
8.3
7.5
6.7
5.7
4.5
3.5
2.4
1.3
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
63.9
60.1
59.5
60.1
62.5
16.1
22.7
30.8
40.6
51.0
61.3
71.6
81.8
86.8
96.3
105.8
115.8
126.3
132.6
138.1
143.3
60.9
54.5
51.4
49.5
49.0
12.0
16.1
20.8
26.2
31.3
35.9
39.9
43.4
43.9
46.3
48.5
50.5
52.5
52.5
52.0
51.4
58.1
49.6
44.7
41.1
38.8
9.1
11.6
14.3
17.2
19.7
21.5
22.8
23.7
22.9
23.1
23.0
22.9
22.7
21.7
20.5
19.4
CUMULATIVE COST
1980-2000
249.9
133.0
1244.3
1627.2
888.4
548.5
-------
TABLE C.I2
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE 113
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE' TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
60.5
60.5
60.5
60.5
60.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
302.6
19.6
,1
,3
14.
13.
13.6
14.4
14.4
14.5
13.6
12.7
11.7
10.6
9.3
8.0
6.3
4.9
3.4
1.8
0.2
0.0
0.0
0.0
186.4
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
\
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
80.1
74.7
73.9
74.6
77.2
20.3
26.8
34.7
44.2
54.4
64.4
74.3
84.1
88.6
97.7
106.8
116.3
126.4
132.6
138.1
143.3
76.3
67.7
63.8
61.3
60.5
15.1
19.1
23.5
28.5
33.4
37.6
41.4
44.6
44.8
47.0
48.9
50.8
52.5
52.5
52.0
51.4
72.8
61.7
55.5
50.9
47.9
11.4
13.8
16.2
18.8
21.0
22.6
23.7
24.4
23.3
23.4
23.2
23.0
22.7
21.7
20.5
19.4
1244.3
1733.3
972.7
617.8
-------
TABLE C.I3
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE 114
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
88.0
88.0
88.0
88.0
88.0
O.C
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
439.8
25.6
,5
5
18.
17.
17.8
18.9
18.9
19.0
17.9
16.6
15.3
13.8
12,
10.
8.2
6.4
4.4
2.4
0.3
O.C
0.0
0.0
244.2
,2
5
0.0
0.0
0.0
0.6
2.7
7.2
15.2
25.8
38.7
52.3
66.0
79.6
93.3
101.0
113.9
126.8
140/4
154.7
162.6
169.3
175.7
113.6
106.5
105.4
106.3
109.6
26.1
34.1
43.6
55.3
67.6
79.8
SI. 9
103.8
109.2
120.3
131.2
142.8
155.0
162.6
169.3
175.7
108.2
96.6
91.1
87.5
85.9
19.4
24.3
29.5
35.7
41.5
46.7
51.2
55.1
55.2
57.8
60.1
62.3
64.4
64.4
63.8
63.1
103.3
88.0
79.2
72.6
68.0
14.7
17.5
20.4
23.5
26.1
28.0
29.3
30.1
28.8
28.8
28.6
28.3
27.9
26.6
25.2
23.7
1525.8
2209.8
1263.5
818.3
-------
TABLE C.14
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE L
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.4
40.9
36.9
32.7
28.1
21.9
17.0
11.8
6.4
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
68.5
49.4
46.7
47.9
52.7
56.3
63.0
68.7
76.0
83.5
90.7
97.6
104.2
104.3
109.9
115.2
120.9
126-9
132.6
138.1
143.3
65.2
44.8
40.3
39.4
41.3
42.0
44.8
46.5
49.0
51.3
53.1
54.4
55.2
52.7
52.9
52.8
52.8
52.7
52.5
52.0
51.4
62.2
40.9
35.1
32.7
32.7
31.8
32.3
32.0
32.2
32.2
31.8
31.1
30.2
27.5
26.3
25.1
23.9
22.8
21.7
20.5
19.4
0.0
652.1
1244.3
1896.4
1047.0
644.4
-------
TABLE C.I5
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE J
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
I
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
25.9
25.9
25.9
25.9
25.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.4
40.9
36.9
32.7
28.1
21.9
17.0
11.8
6.4
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
94.3
75.3
72.5
73.8
78.6
56.3
63.0
68.7
76.0
83.5
90.7
97.6
104.2
104.3
109.9
115.2
120.9
126.9
132.6
138.1
143.3
89.8
68.3
62.7
60.7
61.6
42.0
44.8
46.5
49.0
51.3
53.1
54.4
55.2
52.7
52.9
52.8
52.8
52.7
52.5
52.0
51.4
85.7
62.2
54.5
50.4
48.8
31.8
32.3
32.0
32.2
32.2
31.8
31.1
30.2
27.5
26.3
25.1
23.9
22.8
21.7
20.5
19.4
129.3
652.1
1244.3
2025.7
1158.9
742.4
-------
TABLE C.16
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE K
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
30.2
30.2
30.2
30.2
30.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
64.1
46.3
43.7
44.4
47.3
47.2
47.4
44.6
41.6
38.2
34.6
3CL6
26.3
20.5
15.9
11.1
6.0
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.6
19.7
29.5
39.9
50.4
60.8
71.2
77.1
86.9
96.8
107.1
118.1
124.1
129.2
134.1
94.3
76.5
73.9
75.1
79.6
52.7
58.9
64.3
71.1
78.2
84.9
91.3
97.5
97.6
102.8
107.8
113.1
118.8
124.1
129.2
134.1
89.8
69.4
63.8
61.8
62.3
39.3
41.9
43.5
45.8
48.0
49.6
50.9
51.7
49.3
49.5
49.4
49.4
49.3
49.1
48.7
48.1
85.7
63.2
55.5
51.3
49.4
29.7
30.2
30.0
30.2
30.1
29.8
29.1
28.2
25.7
24.6
23.5
22.4
21.4
20.3
19.2
18.1
CUMULATIVE COST
1980-2000
151.2
610.2
1164.3
1925.7
1110.6
717.6
-------
TABLE C.I7
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE L
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
79.9
79.9
79.9
79.9
79.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0''
0.0
0.0
0.0
0.0
68.5
49.4
46.7
46.8
49.1
49.0
49.2
46.3
43.1
39.6
35.8
31.5
27.0
20.9
16.1
11.0
5.6
0.0
0.0
0.0
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
0.5
2.2
5.8
12. A
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.1
131.9
137.4
142.6
TOTAL
COST
148.4
129.3
126.6
127.2
131.2
54.9
61.6
67.3
74.7
82.3
89.6
96.5
103.1
103.3
109.0
114.4
120.1
126.1
131.9
137.4
142.6
DISCOUNTED
5%
141.3
117.3
109.3
104.6
102.8
41.0
43.8
45.6
48.1
50.5
52.4
53.7
54.7
52.2
52.4
52.4
52.4
52.4
52.2
51.8
51.2
TOTAL
10%
1 3~4 . 9
106.9
95.1
86.9
81.5
31.0
31.6
31.4
31.7
31.7
31.4
30.7
29.9
27.2
26.1
24.9
23.8
22.7
21.6
20.4
19.3
399.5
635.7
1242.0
2277.2
1382.0
940.4
-------
TABLE C.I8
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASK Ml
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
CO
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
64.1
46.3
43.7
44.4
47.3
47.2
47.4
44.6
41.6
38.2
34.6
30.6
26.3
20.5
15.9
11.1
6.0
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.6
19.7
29.5
39.9
50.4
60.8
71.2
77.1
86.9
96.8
107.1
118.1
124.1
129.2
134.1
114.0
96.2
93.6
94.8
99.3
52.7
58.9
64.3
71.1
78.2
84.9
91.3
97.5
97.6
102.8
107.8
113.1
118.8
124.1
129.2
134.1
108.6
87.3
80.9
78.0
77.8
39.3
41.9
43.5
45.8
48.0
49.6
50.9
51.7
49.3
49.5
49.4
49.4
49.3
49.1
48.7
48.1
103.7
79.5
70.4
64.7
61.7
29.7
30.2
30.0
30.2
30.1
29.8
29.1
28.2
25.7
24.6
23.5
22.4
21.4
20.3
19.2
18.1
CUMULATIVE COST
1980-2000
249.9
610.2
1164.3
2024.4
1196.1
792.5
-------
TABLE C.19
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE M2
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0'
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.4
40.9
36.9
32.7
28.1
21.9
17.0
11.8
6.4
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
118.4
99.4
96.6
97.9
102.7
56.3
63.0
68.7
76.0
83.5
90.7
97.6
104.2
104.3
109.9
115.2
120.9
126.9
132.6
138.1
143.3
112.8
90.2
83.5
80.5
80.5
42.0
44.8
46.5
49.0
51.3
53.1
54.4
55.2
52.7
52.9
52.8
52.8
52.7
52.5
52.0
51.4
107.7
82.2
72.6
66.8
63.8
31.8
32.3
32.0
32.2
32.2
31.8
31.1
30.2
27.5
26.3
25.1
23.9
22.8
21.7
20.5
19.4
249.9
652.1
1244.3
2146.3
1263.4
833.9
-------
TABLE C.20
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE M3
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
60.5
60.5
60.5
60.5
60.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.4
40.9
36.9
32.7
28.1
21.9
17.0
11.8
6.4
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
12.4
21.0
31.5
42.7
53.8
64.9
76.1
82.4
92.9
103.4
114.5
126.2
132.6
138.1
143.3
129.0
110.0
107.2
108.4
113.2
56.3
63.0
68.7
76.0
83.5
90.7
97.6
104.2"
104.3
109.9
115.2
120.9
126.9
132.6
138.1
143.3
122.8
99.7
92.6
89.2
88.7
42.0
44.8
46.5
49.0
51.3
53.1
54.4
55.2
52.7
52.9
52.8
52.8
52.7
52.5
52.0
51.4
117.2
90.9
80.5
74.0
70.3
31.8
32.3
32.0
32.2
32.2
31.8
31.1
30.2
27.5
26.3
25.1
23.9
22.8
21.7
20.5
19.4
302.6
652.1
1244.3
2199.0
1309.0
873.8
-------
TABLE C.21
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASK M4
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
ho
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
88.0
88.0
88.0
88.0
88.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
83.9
60.6
57.2
57. 4
60.2
60.1
60.3
56.8
52.9
48.6
43.9
38.7
33.1
25.7
19.7
13.4
6.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.6
2.7
7.2
15.2
25.8
38.7
52.3
66.0
79.6
93.3
101.0
113.9
126.8
140.4
154.7
161.7
168.4
174.8
171.9
148.6
145.2
145.9
150.9
67.3
75.5
82.6
91.6
100,9
109.8
118.3
126.4
126.7
133.6
140.2
147.2
154.7
161.7
168.4
174.8
163.7
134.6
125.4
120.1
118.2
50.2
53.7
55.9
59.0
62.0
64.2
65.9
67.0
64.0
64.3
64.2
64.2
64.3
64.0
63.5
62.8
156.3
122.8
109.1
99.7
93.7
38.0
38.7
38.5
38.8
38.9
38.5
37.7
36.6
33.4
32.0
30.5
29.1
27.8
26.4
25.0
23.6
439.8
779.5
1523.1
2742.3
1651.3
1115.2
-------
TABLE C.22
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASK N
BASELINE INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
NJ
1-0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
188.5
188.5
188.5
188.5
188.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
41.2
36.6
36.3
36.1
33.5
30.5
27.1
23.3
19.0
14.5
9.0
4.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
3.3
9.9
19.8
30.3
42.1
54.4
66.8
78.6
89.7
95.2
105.7
115.2
120.9
126.9
132.6
138.1
143.3
257.0
238.0
235.2
230.2
228.4
46.2
55.9
63.8
72.6
81.5
90.1
97.6
104.1
104.2
109.9
115.2
120.9
126.9
132.6
138.1
143.3
244.7
215.8
203.2
189.4
179.0
34.5
39.8
43.2
46.8
50.1
52.7
54.3
55.2
52.7
52.8
52.8
52.7
52.7
52.5
52.0
51.4
233.6
196.7
176.7
157.2
141.8
26.1
28.7
29.8
30.8
31.4
31.6
31.1
30.2
27.5
26.3
25.1
23.9
22.8
21.7
20.5
19.4
942.6
475.8
1373.2
2791.7
1828.3
1332.8
-------
TABLE C.23
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE A
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
ho
U)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
O.G
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.2
0.4
0.6
0.9
1.1
1.4
1.6
1.8
1.9
2.1
2.2
2.2
2.2
2.3
2.3
2.2
0.0
0.0
0.0
0.0
0.1
0.2
0.4
0.6
0.9
1.1
1.4
1.6
1.8
1.9
2.1
2.2
2.2
2.2
2.3
2.3
2.2
0.0
0.0
0.0
0.0
0.1
0.1
0.3
0.4
0.6
0.7
0.8
0.9
1.0
1.0
1.0
1.0
1.0
0.9
0.9
0.9
0.8
0.0
0.0
0.0
0.0
0.0
0.1
0.2
0.3
0.4
0.4
0.5
0.5
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.3
0.3
25.4
25.4
12.2
6.3
-------
TABLE C.24
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE Bl
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
o
i
ho
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
EXISTING
TAILINGS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
EXISTING MILLS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
0.4
1.7
4.5
9.0
14.2
19.9
25.6
31.2
36.5
41.2
43.4
47.4
51.0
54.5
57.2
58.1
58.1
56.4
TOTAL
COST
0.0
0.0
0.0
0.4
1.7
4.5
9.0
14.2
19.9
25.6
31.2
36.5
41.2
43.4
47.4
51.0
54.5
57.2
58.1
58.1
56.4
DISCOUNTED
5%
0.0
0.0
0.0
0.3
1.3
3.3
6.4
9.6
12.8
15.7
18.3
20.3
21.8
21.9
22.8
23.3
23.8
23.8
23.0
21.9
20.3
TOTAL
10%
0.0
0.0
0.0
0.3
1.0
2.5
4.6
6.6
8.4
9.9
11.0
11.6
11.9
11.4
11.3
11.1
10.8
10.3
9.5
8.6
7.6
CUMULATIVE COST
1980-2000
0.0
0.0
610.2
610.2
290.7
148.6
-------
TABLE C.25
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE B2
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
Ln
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
0.0
0.0
0.0
0.4
1.7
4.4
8.4
12.6
16.7
20.5
23.9
26.5
28.5
28.6
29.5
29.4
28.5
27.7
26.8
25.5
24.0
0.0
0.0
0.0
0.3
1.4
3.3
6.0
8.7
11.0
12.9
14.3
15.2
15.6
14.9
14.7
14.0
12.9
12.0
11.1
10.1
9.1
757.3
757.3
363.7
187.4
-------
TABLE C.26
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE B3
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2UOO
EXISTING
TAILINGS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
EXISTING MILLS
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
1.2
5.6
14.9
29.9
47.3
66.2
85.1
104.0
121.3
137.1
144.3
156.3
163.7
166.7
169.6
172.6
172.6
170.7
TOTAL
COST
0.0
0.0
0.0
1.2
5.6
14.9
29.9
47.3
66.2
85.1
104.0
121.3
137.1
144.3
156.3
163.7
166.7
169.6
172.6
172.6
170.7
DISCOUNTED
5%
0.0
0.0
0.0
1.0
4.4
11.1
21.3
32.0
42.7
52.2
60.8
67.6
72.7
72.9
75.2
75.0
72.7
70.5
68.3
65.1
61.3
TOTAL
10%
0.0
0.0
0.0
0.8
3.5
8.4
15.4
22.1
28.1
32.8
36.4
38.7
39.7
38.0
37.4
35.6
33.0
30.5
28.2
25.7
23.1
CUMULATIVE COST
19hU-20(K)
0.0
0.0
1929.1
1929.1
926.6
477.3
-------
TABLE C.27
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE C
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
EXISTING
TAILINGS
25.9
25.9
25.9
25.9
25.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FUTURE TAILINGS
EXISTING MILLS
6.2
4.5
4.2
4.3
4.6
4.6
4.6
4.3
4.1
3.8
3.4
3.1
2.7
2.3
1.9
1.6
1.2
0.9
0.5
0.2
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
0.3
1.6
4.2
8.5
13.4
18.7
24.1
29.4
34.3
38.8
40.8
44.2
46.3
47.1
48.0
48.8
48.8
48.3
TOTAL
COST
32.1
30.4
30.1
30.5
32.0
8.8
13.1
17.7
22.8
27.8
32.9
37.4
41.5
43.1
46.1
47.9
48.4
48.9
49.4
49.1
48.3
DISCOUNTED
5%
30.6
27.5
26.0
25.1
25.1
6.6
9.3
12.0
14.7
17.1
19.2
20. 8
22.0
21.8
22.2
21.9
21.1
20.3
19.5
18.5
17.3
TOTAL
10%
29.2
25.1
22.6
20.8
19.9
5.0
6.7
8.3
9.7
10.7
11.5
11.9
12.0
11.3
11.0
10.4
9.6
8.8
8.1
7.3
6.5
CUMULATIVE COST
1980-2000
129.3
63.1
545.7
738.1
418.6
266.5
-------
TABLE C.28
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE D
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
00
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
25.9
25.9
25.9
25.9
25.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.2
4.5
4.2
4.3
4.6
4.6
4.6
4,3
4.1
3.8
3.4
3.1
2.7
2.3
1.9
1.6
1.2
0.9
0.5
0.2
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
32.1
30.4
30.1
30.7
32.7
10.4
16.4
22.9
30.0
37.2
44.3
50.7
56.6
58.9
63.2
65.8
66.6
67.5
68.3
68.0
67.0
30.6
27.5
26.0
25.2
25.6
7.8
11.6
15.5
19.4
22.8
25.9
28.2
30.0
29.8
30.4
30.1
29.1
28.0
27.0
25.6
24.0
29.2
25.1
22.6
20.9
20.3
5.9
8.4
10.7
12.7
14.3
15.5
16.2
16.4
15.5
15.1
14.3
13.2
12.1
11.2
10.1
9.1
CUMULATIVE COST
1980-2000
129.3
63.1
757.3
949.6
520.2
318.8
-------
TABLE C.29
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE E
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS 6F 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
19bO
1981
1982
1983
1984
1985
1986
19b7
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
198U-2000
,2
,2
2
2
.2
30.
30.
30.
30.
30.
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
151.2
9.7
7.0
6.6
6.7
7.2
7.2
7.2
6.8
6.3
5.9
5.4
4.8
4.3
3.5
3.0
2.4
1.9
1.4
0.9
0.4
0.0
98.4
0.0
0.0
0.0
0.4
1.7
4.5
9.0
14.2
19.9
25.6
31.2
36.5
41.2
43.4
46.9
49.2
50.1
51.0
51.9
51.9
51.3
40.0
37.3
36.9
37.3
39.1
11.6
16.2
21.0
26.2
31.4
36.6
41.3
45.5
46.9
49.9
51.6
52.0
52.3
52.7
52.2
51.3
38.0
33.8
31.8
30.7
30.6
8.7
11.5
14.2
16.9
19.3
21.4
23.0
24.1
23.7
24.0
23.6
22.7
21.7
20.9
19.7
18.4
36.3
30.8
27.7
25.5
24.3
6.6
8.3
9.8
11.1
12.1
12.8
13.2
13.2
12.3
12.0
11.2
10.3
9.4
8.6
7.8
6.9
579.6
829.2
478.8
310.1
-------
TABLE C.30
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE F
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
30.2
30.2
30.2
30.2
30.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
151.2
9.7
7.0
6.6
6.7
7.2
7.2
7.2
6.8
6.3
5.9
5.4
4.8
4.3
3.5
3.0
2.4
1.9
1.4
0.9
0.4
0.0
98.4
0.0
0.0
0.0
0.5
2.1
5.5
11.0
17.4
24.3
31.3
38.2
44.6
50.4
53.0
57.4
60.1
61.2
62.3
63.4
63.4
62.7
40.0
37.3
36.9
37.4
39.5
12.6
18.2
24.1
30.6
37.1
43.6
49.4
54.6
56.5
60.4
62.6
63.1
63.7
64.3
63.8
62.7
38.0
33.8
31.8
30.8
30.9
9.4
12.9
16.3
19.7
22.8
25.5
27.5
29.0
28.6
29.0
28.7
27.5
26.5
25.4
24.0
22.5
36.3
30.8
27.7
25.6
24.5
7.1
9.3
11.3
13.0
14.3
15.3
15.7
15.8
14.9
14.5
13.6
12.5
11.5
10.5
9.5
8.5
708.6
958.2
540.7
342.1
-------
TABLE C.31
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE G
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
o
u>
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1990
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
79.9
79.9
79.9
79.9
79.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16.7
12.1
11.4
11.6
12.3
12.3
12.4
11.6
10.9
10.1
9.2
8.3
7.4
6.1
5.1
4.2
3.2
2.3
1.5
0.6
0.0
FUTURE TAILINGS
NEW MILLS
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
TOTAL
COST
96.6
92.0
91.3
92.0
94.4
18.2
24.1
30.2
36.9
43.5
50.0
55.9
61.2
62.7
66.5
68.4
68.7
68.9
69.2
68.4
67.0
DISCOUNTED
5%
92.0
83.4
78.9
75.7
74.0
13.6
17.1
20.4
23.8
26.7
29.3
31.2
32.5
31.7
32.0
31.4
30.0
28.6
27.4
25.8
24.0
TOTAL
10%
87.8
76.0
68.6
62.8
58.6
10.3
12.4
14.1
15.6
16.8
17.5
17.8
17.7
16.5
15.9
14.9
13.6
12.4
11.3
10.2
9.1
399.5
169.3
757.3
1326.1
829.2
579.9
-------
TABLE C.32
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE Hi
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
OJ
fo
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.0
1
,5
,7
,3
3
3
,1
,1
,4
10.
9.
9.
10.
10.
10.
9.
9.
8.
7.7
6.9
6.2
5.1
4.3
3.5
2.7
2.0
1.2
0.5
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.0
17.4
24.3
31.3
38.2
44.6
50.4
53.0
57.4
60.1
61.2
62.3
63.4
63.4
62.7
63.9
60.1
59.5
60.1
62.3
15.8
21.3
27.1
33.4
39.7
45.9
51.5
56.5
58.1
61.7
63.6
63.9
64.3
64.6
63.9
62.7
60.9
54.5
51.4
49.4
48.8
11.8
15.2
18.3
21.5
24.4
26.8
28.7
30.0
29.3
29.7
29.1
27.9
26.7
25.6
24.1
22.5
58.1
49.6
44.7
41.0
38.7
8.9
10.9
12.6
14.2
15.3
16.1
16.4
16.4
15.3
14.8
13.8
12.6
11.6
10.6
9.5
8.5
CUMULATIVE COST
1980-2000
249.9
141.4
708.6
1099.9
656.6
439.7
-------
TABLE C.33
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE H2
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
i
u>
to
1980
1981
1982
1963
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.0
10.1
9.5
9.7
10.3
10.3
10.3
9.7
9.1
8.4
7.7
6.9
6.2
5.1
4.3
3.5
2.7
2.0
1.2
0.5
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
63.9
60.1
59.5
60.1
62.5
16.1
22.1
28.3
35.1
41.8
48.5
54.6
60.0
61.7
65.6
67.7
68.1
68.5
69.0
68.3
67.0
60.9
54.5
5K4
49.5
49.0
12.0
15.7
19.1
22.6
25.7
28.4
30.4
31.8
31.2
31.6
31.0
29.7
28.5
27.3
25.7
24.0
58.1
49.6
44.7
41.1
38.8
9.1
11.3
13.2
14.9
16.1
17.0
17.4
17.4
16.3
15.7
14.7
13.5
12.3
11.3
10.1
9.1
249.9
141.4
757.3
1148.6
680.0
451.7
-------
TABLE C.34
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE H3
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10>.
o
u>
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
,5
5
5
5
,5
60.
60.
60.
60.
60.
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
19.6
14.1
13.3
13.6
14.4
14.4
14.5
13.6
12.7
11.8
10.8
9.7
8.6
7.1
6.G
4.9
3.8
2.7
1.7
0.7
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
80.1
74.7
73.9
74.6
77.2
20.3
26.2
32.2
38.7
45.2
51.6
57.4
62.4
63.8
67.3
69.1
69.2
69.3
69.5
68.5
67.0
76.3
67.7
63.8
61.3
60.5
15.1
18.6
21.8
25.0
27.7
30.2
31.9
33.1
32.2
32.4
31.7
30.2
28.8
27.5
25.8
24.0
72.8
61.7
55.5
50.9
47.9
11.4
13.5
15.0
16.4
17.4
18.1
18.3
18.1
16.8
16.1
15.0
13.7
12.5
11.4
10.2
9.1
CUMULATIVE COST
1980-2000
302.6
198.3
757.3
1258.1
765.7
521.8
-------
TABLE C.35
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE 114
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
LJ
Ul
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
88.0
88.0
88.0
88.0
88.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
25.6
18.5
17.5
17.8
18.9
18.9
19.0
17.9
16.7
15.5
14.1
12.8
11.3
9.3
7.9
6.4
4.9
3.4
2.0
0.5
0.0
0.0
0.0
0.0
0.6
2.7
7.2
14.4
22.8
31.9
41.0
50.1
58.4
66.0
69.5
75.9
81.7
87.4
91.7
93.1
93.1
90.4
113.6
106.5
105.4
106.3
109.6
26.1
33.4
40.6
48.5
56.4
64.2
71.2
77.3
78.8
83.8
88.1
92.3
95.1
95.1
93.7
90.4
108.2
96.6
91.1
87.5
85.9
19.4
23.7
27.5
31.3
34.6
37.5
39.6
41.0
39.8
40.3
40.3
40.3
39.5
37.6
35.3
32.5
103.3
88.0
79.2
72.6
68.0
14.7
17.1
18.9
20.6
21.7
22.5
22.7
22.4
20.7
20.1
19.2
18.3
17.1
15.5
13.9
12.2
439.8
258.8
977.7
1676.3
1029.5
708.8
-------
TABLE C.36
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE I
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
'NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
i
u>
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
199U
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0..0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.6
41.3
37.8
34.1
30.2
24.8
21.0
17.1
13.3
9.6
6.0
2.5
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33. A
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
68.5
49.4
46.7
47.9
52.7
56.3
62.4
66.2
70.6
74.7
78.6
81.7
84.0
81.5
82.3
81.4
78.7
76.2
73.8
70.3
67.0
65.2
44.8
40.3
39.4
41.3
42.0
44.3
44.8
45.5
45.8
45.9
45.5
44.6
41.1
39.6
37.3
34.3
31.7
29.2
26.5
24.0
62.2
40.9
35.1
32.7
32.7
31.8
32.0
30.9
29.9
28.8
27.5
26.0
24.3
21.5
19.7
17.7
15.6
13.7
12.1
10.4
9.1
CUMULATIVE COST
1980-2000
0.0
693.5
757.3
1450.7
853.3
554.6
-------
TABLE C.37
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE J
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
LO
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
25.9
25.9
25.9
25.9
25.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.6
41.3
37.8
34.1
30.2
24.8
21.0
17.1
13.3
9.6
6.0
2.5
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
94.3
75.3
72.5
73.8
78.6
56.3
62.4
66.2
70.6
74.7
78.6
81.7
84.0
81.5
82.3
81.4
78.7
76.2
73.8
70.3
67.0
89.8
68.3
62.7
60.7
61.6
42.0
44.3
44.8
45.5
45.8
45.9
45.5
44.6
41.1
39.6
37.3
34.3
31.7
29.2
26.5
24.0
85.7
62.2
54.5
50.4
48.8
31.8
32.0
30.9
29.9
28.8
27.5
26.0
24.3
21.5
19.7
17.7
15.6
13.7
12.1
10.4
9.1
129.3
693.5
757.3
1580.0
965.2
652.6
-------
TABLE C.38
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE K
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
LO
CC
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
30.2
30.2
30.2
30.2
30.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
,0.0
0.0
0.0
0.0
0.0
0.0
64.1
46.3
43.7
44.4
47.3
47.2
47.4
44.6
41.7
38.6
35.3
31.9
28.3
23.2
19.6
16.0
12.4
9.0
5.6
2.4
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.0
17. A
24.3
31.3
38.2
44.6
50.4
53.0
57.4
60.1
61.2
62.3
63.4
63.4
62.7
94.3
76.5
73.9
75.1
79.6
52.7
58.4
62.0
66.0
69.9
73.5
76.4
78.6
76.2
77.0
76.1
73.7
71.3
69.0
65.8
62.7
89.8
69.4
63.8
61.8
62.3
39.3
41.5
42.0
42.6
42.9
43.0
42.6
41.7
38.5
37.1
34.9
32.1
29.6
27.3
24.8
22.5
85.7
63.2
55.5
51.3
49.4
29.7
30.0
28.9
28.0
26.9
25.8
24.4
22.8
20.1
18.4
16.6
14.6
12.8
11.3
9.8
8.5
151.2
648.9
708.6
1508.7
929.4
633.6
-------
TABLE C.39
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE L
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
LO
VD
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
79.9
79.9
79.9
79.9
79.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
46.8
49.1
49.0
49.2
46.3
43.3
40.0
36.6
32.9
29.2
23.8
20.1
16.2
12.3
8.5
4.7
1.1
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.9
66.6
69.5
71.3
72.4
72.4
70.1
148.4
129.3
126.6
127.2
131.2
54.9
60.9
64.9
69.3
73.4
77.4
80.6
83.0
80.5
82.0
82.8
81.8
79.7
77.2
73.5
70.1
141.3
117.3
109.3
104.6
102.8
41.0
43.3
43.9
44.6
45.1
45.3
44.9
44.0
40.7
39.4
37.9
35.7
33.1
30.5
27.7
25.2
134.9
106.9
95.1
86.9
81.5
31.0
31.3
30.3
29.4
28.3
27.1
25.7
24.0
21.2
19.6
18.0
16.2
14.3
12.6
10.9
9.5
CUMULATIVE COST
1980-2000
399.5
673.8
781.4
1854.6
1197.7
854.6
-------
TABLE C.40
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE Ml
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGb
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
O
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
64.1
46.3
43.7
44.4
47.3
47.2
47.4
44.6
41.7
38.6
35.3
31.9
28.3
23.2
19.6
16.0
12.4
9.0
5.6
2.4
0.0
0.0
0.0
0.0
0.5
2.1
5.5
11.0
17.4
24.3
31.3
38.2
44.6
50.4
53.0
57.4
60.1
61.2
62.3
63.4
63.4
62.7
114.0
96.2
93.6
94.8
99.3
52.7
58.4
62.0
66.0
69.9
73.5
76.4
78.6
76.2
77.0
76.1
73.7
71.3
69.0
65.8
62.7
108.6
87.3
80.9
78.0
77.6
39.3
41.5
42.0
42.6
42.9
43.0
42.6
41.7
38.5
37.1
34.9
32.1
29.6
27.3
24.8
22.5
103.7
79.5
70.4
64.7
61.7
29.7
30.0
28.9
28.0
26.9
25.8
24.4
22.8
20.1
18.4
16.6
14.6
12.8
11.3
9.8
8.5
249.9
648.9
708.6
1607.4
1014.9
708.4
-------
TABLE C.41
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE M2
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
50.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.
50.
50.6
47.7
44.6
41.3
37.8
34.1
30.2
24.8
21.0
17.1
13.3
9.6
6.0
2.5
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
118.4
99.4
96.6
97.9
102.7
56.3
62.4
66.2
70.6
74.7
78.6
81.7
84.0
81.5
82.3
81.4
78.7
76.2
73.8
70.3
67.0
112.8
90.2
83.5
80.5
80.5
42.0
44.3
44.8
45.5
45.8
45.9
45.5
44.6
41.1
39.6
37.3
34.3
31.7
29.2
26.5
24.0
107.7
82.2
72.6
66.8
63.8
31.8
32.0
30.9
29.9
28.8
27.5
26.0
24.3
21.5
19.7
17.7
15.6
13.7
12.1
10.4
9.1
CUMULATIVE COST
1980-2000
249.9
693.5
757.3
1700.6
1069.7
744.1
-------
TABLE C.42
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE M3
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
o
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
60.5
60.5
60.5
60.5
60.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
47.4
50.5
50.5
50.6
47.7
44.6
41.3
37.8
34.1
30.2
24.8
21.0
17.1
13.3
9.6
6.0
2.5
0.0
0.0
0.0
0.0
0.5
2.2
5.8
11.8
18.6
26.0
33.4
40.8
47.6
53.8
56.7
61.3
64.3
65.4
66.6
67.8
67.8
67.0
129.0
110.0
107.2
108.4
113.2
56.3
62.4
6 6'. 2
70.6
74.7
78.6
81.7
84.0
81.5
82.3
81.4
78.7
76.2
73.8
70.3
67.0
122.8
99.7
92.6
89.2
88.7
42.0
44.3
44.8
45.5
45.8
45.9
45.5
44.6
41.1
39.6
37.3
34.3
31.7
29.2
26.5
24.0
117.2
90.9
80.5
74.0
70.3
31.8
32.0
30.9
29.9
28.8
27.5
26.0
24.3
21.5
19.7
17.7
15.6
13.7
12.1
10.4
9.1
302.6
693.5
757.3
1753.3
1115.3
784.0
-------
TABLE C.43
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE M4
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
i
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
CUMULATIVE COST
1980-2000
88.0
88.0
88.0
88.0
88.0
0.0
0.0
C.O
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
83.9
60.6
57.2
57.4
60.2
60.1
60.3
56.8
53.1
49.1
44.9
40.4
35.7
29.2
24.6
19.9
15.1
10.4
5.8
1.3
0.0
0.0
0.0
0.0
0.6
2.7
7.2
14.4
22.8
31.9
41.0
50.1
58.4
66.0
69.5
75.9
81.7
85.2
87.4
88.8
88.8
85.9
171.9
148.6
145.2
145.9
150.9
67.3
74.7
79.6
84.9
90.0
94.9
98.8
101.7
98.7
100.5
101.5
100.3
97.8
94.6
90.2
85.9
163.7
134.8
125.4
120.1
118.2
50.2
53.1
53.9
54.7
55.3
55.5
55.0
54.0
49.9
48.4
46.5
43.8
40.6
37.4
34.0
30.8
156.3
122.8
109.1
99.7
93.7
38.0
38.4
37.1
36.0
34.7
33.3
31.5
29.5
26.0
24.1
22.1
19.9
17.6
15.5
13.4
11.6
439.8
826.2
958.2
2224.1
1425.3
1010.0
-------
TABLE C.44
ANNUAL FLOWS OF INDUSTRY DISPOSAL COSTS, CASE N
LOW GROWTH INDUSTRY DEMAND SCENARIO
(MILLIONS OF 1981 DOLLARS)
EXISTING
TAILINGS
FUTURE TAILINGS
EXISTING MILLS
FUTURE TAILINGS TOTAL
NEW MILLS COST
DISCOUNTED TOTAL
5% 10%
n
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
188.5
188.5
188.5
188.5
188.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
68.5
49.4
46.7
41.2
36.6
36.4
36.4
34.0
31.3
28.4
25.1
21.7
18.0
13.4
9.8
6.0
2.2
0.0
0.0
0.0
0.0
0.0
0,0
0.0
0.5
2.2
6.4
14.2
22.9
31.5
40.2
48.9
56.3
62.5
64.8
70.1
74.8
79,4
61*3
78.7
75.0
71.4
257.0
238.0
235.2
230.2
227.3
42.8
50.6
56.9
62.9
68.6
74.0
78.0
80.5
78.3
79.9
80.8
81.6
81.3
78.7
75.0
71.4
244.7
215.8
203.2
189.4
178.1
31.9
36.0
38.5
40.5
42.1
43.3
43.4
42.7
39.5
38.4
37.0
35.6
33.8
31.1
28.3
25.6
233.6
196.7
176.7
157.2
141.1
24.2
26.0
26.5
26.7
26.4
.25.9
24.8
23.3
20.6
19.1
17.6
16.2
14.6
12.9
11.1
9.7
CUMULATIVE COST
1980-2000
942.6
505.0
881.1
2328.7
1619.0
1230.9
-------
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.
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). 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
-------
Table D.I. Ownership of Licensed Uranium Mills
Uranium Mill
Location
Mill Operator
Parent Corporation
Employment of
Parent Corporation
(Thousands)
o
I
S3
Canon City, CO
Uravan, CO
Seboyeta, NM
Church Rock, NM
Bluewater, NM
Ambrosia Lake, NM
Milan, NM
Marquez, NM
Edgemont, SD
Panna Maria, TX
Falls City, TX
Ray Point, TX
Blanding, UT
La Sal, UT
Moab, UT
Hanksvilie, UT
Ford, WA
Wellpinit, WA
Gas Hills, WY
Gas Hills, WY
Powder River, WY
Powder River, WY
Jeffrey City, WY
Gas Hills, WY
Shirley Basin, WY
Shirley Basin, WY
Red Desert, WY
Cotter Corp.
Union Carbide Corp.
Sohio-Reserve
United Nuclear Corp.
Anaconda
Kerr-McGee Nuclear Corp.
Homestake Mining Co.
Bokum Resources Corp.
Tennessee Valley Authority
Chevron
Conoco-Pioneer
Exxon Corp.
Energy Fuels Nuclear
Rio Algom Ltd.
Atlas Corp.
Plateau Resources, Ltd.
Dawn Mining Co.
Western Nuclear
Federal-American Partners
Pathfinder Mines Corp.
Rocky Mountain Energy/
Mono Power
Exxon Corp.
Western Nuclear Corp.
Union Carbide Corp.
Pathfinder Mines Corp.
Petrotomics Co.
Minerals Exploration Co.
Commonwealth Edison
Union Carbide Corp.
The Standard Oil Co. (Ohio)
Reserve Oil & Minerals Corp.
UNC Re sou re e s, Inc.
Atlantic Richfield Co.
Kerr-McGee Corp.
Homestake Mining Co.
Bokum Resources Corp.
U.S. Go ve rnment
Standard Oil of California
Conoco, Inc.^a'
Pioneer Corp.
Exxon Corp.
Energy Fuels Nuclear'"'
Rio Algom Ltd.
Atlas Corp.
Consumers Power Co.
Newmont Mining Corp.
Phelps Dodge Corp.
Federal Resources Corp.
American Nuclear Corp.
General Electric'0-'
Union Pacific Corp.
Southern California Edison Co.
Exxon Corp.
Phelps Dodge Corp.
Union Carbide Corp.
General Electric^0)
Getty Oil Co.
Union Oil Co.
16
101
23
< 1
5
53
11
2
< 1
40
42
3
177
< 1
7
2
12
12
15
< 1
< 1
402
33
14
177
15
101
402
17
17
Conoco and Dupont merged in 1981.
Blanding mill is owned 60 percent by Energy Fuels Nuclear, and the remainder is owned
by two Swiss utilities.
'c'General Electric has sold 80 percent of its interest in their uranium mills to the
French Company, Cogema.
-------
TECHNICAL REPORT DATA
(Please read Instructions on the reverse before completing)
1. REPORT NO.
EPA Report 520/1-82-023
2.
3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
Regulatory Impact Analysis of Environmental Standards
for Uranium Mill Tailings at Active Sites
5. REPORT DATE
March 1983
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S) ~ —~
U.S. Environmental Protection Agency
Office of Radiation Programs (ANR-460), 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 is proposing health and environmental
protection standards for control of uranium and thorium tailings during ore
processing operations and for final disposal. These standards would 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 control methods and presents
the rationale for the selection of the proposed standards.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
).IDENTIFIERS/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
•1. NO. OF PAGES
266
20. SECURITY CLASS (This page)
Unclassified
22. PRICE
EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION is OBSOLETE
* U.S. QCVEH1WHW PRJNTDE OFFICE: 1983
381-545/3810
------- |