NFS' yellowcake project still cooking

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   A joint venture between Nuclear Fuel Services Inc. and a subsidiary of a Swedish based energy conglomerate to produce milled uranium may be on hold pending available funding from the U.S. Department of Energy.
   The International Uranium Corporation (IUC) and Nuclear Fuel Services Inc. announced in November of 2002 a 50/50 joint venture company called Urizon Recovery Systems, LLC, to pursue the development of a new, long-term, alternate feed program for the company's White Mesa Mill in Utah.
   The USM Ore Program that Urizon is pursuing involves the development of a process and construction of a plant at NFS' facility in Erwin for the blending of contaminated low enriched uranium with depleted uranium to produce a natural uranium ore, or "USM Ore," a trademarked brand of uranium. The USM Ore will then be further processed at the Company's White Mesa Mill to produce conventional yellowcake.
   According to an IUC status report issued Jan. 29, both companies are now re-evaluating whether to pursue the project under an alternative agreement given the recent increases in the price of uranium.
   A preliminary report by the DOE released in 2000 stated there were 4,700 metric tons of contained surplus low enriched uranium at 28 sites across the DOE Complex, which would yield approximately 15 million pounds of yellowcake as well as other sources of materials suitable for the program.
   Yellowcake is milled uranium oxide and is the first step toward enriched uranium. At a processing unit, uranium is extracted from the ore, purified and concentrated in the form of a yellow-colored salt called yellowcake.
   The IUC and NFS had pursued funding from DOE to cover the costs of the design of the pilot facility and other costs of pursuing the project. The success of the program will depend on securing funding and DOE's support of the program as a means to disposition orphan nuclear materials within the DOE complex, according to the IUC.
   The primary source of feed for the USM Ore Program will be significant quantities of contaminated materials within the DOE complex. There are a number of streams of low enriched uranium that contain various contaminants, throughout the DOE complex.
   NFS submitted a proposal on behalf of Urizon to the DOE in April of 2003 for funding to cover the costs of the design of the processing facility in Erwin, and other costs of pursuing the USM Ore Program. In January, NFS was notified that DOE would be unable to fund the program due to funding constraints and programmatic needs, according to the IUC status report.
   A telephone call placed to IUC's office in Vancouver, British Columbia seeking comment on the USM program's status was not immediately returned on Friday.
   NFS is presently seeking amendment to its Special Nuclear Materials license 124 as part of the Blended Low Enriched Uranium (BLEU) Project. Under the BLEU Project, NFS and another private company have partnered to propose down blending of highly enriched uranium and converting it into fuel for Tennessee Valley Authority nuclear power reactors. The Blended Low-Enriched Uranium Preparation Facility will enable NFS to process approximately half of the BLEU Project's 33 metric tons of surplus HEU, with the other half being downblended at the DOE's Savannah River Site near Aiken, S.C.
   Two of three license amendment requests submitted by NFS have already been approved by the U.S. Nuclear Regulatory Commission. A third license amendment for the operation of an Oxide Conversion Facility and related Effluent Processing Building is currently under review by the NRC.
   IUC is engaged in uranium exploration and production. The company holds significant uranium deposits in Mongolia and the United States including a fully permitted 2,000-ton per day uranium mill near Blanding, Utah, one of only two operating uranium mills in the nation. The company also holds uranium exploration properties in the Athabasca Region in Canada.
   IUC is one of the Lundin Group of Companies, a Stockholm-based company that owns international oil interests around the world including in the Middle East hotspots of Iran and Sudan. A sister company, Lundin Petroleum, has a 30 percent interest in the Munir Exploration Block, an onshore exploration site located in southwestern Iran near the Persian Gulf. The block is located in the petroleum system of the Zagros Fold Belt located near a number of major oil fields. Results of the seismic acquisition have identified major structures. The first exploration well (Sehqanat deep-1) was spudded in December 2003.
   The Munir Block was awarded to Edison International in January 2001 under a four-year agreement (buy-back contract) with the National Iranian Oil Corporation (NIOC). Following the signature, Edison assigned a 40 percent interest to Lundin Petroleum which was approved by NIOC on Sept. 26, 2001.
   In November 2002 NIOC approved the transfer of a 30 percent interest in the Munir Block to Petronas Carigali, a subsidiary of Malaysia's national petroleum corporation Petronas (Petroliam Nasional Bhd). The government-owned Petronas company is most recognized for its headquarters in the 88-story Petronas Twin Towers dubbed the tallest buildings in the world in the Kuala Lumpur.
   Lundin Petroleum reported on Friday that the exploration of the Sehqanat-1 deep well had reached an initial depth of 1,828 meters and has penetrated the Asmari and Sarvak reservoirs as anticipated. Logs have been run, casing has been cemented and the rig is currently on standby waiting for equipment in order to resume drilling operations as per the drilling program.
   The exploration plans to reach a total target depth of 2,887 meters in order to penetrate a further five potential reservoirs. In the absence of any further operational delays with regards to the well, expected target depth will be reached within 65 to 75 days once drilling operations resume.