State report: Wyoming uranium industry primed for success

GILLETTE – Uranium production looks to be back on the upswing after years of dormancy.

A report recently completed by the Wyoming State Geological Survey found that Wyoming is primed to take advantage of the expected expansion of the domestic uranium industry.

And Campbell County should be right in the thick of things.

Wyoming leads the country in uranium mining and has the largest economic uranium ore reserves in the U.S. which are located across the Powder River Basin, Great Divide Basin, Shirley Basin and Gas Hills.

While Wyoming leads the nation in this area, the problem has been that the demand has been pretty much non-existent.

Both Wyoming and total U.S. production of yellowcake, the solid form of mixed uranium oxide that is produced from uranium ore, peaked in 1980. That year, Wyoming produced 12.1 million pounds, compared to 43.7 million pounds nationwide.

In 2021, just 21,000 pounds of uranium was produced domestically.

There have been efforts to help revive the industry. In 2020, the state Legislature adjusted the severance tax rate for uranium to encourage production, so that when prices are less than $30 per pound, no severance tax is applied. The tax rate will rise with the price, maxing out at 4% when the price is more than $60 a pound.

Between 2014 and 2021, low uranium prices made many domestic deposits uneconomic, forcing operators to substantially reduce operations and as a result, all U.S. mines were eventually idled or shut down entirely.

But now, in efforts to reduce carbon emissions while decreasing a reliance on Russia for nuclear power, the U.S. government has been making efforts to strengthen domestic uranium production.

Nuclear reactors provide about 20% of electricity in the U.S. One grape-sized nuclear fuel pellet has as much energy as 1 ton of coal, three barrels of oil or 17,000 cubic feet of natural gas.

Compared to wind and solar energy, nuclear energy requires much less land and can continuously generate electricity, according to the report. The higher energy output per nuclear plant means it will require fewer grid connections than wind or solar developments with similar energy outputs.

In early 2023, the Department of Energy purchased domestic uranium to establish a Strategic Uranium Reserve. The program was funded with an initial $75 million to purchase uranium that had been mined in the U.S.

Contracts were awarded to five companies for a total of 10 million pounds of yellowcake, purchased at rates between $60 to $70 per pound. All five companies - Encore Energy, Energy Fuels, Peninsula, UR-Energy, and Uranium Energy Corp. - are involved in uranium projects in Wyoming.

The in-situ recovery mines in Wyoming remained viable for longer than mines in other states, so they're a step ahead when it comes to ramping up production when prices become favorable.

There are three licensed uranium operations in southern Campbell County. Reno Creek and Moore Ranch, both owned by Uranium Energy, have an annual licensed production capacity of 2 million and 3 million pounds, respectively. Neither of these have been constructed.

Nichols Ranch, owned by Energy Fuels, has a production capacity of 2 million pounds a year, and it's currently on standby.

Lance-Ross in western Crook County, owned by Peninsula and Strata, is expected to resume commercial operations in late 2024 or 2025, pending the expansion of a processing plant. This operation has a capacity of 3 million pounds per year.

In Wyoming, there are 24 uranium projects currently in the exploration or planning stages, including three in Crook County and four in southwestern Campbell County.

BWX Technologies is a Virginia-based company that is looking to build up a supply chain in Wyoming for nuclear micro reactors. It recently held a workshop with vendors in northeast Wyoming and will be going around the rest of the state this year.

Costs and supply chain issues remain big obstacles for the domestic uranium industry, but in Wyoming, it's specifically reliant on the price of uranium, which is driven by the demand for it.

"As local and global demand grows, so will Wyoming's uranium industry," the report reads.