NUCLEAR FUEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00303R000500700037-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 14
• Document Creation Date: January 4, 2017
• Document Release Date: April 10, 2008
• Sequence Number: 37
• Publication Date: November 9, 1981
• Content Type: OPEN SOURCE

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eirol
c Nuclear
e en ii
. 1
HIGHLIGHTS
A biweekly report from the editors of Nueloanios Week
VEPCO'S PURCHASE OF 400,000 LAM
at about $2430 each is seen u a sign that
the market has bottomed out ? at least in
Vepco's eyes ? Page 2
EDF samples Exxon's wares ? page 2
Swiss circumvent Canadian embargo
? Page 3
Marline hits mart in Virgbila ? page 4
Ranchers may go to madret for 1.5-ndilion
pounds next year ? Page 4
Cogema shops U.S. utility stores ? page 5
Conoco sees no futon in conventional
mining ? Pate 6
Wyoming may amend reclamation law
?page 7
IMPORT LIMITS AND HIGHER TAILS
assays at DOE enrichment plants are
sought by US. miners ?page 8
JAPAN DOESN'T WANT IAEA INSPEC-
TORS inside the cascade halls of its centri-
fuge enrichment plant, but other partici-
pants in tha"heirapartitie poup aren't
sure remote monitors would provide ade-
quate safeguards ? PIP 9
MK seen moving to license a repocadng
plant in dais& ? Paget 10
DOE SAYS GapIS THREATENED by a
Senate bill which could &lie contractors
away from the often-delayed gal centrifuge
enrichment plant . . . pap 12
. . . but the bill contains good news on
NRC regulations for some uranium
millers ? Page 13
Vol. 6, No. 2$ ? November 9,1981
U.S. UTILITIES COME OUT HARD
AGAINST URANIUM IMPORT BARS
The Edison Electric Institute is fighting tri aloid any stiffening
or rehnpoaidon of the embargo on use of foreign uranium in U.S.
reactors, contending that it would hurt, rather than help, the domestic
uranium industry by making nuclear power economically less attractive
to utilities. An embargo or continued restriction on how much foreign
uranium may be enriched in the U.S. for use in US. reactors would
only lead to "unnecessarily higher costs of nuclear-generated elec-
tricity," BE! said.
In a letter to Sen. Pete Domenici (R-N.M,), John Kearney, a
senior vice president at BE!, said that based on the planned lifting by
1984 of any restrictions on the use Of foreign laud= in US. reactors
"many electric utilities operating nuclear old long-term con-
tracts with foreign uranium producers and are to deliver
greater amounts of foreign uranium for in the future. Due
to the condition of the market, an embugo at T time will not km-
mediately help domestic producers., In the loogar the result will
be artificially higher uranium prices which will iansoessarily raise the
cost of electricity produced by nuclear snarly a cost that will be
passed on to consumers.
"Generally speaking," he said, "the electric utilities take the
position that there is nothing wrong with tired utankun indus-
try that a healthy utility industry will not Unnecessarily higher
costs of nuclear-generated electricitY will the President's
plan to increase the use of nuclear energy and the nuclear
Industry"
Thaletter concluded: "We most urgentlY lapest that you do
not take any action that might affect t:trazo*otemarket until the
(Senate Energy & Natural Resources) e (on Energy Re-
search & Development) can develop a full no* anthe subject by
receiving information from the electric Wake '
NRC FAULTS TOKAI AGREEMEWr
ON SAFEGUARDS AND PLUTON'
Despite last-minute objection' from
signed a new agreement permitting rex
? fuel through 1984 at Japan's 210-tonne/yea
Mora.
DELETIONS
RANSFERS
S. officials Oct. 31
of VS.-origin spent
?plant at Tokai
The agreement was unveiled Oct. 29, at 4 before the
:House Foreign Affairs SubcomgAtteaon Economic Pol-
icy & Ttade.'Unlike earlier asteementeitthick the amount of
fuel to bereprocessed (Nr, 20 kir, IS), the thatipsetpetadas oper-
ation of the plant at its full capacity. And to die chagrin of the NRC
commissioners, it also lacks statements on safelnuts and retransfers
which earlier agreements contained.
NRC has several concerns with the new pact, NRC Chairman
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Nunzio Palladino told the subcommittee. Several technical is-
sues regarding safeguards at the facility are unresolved, he said.
"The commission would have preferred a more comprehensive
analysis by DOE of the technical effectiveness of safeguards
issues," he said, urging that "vigorous efforts be made to re-
solve these issues before reaching agreement with Japan on
a permanent solution to the reprocessing question."
Also, Palladino continued, the agreement should have re-
tained "the statement that no determination was being made as
to whether safeguards can be effectively applied to Purex re-
processing plants." This statement is necessary, he said, "to
avoid future misunderstandings with Japan or other countries
with which we have agreements which require joint determina-
tions before reprocessing." The statement "was removed from
the agreement during the most recent negotiations," he said.
And the agreement is ambiguous on end use of separated
plutonium, Palladino said. The agreement says simply that Japan
"intends" to use the mixed-oxide fuel obtained from Tokai in
its fast breeder and advanced reactor research and development
programs; the statement that the fuel "will be used exclusively"
in those programs, which was part of the original agreement
signed in September 1977, was dropped. "This is of concern
because the commission has relied in part on the previous lang-
uage for assurance against retransfers outside of Japan of plu-
tonium separated by Tokai Mura," Palladino said. "An expli-
cit retransfer pledge (should) be secured as part of the perma-
nent solution."
"Japan could not use this plutonium for any other pur-
pose without first consulting with the US. This point has been
made explicitly to them," the State Department's Harry Mar-
shall told the subcommittee. The new agreement, Marshall con-
tinued, "acknowledges, but does not give an approval for, Jap-
anese plans to proceed with a commercial-scale reprocessing
plant. In this regard, Japan will exchange views with us as plans
for the plant evolve. We expect them to design the facility to
optimize the IAEA's ability to apply safeguards effectively."
Marshall stressed that the new agreement "does not con-
stitute any determination as to whether safeguards can be ef-
fectively applied to the planned Japanese commercial-scale re-
processing plant." A consortium of about 100 Japanese com-
panies have formed the Japanese Nuclear Fuel Service Co. Ltd.
to build an 1,100-tonne/year plant by 1990 (NF, 19 Jan., 1).
"We recognize that the safeguards at Tokai Mura and
elsewhere require continued improvement," Marshall contin-
ued. "Safeguarding reprocessing plants is not an easy task. .. .
It is vitally important that effective and efficient means of safe-
guarding such facilities be developed and put into use by the
IAEA. Thus, it is fortunate that Japan has operated the Tokai
facility as essentially a test bed or laboratory for developing
more effective and efficient techniques that may be applied in
safeguarding reprocessing plants."
Asked whether the Reagan Administration plans to use
its right of prior consent as leverage to encourage countries to
cooperate with U.S. nonproliferation goals, Marshall responded
that "while the US. may possess some leverage in exercising
its consent rights, it is easy to overstate its importance... . The
supplier nations with whom we trade in nuclear commerce in-
clude our most valued friends and allies in the world. They
fully share our concern about nuclear proliferation. They may,
however, take somewhat different approaches to the same end.
Using the leverage provided by retransfer consent rights on a
2 ? NuclearFuel ? November 9, 1981
case-by-case basis to coerce nations into meeting our nonpro-
liferation conditions will rarely be effective."
? Michael Knapik, Washington
THE PRICE OF REPROCESSING HAS SOARED at Tokai
Mura. For the first 99 tonnes of spent fuel reprocessed at the
210-tonne/year pilot plant, Japan's Power Reactor & Nuclear
Fuel Development Corp. charged its six clients a fee of 80-
million yen/tonne (about $350,000/tonne). The next 200 ton-
nes will cost 135-million yen (about $590,000) each to repro-
cess, however, as PNC aims to deliver a commercial-quality
service and intends to recover its plant's construction and op-
erating costs. And that 200 tonnes is all the reprocessing PNC
will try to do through October 1983 despite an okay from the
Reagan Administration to work U.S.-origin material to the
plant's full capacity through 1984.
TOKAI MURA'S FIRST MIXED-OXIDE FUEL ASSEMBLIES
have been loaded into the 165-Mw Fugen prototype heavy-
water reactor at Tsuruga and should begin producing power
this month. Japan's Power Reactor & Nuclear Fuel Develop-
ment Corp. fabricated the 44 fuel bundles using plutonium
recovered at its pilot reprocessing plant at Tokai.
VEPCO BUYS ON SPOT AT NEAR $24.50 A POUND
The Virginia Electric & Power Co. (Vepco) has accepted
an offer by a U.S. utility for 400,000 pounds of U308 at a
price close to $24.50 at the time of delivery next March and
May, knowledgeable sources told NuclearFuel. The award was
only recently made known and followed by just a few weeks
the bid invitation. It is subject to negotiations and contract
signing.
The transaction is a positive sign, according to one source,
because it "indicates to me that Vepco thinks the Nuexco (spot)
price will be higher than what they agreed to pay (at the time
of deliveries). The alternative would have been to wait if they
thought they could get a better deal." Another source disputed
that assessment because he said Vepco had signed other spot
market contracts in the recent past. However, he added that
with the spot price having remained at $23.50 for the past
four months, "the market looks very stable. The longer it
stays at $23.50, the more it suggests we've reached the bot-
tom ... and it's got to stop going down before it goes up."
But he added that he felt it would be quite a while before the
price goes up "on a real (dollar) basis." ? Stephanie Cooke
EDF ORDERS EXXON TEST FUEL ASSEMBLIES
IN SECOND STEP TO DIVERSIFY SUPPLY
Electricite de France has bought four fuel elements from
Exxon Nuclear in what an EDF official said is furtherance of
the utility's interest in diversifying its sources of fuel supply.
Societe Franco-Belge de Fabrication de Combustibles (FBFC)
now makes nearly all PWR fuel for France, but West Germany's
RBU has started delivering reload batches whose order followed
upon a trial contract similar to Exxon's.
The EDF official said it is not possible to foresee whether
still other fabricators might one day represent a significant
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share of French supply. He said the decision to buy from Ex-
xon is aimed at examining other fuel element technologies.
"If you have been used to driving a Citroen and you want to
try a Renault, you begin by buying one," said the official.
EDF began this diversification program about two years
ago when it ordered through Kraftwerk Union four "precUr-
sor" fuel assemblies to be fabricated by the KWU-Nukem sub.,
sidiary Reaktor-Brennelement Unit* (RBU). These were de-
livered in May 1980 and tested intone of the Bugey reactors.
Subsequently, EDF ordered 13 reload batches (of 52 fuel
elements each) from ICWU, for Bugey-3 and -Sand for St.
Laurent-des-Eaux B-1 and -2. The first of these was delivered
earlier this year, the second will follow next month, the third
one early in 1982, and so on.
Exxon has no commitment from EDF for any Net be-
yond these first four assemblies, which are scheduled for de-
livery hi 1983. An EDF source said the EaX011 fuel has lane'
what different pellets and assembly design than what EDF is
used to and also has a "demountable" feature which permits
easy access to the fuel.
The EDF official said the contracts with Exxon and KWU
should be seen as part of French policy to diversify energy
sources in as many ways as poasible. He declined to indicate
if other such contracts are being negotiated. A source said EIN
was interested in "keeping a low profile" on this particular
diversification, which takes a bit of business away from a
majority French-held company.
SWISS END RUN OF CANADA'S EMBARGO IS SEEN
AS PERFECTLY LEGAL AND LEGITIMATE'
A Swiss utility was able to circumvent Canada's embargo
on uranium shipments to Switzerland by arranging a swap:
through a US. producer whose mill is 20% owned by the util-
ity. With the transaction about 70% complete, Swiss sources
disclosed that KIM (Kernkraftwedte)GoeSges-Dannilan sign-
ed a contract early this year allowing Gulf Minerals Canada
Ltd. to trade 800,000 pounds of Canadian produced U308
with an equivalent amount produced in the US. by Energy
Fuels of Denver.
The contract, to which Eldorado Nuclear is a party, en-
abled the Gulf uranium to be shipped to the US. without up-
grading in Canada, which normally would be required. It also
enabled the equivalent amount of U.S. uranium to be sent to
. Canada for conversion and returned to the U.S. for enrich-
ment, with the final destination Switzerland.
Sources say there was nothing unusual in the transac-
tion. "It was a very simple transaction," said one. In fact,
since the embargo took effect in 1977, about half the tonnage
owed by Canadian producers to Swiss utilities (totaling about
1,950 tons) has been traded to buyers in countries who agreed
to the safeguards provisions announced by Canada in 1974.
Orders for some 900 tons were terminated by mutual agree-
ment (NF, 11 May, 11), according to Canadian government
sources.
A Canadian source was surprised that terms of the trans-
action were disclosed and wondered if it was for the purpose
of embarrassing Canada. There is a dilemma, he added, because
"Canada's reliability as a trading partner has been undermined
because of the embargo.
"It's all perfectly legal and legiliMate," he added. Can-
ada's requirement for converting Canithen-oright material at
Eldorado was satisfied because the amount of U308 sent to
" govente
the US. was replaced by .4. equivalent? amount from the US.,
he said. At the same time, the . t's safeguards embar-
go was legally satisfied because the c Version of the U.S. uran-
ium was ordered by Energy Fuels ortbehilf of the Swiss, and
the US. and Canada have an agreement ior cooperation on nu-
clear safeguards.
"Conversion per se doesn't Wrest safeguards," he said.
While the swap might be construed as In "end run," he added,
as far as Canada is concerned the uranium "hasn't gone to a
country with whom it doean't have a lifeguards agreement."
The 800,000 pound* destined fne the 970-Mw Goesgen-
Daeniken nuclear power plant is scheduled for fabrication in
West"Germany and will coVer reload** 1983 and 1984. KKW
and Nordostschweizerische Kraftweik (NOK) each own 20%
of Energy Fuels' White Mesa mill in Blaniuing, Utah, an Energy
Fuels source said. '
POOR REPORTS ON RIOTHIORPI
CITED BY ENVIRONMENTAL
The supervising scientist, wa :Over environmental
impacts from uranium mining in tho 11,1 rn Territory, has
criticized local authorities and , Mines Ltd.
In his annual report for 1980481 Fry said the North-
ern Territory administmtio had beenllardy" in providing
six monthly reports to the oordlna. ammittee on the Alli-
gator River Uranium Province. This? had reduced his
role to one of "observing and escort how developments
were affecting the area.
The Northern Territ ry adminiatratien is responsible for
check monitoring and lions and lbs providingMining
approvals to companies. ,
Fry said information Mack au by the Northern
Territory was inadequate, and he Was 'unable to determine
the effectiveness Of regulatOry me
"A major shortcoming of their .11.! b the lack of clear
definition of the authoritiete own ?
and inspeCtion
programs designed to enswie the valkil f the companies'
own monitoring programs and comp by the companies
with Northern Territory laWs." H Fry said his office is
currently holding discussions with N. Territory officials
to rectify this situation.
Fry also said there were deficiencies* the environmental
monitoring and assessment techniqueted by Queensland
Mines and its Nabarlek de I.
Dust levels at the
wear special protective gea, he said, was an unaccept-
able practice "if continued' for long* riods." Dust moni-
toring equipment should alo be located ketter, he said.
Referring to a reportd spill of ester from the operation,
Fry said the company had hot made a prOmpt report on the
Incident, and in addition had made "generally unsatisfactory"
assessments of the significance of 6E00 of contaminated
water. ,
Fry expressed concern at theimakOf radium analysis of
water samples at the 3,0004onneiter-Vear Ranger operation.
He also has asked Queensland Mines *determine the extent
!TORY MINING
'WATCHDOG'
iced workmen to
NucleerFuel ? November 9, 1981 ? 3
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of mercury and arsenic contamination in surface and ground-
water supplies in the area.
GAC SUPPLYING FUEL IN SETTLEMENT WITH l&M
Indiana & Michigan Electric, a subsidiary of American
Electric Power, and General Atomic Co. have ended their six-
year-old dispute over a nuclear fuel supply contract.
According to the utility, GAC agreed to supply the bal-
ance of U308 called for in the original contract ? 655,000
pounds ? and one fabricated reload for the Cook nuclear sta-
tion at Birmingham, Mich. That original contract called for
delivery of 3.4-million pounds of U308 and six fabricated re-
loads. GAC maintained it was excused from fulfilling the con-
tract because of steep increases in the price of uranium and
unavailability of uranium because of GAC's supply dispute
with United Nuclear.
In return for receiving the balance of deliveries at the
contract price, Indiana & Michigan agreed to cancel its claim
to about $16-million in damages previously awarded by a
New Mexico state court against GAC. Another term of the
settlement calls for GAC to waive any bonuses it would have
received for superior fuel performance.
MARLINE FINDING URANIUM IN VIRGINIA
BUT NOT SURE IT HAS COMMERCIAL QUANTITY
Marline Uranium Corp., a subsidiary of the New York-
based Marline Oil Corp., has over the past several months
quietly leased more than 50,000 acres and spent "a little over
$6-million" exploring for uranium in Virginia's Piedmont area,
an informed source says. The company is near having to report
its findings to stockholders and the Securities & Exchange Com-
mission and can't disclose the findings publicly until that is
done, the source says, but Marline has not determined yet
that it holds "commercial quantities."
DOE estimates potential reserves of 11,300 tons U308
in the area, in its $30/1b forward cost category. The area is
broken into three sections. The first, called the Lovington gran-
ite gneiss, is a crystalline rock unit with reserves of some 2,000
tons (in the $30/1b forward cost category) probably set in
a vein type deposit and scattered anywhere from just below
the soil to a depth of 4,500 feet, based on a DOE composite
vein type deposit in the western US.
In addition there are several contact metamorphic zones,
with reserves of 1,000 tons in Paleozoic granite plutons at
depths of 50-450 feet, again based on a composite model of
similar deposits in the western U.S. And finally, and "perhaps
most favorable," according to a DOE source, are five Triassic
basins where sandstone hosts may contain 8,300 tons U308
in the $30/1b forward cost category. Depths in these type de-
posits range from 50-750 feet, averaging about 300 feet, DOE
says.
DNA PEOPLE'S LEGAL SERVICES HAS DROPPED ITS
LAWSUIT demanding a regional environment impact state-
ment on uranium development in the San Juan Basin. The de-
cision was based on an unfavorable ruling by a federal court
last spring and on dramatically decreased uranium activity in
4 ? NuclearFuel ? November 9, 1981
the area. The lawsuit was filed in 1978 by 90 DNA clients who
claimed that the Bureau of Indian Affairs had violated the Na-
tional Environmental Policy Act by failing to prepare an en-
vironmental statement on uranium development on Navajo,
federal, and private land in the area. A federal court ruled
early this year that regional impacts must be considered, but
said site-specific impact statements could include them rather
than requiring a regional statement. Former Interior Secre-
tary Cecil Andrus had successfully argued that the govern-
ment had no coordinated plan for developing uranium in the
region, so no regional statement was necessary.
RANCHERS MAY GO TO MARKET NEXT YEAR
FOR 1.5-MILLION POUNDS THROUGH 1983
Ranchers Exploration & Development Corp. will begin
next year to purchase or lease 1.5-million pounds of U308 to
cover its contracts with Gulf States Utilities and the Taiwan
Power Co., unless the market rebounds to make it economical
to supply the uranium from Ranchers' own holdings.
To date, the utilities have been supplied with uranium
from the Johnny M mine in northwest New Mexico. Johnny M
is jointly owned by Ranchers and the HNG Oil Co., a subsidi-
ary of Houston Natural Gas; Ranchers says "commercial" re-
serves at Johnny M will be exhausted in mid-1982.
To allow Ranchers to supply the uranium from other
sources, the contracts with Gulf States and Taipower were
amended earlier this year. The 1976 agreement with Gulf
States had been for delivery of 3-million pounds of U308 from
Johnny M. As of June 30, the end of Ranchers' fiscal year 1981,
2.75-million pounds had been delivered. The average price dur-
ing FY-81 was $33/pound. In the amended agreement, delivery
of the remaining 245,000 pounds is deferred until 1984, a new
minimum price ? about $45/pound ? is established, and Ranch-
ers is allowed to obtain the uranium from any source.
The original contract with Taipower was signed Oct. 2,
1979 and called for total deliveries through 1983 of 2,002,000
pounds of U308. Deliveries started this year at a rate of about
60,000 pounds/month. Before the contract was amended, the
price was $40/pound. Under the amendment the minimum
price for the remainder of 1981 is $37/pound; for 1982,
$38/pound; and for 1983, $39/pound. Ranchers says that
based on the estimated remaining recoverable reserves at the
Johnny M mine, about 1,250,000 of yellowcake will be ob-
tained from other sources to fulfill the contract.
Mid-1982 will also bring an end to uranium exploration
by Ranchers, which has been prospecting for uranium since the
mid-1960s. Last year the company drilled about 100,000 feet
seeking uranium in New Mexico and Colorado.
The company also expects mid-1982 to mark the open-
ing of the trial and its suit against Kerr-McGee. Although Ranch-
ers received almost $2.5-million in royalties from Kerr-McGee
last year, Ranchers wants a court to sort out the royalty provi-
sions in the lease of its Ambrosia Lake holdings.
An end to that suit and fulfillment of its contracts with
Gulf States and Taipower may well mark the end of Ranchers'
uranium business. The company has stockpiled 163,000 tons
of ore with an average U308 content of about 0.09%. The ore
came from the Small Fry mine near Moab, Utah. Mining ceased
there in August 1978 and Ranchers says it will not be resumed
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nor milling arrangements found for the 'stockpiled ore"uniess
there is an improvement hi Uranium pritea."'Alid the' Hope mine
in northwest New Mexico; owned jointly, by Ranchers andehg.
co Energy, was shut down In hiCatisaltseecatmage reierSee
were exhausted, Ranchers flys.'
COMMA SHOPS U.S. UTILITY STORES
Cogema is shopping among US. utilities for low-priced
uranium (either as U308 or UF6) and hopes to have some con-
tracts signed by the end of the year, sour as say:biegotilithrs ?
are being handled by Niunatec, the Washingtenbeied North'
American
American representative for Cogema, Eurodif and otherfkindi
nuclear companies.
Although material bought in the U.S. may be used to
fulfill a DOE enrichment contract that predates Eurodif, one
source guessed that the buying was part of an overall strategy
that includes stockpiling. Th strategy May be similar to It*
France handled coal purchasing; he Said,. "They bought very
smartly" when prices were low, and then started buying into
U.S. coal ventures as prices started to rite. "You look for pa
terns in these things," he said. see one there ? poteni
at least." The cost of stockpiling may not be as much a Con-
sideration for Cogema as it is for a private utility'bealUse of he
ability to get either government guaranteed loans or direct
money, he added.
Cogema would not comment on its strategy. But One
source knowledgeable of its activities said Nurnatec has been
querying US. utilities for the past six months and planned
on buying all it wants by gie middle of neatt 'year. A key to
how long the current spot market OilmitiOn, laat, he aeld,
Is interest rates. "One of the Moe* tfeadstiis the eiMenee
of holding. If interest retell go down,. they'd (Utilides)jilit' ?
sit on it. They're being pushed into the market now beelike of
the cost of money." ?
In addition to taking advantage of the current excess In-
ventory and low Mali sources my Numeteo hopes to create .
a customer base for Enrodif hy ,,Wkving utilities of excess in-
ventory. "If Numatec can buy materiel at the Num? price and
at the same time be of some service to a utility, why norilt
may be good for some future cuitr relations," saM soMe.
Eurodif, however, has so far been unable to penetrate the VS.-
market and its chances for doing it are generally viewed ei slini.
SILENCE HALTS TRADE IN RANCHERS STOCK
"Although we am continuing to have discumimas about ,
a sale, we would prefer to sell when the price of silver and our
earnings move up," a ipokemen for Ranchers ExplomtionA
Development told NuclearFuel Oct. 31. The following Monday,
uncertainty about prospects for sale of the company to in
overload of sell orders which in turn led the American Stock
Exchange to suspend tading in Ranchers stock; that prompted
Ranchers to say that completion of a sale has been delayed by
the increasing value Of its Escalante lbw mine Ine0Othaaelt
Utah. That increase was, not the Mutt of *int silver Prices,
however, but of sitillinguthich hausased Ranchers' maw* of,
Escalante reserves about 40% to 33-milliop ounceeo(Aither.
"We do not believe it to beta the best iAtel414 of our
stiarelviders to rush sale
velopnients," said Meade
the eicact liming or ou
tive bu'Yers," said
move'forwind With these
That was enough to lift
In April, Ranchers
selling after First
pany, had acquired 21 650
carnelian stock at about 322/iblia
the company an investmentiacoldief
ently undervalued mine opera
coilipany's own captive end,
sit* offitial, that
25-50% Of Iandhers St
* 'Ranchers
comPiny was for ate,
made "to prevent the
Since Ranchers' April
moved to increase its
guirehcaldets it ik cong
hold Its Ciiireirt Ohara;
trictiVi offer; or additg
whit develops before
The Escalante
next year, when Ran will
in its development. For i fhiCal
Ranchers reported a pretax profit of
$7.1-million for the preceding year.
him operations, which
million on)iiesof $12
on $10-million insides Oteir
With aide in the Offing,
u565/share int the put yeer. tiat the
was at about $41/shareregten
at $31.75/share. When tarading
$36/share.
light of these new de-
w, 'cannot predict
with prospec-
will conthme to
other operations."
It was considering.
fertSter Com-
- of the
3 April, 13). "To give
messing, but appa-
ll hedge apinst the
:' add elitist Mula-
tto ownership to
announcing that the
official said was
nibbled tot death."
Mississippi has not
but has told its
: continuing to
he Mikes an at-
om Welting to see
Fire Mailissippi mid.
ch ftill production
about $30-million
ended lime 30,
3 4iiilloil; down from
ex profit from uran-
t gowlyt was S2.7-
SI2inillion
litodc has gone as high
ofOttober it
isuependedit stood
';'ft Went to aboUt
ENERGY FUELS
TO WIN LONG-TERM URANIUM
at/IILLING
market, iobservel
can divide prcoducers in two piles
non-dik takers? ,You the
petitively or you don't any eon
enletift ea onarof a
he saya, because of its
term Key Lake
That willingness
tract for 25%-33% of Y
8-million pounds U308
lime remainder or most o
filled from either one or
Exploration & Mining L
"Ours is a mar
Fuels:owe about the
"If you know the C
contracts wehm. They!,M. pib
:Tbe cciAtrirAs are 2041
parties should the price ge too
nab*, !`yon
risk takes" and the
Pis and bid corn-
" Enemy Fuck is
in the Ant category,
the type of flexible
offering.
with a long-term con-
Secogresneato for 7- to
sources nay,
Is expected to be
to (Uranerz
o Nuclear).
lays an Energy
tly made to utilities.
know the type of
NuckarFuel ? November 9,1981 ?5
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Approved For Release 2008/04/10: CIA-RDP86T00303R000500700037-2
sources say. "You can almost bet your bottom dollar pro-
ducers are offering backout clauses in return for being able
to deliver from anywhere. If the price goes up, then they're
in," says a knowledgeable source. The Energy Fuels source
acknowledges that contracts his firm is willing to offer con-
tain "some escapes if prices go too low."
"They're locked in if it goes too high," he says, but
force majeure provisions would provide escape for the buyer
in some cases, such as if a plant doesn't go on-stream. Essen-
tially, however, if the utility needs the uranium and the price
has risen at the time of delivery, "what are they going to do?
Everyone else will be high."
The approach Energy Fuels appears to endorse has been
criticized by other U.S. producers as "noncontracts" because
of the escape clauses. One producer told NuclearFuel recently
that while "we are not against escape clauses. .. the kinds of
escape clauses that we've seen being discussed ... are I think
a cop-out rather than a solution" because "both buyers and
sellers require firm assurance of delivery commitments" (NF,
12 Oct., 9).
The Energy Fuels source acknowledges the contracts
are "probably not to a producer's advantage because of the
fact you could be selling below your production cost." There
"really is no floor" and the contracts contain "conditions for
discounts," he adds. But the betting at least as far as Energy
Fuels is concerned is that prices won't go much lower. And,
adds the source, "as soon as this inventory gets soaked up it'll
be a different situation."
PROSPECTING ISN'T WORTHWHILE TO CONOCO
IF IT LEADS TO CONVENTIONAL MINING
"By mid-1982 and probably before, we will have closed
every conventional facility we have whether we were in pro-
duction, development or early planning. We will have left one
100%-owned in-situ project in South Texas." That is the out-
look of Conoco Inc. as expressed by a knowledgeable Conoco
source. Conoco also will retain its 25% share in the Benavides
in-situ project in Duval County, Texas, he said, but there are
no plans for further conventional uranium production in the
U.S.
Without any long-range contracts, "what we're doing
right now is simply to look for that part of the business that
money can be made in or get out." That means that in 1982
exploration in the U.S. will be severely curtailed and empha-
sis will be on areas "susceptible to in-situ," he said. Explora-
tion in Niger will continue "at least for the immediate future."
Conoco's entry to the uranium market was "kind of
late," the source said, and while its reserve position is strong
the "economics are such that none of our conventional mines
will stand at today's prices with a reasonable rate of return."
In-situ mining is the only possible attraction for future produc-
tion at this point because capital costs are "much much small-
er than capital costs associated with conventional mines." So
some pilot plant work will continue at the Ruby Ranch and
Borrego Pass in-situ projects, in Wyoming and New Mexico,
respectively, although "we haven't even determined whether
these are economic," he said.
The Trevino project, which started operating in early
October, is expected to produce about 475,000 pounds per
year, with full production rate reached by the end of this year.
6 ? NuclearFuel ? November 9, 1981
With about one-quarter's worth of production from the Con-
quista mine and mill (before it closes in the spring) and a small
amount from Benavides, total production next year should be
on the order of 600,000-700,000 pounds U308.
Like so many other U.S. producers, Conoco sees its fu-
ture in uranium as a year-to-year proposition. "If the long haul
gets to be too long it doesn't make sense for Conoco to go on,"
said the source.
At the same time, however, the company intends to
maintain its reserves, which in 1980 were estimated to be 61-
million pounds in the U.S. and 32-million pounds in Niger.
Conoco's last long-term contract, for five years with the
Tennessee Valley Authority, ended in 1980 and "it didn't
turn out to be a profitable contract" with prices "well below
$20," said the source. "We did not enter into additional long-
range contracts for the simple reason that the price started
going down."
The company also halted construction of the Crown-
point, N.M. project, a joint venture with Wyoming Mineral
Corp., earlier this year (NF, 30 March, 3); announced it would
suspend operations at the Conquista project in Texas by next
spring and drastically cut production there this year; and in-
definitely deferred the Moore Ranch project in Wyoming, a
joint venture with Kerr-McGee. Conoco holds a two-thirds
share in Conquista, with the other third held by Pioneer
Nuclear.
"What we did is cut back in anything that leads to con-
ventional mining in the U.S.," said the source. "Secondly, we're
cutting back in exploration in those areas where it would lead
to conventional mining." The old mining districts in New Mex-
ico, Wyoming, Colorado and Utah "are too mature" for fur-
ther exploration under today's market conditions, he said.
Conoco has been laying off workers, mostly miners, since
about a year ago. Of a total 750 of them, only about 150 are
expected to remain by next spring.
URI PLANS IN-SITU MINING IN WYOMING
Uranium Resources Inc., operator of two in-situ mines
near Bruni, Texas, is expanding operations to Wyoming with
an in-situ r&d project 13 miles northwest of Douglas. The com-
pany says it plans to begin leaching around Feb. 1, 1982 on
the property designated as the North Platte Project. The five-
well experiment, injecting 20 gallons per minute of leaching
solution, will run for about 60 days to obtain data and experi-
ence for a commercial plant.
After the experimental leaching, the research and devel-
opment operation will be closed and the 36 acres restored. Up-
on satisfactory completion of reclamation, the company will
apply to NRC and the Wyoming Department of Environmental
Quality for commercial licenses to operate a facility planned
to produce between 300,000 and 500,000 pounds of uranium
oxide annually.
Mark Pelizza, URI environmental manager, said the com-
pany will begin next summer gathering environmental base-
line data for the commercial permit applications. "We expect
to apply for the licenses in early 1983 and would plan to begin
commercial operations in early 1984 depending upon market
conditions," Pelizza said.
URI has defined an ore deposit that is amenable to leach-
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Approved For Release 2008/04/10:
ing at a depth of 570-600 feet in the Fort Union Formation,
Pelizza said. The deposit lain the southern section of the Po*
der River Basin. URI holds right* tome* than 300 acres in
the area and is conducting exploration drilling for a posedble
second in-situ mine.
URI, a subsidiary of Nucorp Energy Inc. of Satt Diego
Calif., operates the Benevides and in-situ mines near
Bruni, and did the engineering * for Mother Iwsltu
mine operated in the Bruni district by Tenneco.
,
SOUTH DAKOTA MAY DROP REQUIREMENT
OF PERMITS FOR URANIUM EXPLORATION
CIA-RDP86T00303R000500700037-2
Exploration for uranium could proceed without a state
permit under a measure tentativ,ely approved Oct. 29 by, a
South Dakota legislative, committee. The Interim Mining Coin?
, .
mittee endorsed the measure despite objections brsome com-
mittee members who thought hearings should be Itehl before
permitting exploration.
The committee will take a final vote on the meows later
this month when it meets to give final consideration to-pro-
posed revisions of the state's midis, milling and mineral ex-
ploration laws. The 'requirement of !exploration permits can't
be eliminated, however, unless the Rill State legislature approves
the plan.
Exploration permits are now required under South Da*
kota law, but public hearings are held only if the stateltifire.
ends & Environment Board decides they are needed. Therpro-
posal under consideration by the committee would allow a
company to explore after it notified the state; promised to re-
pair any damage, and cleared its plan with state SIMMS to maks
sure the exploration wouldn't harm rare animals or archeologi-
cal sites.
An alternative proposal to require permits and public
hearings for uranium exploration failed on a close vote, mean-
ing the panel might decide later to adopt tougher usinhun ex-
ploration requirements, according tOicontritittee chairman
Sen. Homer Harding.
In other action, the committee endorsed Oct. 30 a Pro-
posal to have state mining permits Cover SitY milling operations
located at mines.
HEALTH DEPARTMENTS INTERPRETATION OP LAW-
. MAY MOOT LITIGATION OVER CANON CITYKIILL
A tangled legal dispute over whether the Cotter Corp. .
needs a water-discharge permit for Its Cation City tuaniunt ash
may be unraveled by rulings of the Colorado &Verne Court
and the Colorado Department of Health.
Three conservation groups are appealing to the high
court decisions denying them standing to bring a suit against
Cotter and the Health Department's Water Quality Control
Division which had claimed totter did not need a permit. At
the same time, the Health Department Is deciding how to in-
terpret a law adopted by the 1981 Leghlattere that may makt
the litigation moot.
The conservationists' suit was filed under a water-quality
law which may be tuperseded bithe 1981 statute thine*
law does not require a company to obtain I water-din:ha*
permit if the Health Departinent detennisees that the state's
ty protection equi-
in the old law.
rmination.
ala last month
to conduct el new
' a water-discharge
that Cotter did
Rick Griffith says
district court until
issue.
for the conserve-
to the State Sti-
e Federation, the
for Safe Energy had
held that the groups
law did not specifi-
t to bring suits, but
.Phillips says her
courts overlooked
0 a statute does not
. . . the APA clear-
Radiation Control Act pro
valent to or more stringent
The department has not ye
Meanwhile, the Color
ordered the Pate District Court Of
hearing to deter nine whether COtt
permit. The district court had ori
noi. However, Assistant Attorney Ge
there will not be any furthr action *
the Health Department aet9es the ,
And meanwhile, Pa
don groups, says she is preparing a
preme Court contending th National
ColOtado Wildlife .Fderat14n and Cit
straiding to file the suit. Th appeals
lacked standing because the water-q
cally provide private orgadontth
reserved that right to pub agencies
groups contend that the district and
the Administrative Procedures Act.
provide right of action WI a private
ly does," she says.
WYOMING LEGISI.ATURE v fa!
TOAMEND STATUTE , REC
Wyoming's. depressed npiog
uranium and coal Vedette, will 100 the
hearing in Riverton Dec. 4. "We're
whole broad picture," said nate Sof
chairman of the joint legislative
duct the inquiry. "The big problem-wet
the question: When do you begin ,fine4
the mines have interim redamadost
mine is active. The problem that's?
down of some mines became of
Peck said the state's Departsnena
th' has interpreted a tethfc
dentition of mined land.
pletely silent on a suspend or ,
"I personally think we nee4 a stadeto
think we need a regulatory change."
Peck said the situation is nag
to mining companies right at the time
ficulty. Even the governor tays i
panics fill the pits back up beCalall
sometime in the future."
The mining industry, Peck co
uniquely compared with other
companies don't have to remove their
the land back to grass just because th
business."
While the severest impact Is on
Peck said, "there's conside
too." About 2,000 want
ming during the past 18
Peck said the conuni
on the industry as a whole
panics, other heethless
especially the
t of a legislative
o take a look at the
Peck (R-Riverton),
use nantedio con-
right now is
reclamation? All
the time the
ts from the shut-
oonditions."
vironmantal Qual-
vat as requiring re-
lutes are corn-
mine," said Peck.
but others
"tremendous costs
are in financial dif-
o luive the com-
bs stifling up
, "is being treated
In Detroit, the auto
inbly lines and put
aa slowdown in that
'UM industry,
the coal industry
n laid off in Wyo-
t a precise 'reading
mid mining corn-
tal groups and the
1VitelearFuel ? November 9, 1981 ? 7
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public at large are being asked to present testimony before the
subcommittee.
Recommendations will be prepared by Peck's group for
consideration by the Legislature's Joint Mines, Minerals & De-
velopment Committee which will meet sometime in January.
This panel will determine whether to ask the Legislature con-
vening Feb. 9, 1982 to revise statutes on reclamation or whe-
ther to seek revision of regulations by the DEQ.
? Frank Pitman, Denver
U.S. MINERS PLUMP FOR IMPORT LIMITS
AND HIGHER ENRICHMENT TAILS ASSAYS
Although some doubt that Congress will act, U.S. uran-
ium companies continue to plump for import limits and changes
in DOE enrichment policies. Most recently, a dozen companies
have urged Congress to tell DOE to amend its enrichment cri-
teria to limit to 20% the fraction of foreign feed a U.S. utility
may have enriched by DOE for use in a U.S. reactor, and to
liberalize its variable tails policy.
The effects of such changes, the companies tell Sen. Pete
Domenici (R-N.M.), should be "early and salutary," and may
even save utilities some money.
Domenici, who last year introduced a bill to limit uran-
ium imports, chairs the Senate Energy & Natural Resources
Subcommittee on Energy Research & Development. Although
the subcommittee held hearings in September on the viability
of the U.S. uranium industry (NF, 12 Oct., 4), Domenici is
unlikely to push a new bill to restrict imports except as a "sig-
nal" to foreign suppliers that the U.S. is prepared to protect
that industry.
A signal isn't enough for the 12 companies ? Atlas Corp.,
Cobb Resources Corp., Everest Minerals Corp., Homestake Min-
ing Co., Kerr-McGee Corp., New Mexico & Arizona Land Co.,
Ogle Petroleum Inc., Pioneer Nuclear Inc., Rocky Mountain
Energy Co., Spider Rock Mining Co., Uranium Resources Inc.,
and Western Nuclear Inc. ? who followed up that hearing with
a letter to Domenici late last month. Real policy changes are
needed, those companies believe.
DOE "need not exempt or 'grandfather' existing enrich-
ment or uranium supply contracts" when limiting foreign feed,
the companies said, "because: DOE estimates that less than
15% of total U.S. requirements are being met by foreign mater-
ial; and foreign supply excesses of individual utilities can be
swapped for domestic source material so as to bring each utility
within the 20% limit.
"Because of the relatively long contracting and production
planning horizons," they concluded, "such a policy will have an
early and salutary effect on U.S. contracting activity and develop-
ment projects. This in turn will help vitalize the industry."
The companies also urged that DOE enrichment custo-
mers with requirements and long-term fixed-commitment con-
tracts be allowed, without penalty, to choose the tails assay
at which they want their material enriched. "Under present
market conditions, adoption of this policy is likely to lead to
an increase in uranium demand and a decline in enrichment
purchased." Only DOE customers with adjustable fixed-com-
mitment contracts may now vary enrichment tails.
"Enriched uranium presently held in DOE inventories
(as a result of the split-tails program) produced at tails above
the 0.20% standard transaction assay should be sold on the
8 ? NuclearFuel ? November 9, 1981
: CIA-RDP86T00303R000500700037-2
basis of actual operational tails," the companies continued.
This change "should reduce fuel costs to the utilities because
the increase in their feed costs should be more than offset by
a reduction in enrichment charges."
Also, the companies concluded, "the vitality of our uran-
ium producing industry and the nuclear industry as a whole
cannot be assured without major governmental initiatives to
encourage the use of nuclear power and to free the industry
from the shackles of misguided overregulation.. .. The poli-
cies we have endorsed, if accompanied by such regulatory re-
form, should help to establish a viable domestic uranium in-
dustry. We urge their adoption either by legislation or by
executive order."
An official at one of the companies signing the letter,
however, said that any push to re-establish new enrichment
restrictions would have to come from Congress ? something
he says he does not expect to happen this year. DOE officials,
he said, still maintain that the U.S. uranium industry is viable,
and therefore, "we don't expect them to do anything to stop
the phase-out of enrichment limitations."
Among the factors making legislation unlikely ? in this
or any year ? are pressure from the U.S. State Department to
avoid alienating Canada and Australia, and failure of the U.S.
mining community to rally behind its uranium sector. Although
it endorsed variable enrichment tails, the American Mining
Congress at its recent annual meeting in Denver would not
agree to endorse import limits despite an exhortation by
Rocky Mountain Energy's E.A. Lang.
Four federal actions, Lang said, would solve the short-
term problems of the U.S. uranium industry:
? The Department of Energy should immediately amend
existing uranium enrichment criteria by establishing a 20% en-
richment limitation on the amount of foreign uranium a domes-
tic utility could use on an annual basis.
? The Nuclear Regulatory Commission, the Environ-
mental Protection Agency and DOE should review all uranium
policies, regulations and standards which affect domestic min-
ing. Numerous NRC and EPA regulations are "cumbersome and
extremely costly" and provide no added protection to the pub-
lic, he said.
? The Reagan Administration should develop a clear,
positive and consistent policy toward nuclear power in the US.
The federal government should make every effort to send this
signal by expediting nuclear licensing, establishing a federal
nuclear waste program and re-establishing a reprocessing pro-
gram consistent with national needs.
? Current enrichment policy should be amended to in-
crease the tails assay from 0.20% to 0.28%. This would have the
immediate effect of increasing uranium demand by as much as
10-20%. The 0.28% tail "is considered by many to be the opti-
mum based on the present price for enrichment and conver-
sion services."
Lang said he disagreed with a DOE assessment that "the
industry is currently viable." Lang said, "Contrary to the DoE
conclusion, I maintain that the domestic uranium industry is
not viable. Given the dramatic slowdown in U.S. nuclear power
development and the nearly 60% decline of domestic uranium
prices since 1979, it is understandable that the domestic uran-
ium industry has: 1.1aid off over 8,000 of 22,000 workers;
2. limited domestic exploration activities, and 3. significantly
reduced capital expenditures."
Lang said, "While domestic uranium production reached
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peak levels in 1980, it has fallen substantially throughout 1981
and can be expected to drop during the late 198Grand 10901
to levels insufficient to meet total US. requirements."
Current import conunitmentshy US. utilities are rela-
tively low, Lang said. "However," he added, "foreign wantin*.
will assume an increasing share of US. requirements as pres-
sure mounts from consumer advocates and state public utility
commissions to purchatte the lowest-cost uranium available."
He noted that recent discoveries in Canada and Australia "are
very high grade and low cost. Uncommitted, planned produc-
tion from Australia and Canada could supply a total of 15600
tons to the U,nited States in 1990 ? this amount exceeds dom-
estic unfild requirements of only 11,600 tons in that year."
MOUE OF IAEA SAFEGUARDS GETS
SKEPTICAL RECEPTION IN WASHINGTON
A classified paper critical of International Atomic Enerv
Agency (IAEA) safeguards currently is under revieviby officials
in several U.S. agencies. Sources say it was written by an NRC
staff person who worked in the agency's Euratom section three
or four years ago, has expertise in reprocessing safeguards, and
who may have recently left NRC.
"The implication is he felt a need to write it," said one
source. That source questioned the need to designate the report
"secret," however, and said, "We find it interesting the author's
name is deleted." Another source said the report "just seemed
to be grossly out of date," because the author had been "out
of the business for several years. That's why I didn't take it
seriously."
Among the charges in the paper, about 20 pages long,
are that inspectors could be dismissed for reporting violations,
and that Nal and component Minden from facility to facility
outside the US. (for example, in Japan) are not well dam.
mented, sources said. Another charge is that countries with
enrichment plants are not providing information needed for
adequate safeguards.
One source who read the report and is knowledgeable
of the IAEA system said that while there were built-in biases
against reporting violations, it is not tract that an inspector
could be fired for reporting a vitiation. The criticism about
enrichment is "misleading," he said, because enrichment safe-
guards the still under development:However, In said, you
can't "repudiate the whole thing. He's got some points in
there."
Another source said, "I don't believe an Inspector would
lose a job for reporting information." He said that the interface
between impactors and IAEA management had improved a
lot since the paper's author was at the IAEA. "IAEA has its
shortcomings but they're exaggerated in this report." He added
that the report is "nowhere neer as devastating" as the Senate
testimony given by Roger Richter, who resigned in June as an
IAEA inspector. Richtees testimony was more facility-specific
whereas the recent paper concentrates more on the manap-
ment system, he said. "In an international organization it's
much worse than government or private business." But these
are "generic problems . the problems of an agency staffed
by nationals." Several studies on 'IAEA safeguards are under
way, but whether this paper will be used for them is unclear.
"It'll just be sort of absorbed," one source predicted.
STAT
JAPAN EXPECTED TO OPPOSE I
INSIDE CENTRIFUGE CASCADE
Japan is expected to take 'a strong stand this week against
access by safeguards Inspectors to halls at centrifuge
enrichment plants; that potition w hei taken during the first
annual review in Tokyo (Nov. 2-14) nyroject aimed at de-
veloping stronger safeguards for such facilities. Participants in
the "hexapartite safeguard* project" WV another year to mull
over various approaches of they are to inset their goal), but such
a stand by Japan at this pont would nat he surprising, accord-
ing to a U.S. official, since the four cithee countries-involved
with Japan and the IAEA * the pipet the US., the U.K.,
the Netherlands and West Germany ?ilunts so far been reluc-
tant to endorse such accost.
At the same time, hewevte, Ronne those countries ap-
pears ready to reject the idea of accit.eand, in the US. at
least, officials' stiller. vneatlingeeithl yros and cons of ad-
mitting or not admitting iespeaossiti Celoade halls.
The aim of the twoitear pleat itilte develop and facili-
tate. "effective and efficient lifeguards" for use
at centrifuge plants by the lAikela said. The agen-
cy currently monitors feed and at the Almelo
enrichment plant in the it Japans Ningyo
Pass plant, and could do the seine la S. wheathe Ports-
mouth plant starts operating. But Fab* sources say
feed and product measurements 'detect clandestine
development of high within a cascade
hall, especially in a large o ration, herrapartite safe-
guards project was started.
One source noted that the potontill for HEU production
is much greater in centrifuee plants-that* diffusion or nozzle
separation facilities became of the' withwhink cas-
cades in centrifuge plants an be to Increase enrich-
ment. But the project's focus oncentrifup plants
is-because of the IAEA's lack of lather types of facili-
ties, rather than the relatiVe rikof Plants u Proli-
fetators. A U.S. official said , development for
the project could be applied to othee of plants with some
adjustments.
To facilitate HEU detecting
cascade halls, the US. and Japan ho
ton to detect neutron and-gamnse
that would occur if such
monitors could be placed.
1.1.S. officials say that wi
tion it would be difficult
were shielded or othenvian tampered:.
Japan, however, intends to
monitor developed by the Power
velopment Corp. (PNC), and as a fhlt
the monitor to confirm it$ Weed
the monitor placed outside the hall,
who said, "The machine had better
cascades as possible."
US. officials hold the view that
tween strong safeguards, the desire to
costs. The cost of the
to be higher because of the Weal*
meets that would be required
"Both the access an
Inspects, access to
Vs developed moni-
as of thelevel
the halls,
of themicaliespoc-
the monitors
Goa of a neutron
& Nuclear Fuel De-
tente* tea** (of .
apparently wants
to one source,
as far from the
are tradeoffs be-
technology, and
Is generally thought
measuring instru-
d nonaccesneyproaches should be
NuclearFuell ? November 9, 1981 ? 9
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given a thorough technical evaluation," said one U.S. source.
"Probably the preponderance of technical opinion is that the
access solutions or strategies are superior with respect to the
effectiveness and efficiency of safeguards." That doesn't re-
solve the problem of limiting technology transfers, however,
and "that's the basic quandary of hexapartite ? how to have
effective safeguards without making states concerned about
technology transfers either for commercial or proliferation
reasons."
By next November "the goal is to come up with some
sort of an inspection method which would satisfy both the
IAEA and the states involved," said another source. An early
push by the Japanese against the access route is not surprising
when one considers that the US., "which prides itself on being
at the forefront of safeguards, hasn't taken a stand."
Urenco officials would not comment on their involve-
ment in the project other than to say they were lending tech-
nical advice and support. One source said the enrichment con-
sortium was weighing several approaches. Japanese and U.S.
sources said they believe Urenco has not developed remote
monitoring devices for a nonaccess approach, however.
The U.S. program, budgeted for about $2-million/year,
is headed by DOE's Office of Safeguards & Security. Union
Carbide Corp.'s nuclear division at Oak Ridge is coordinating
the project, drawing on services from the Los Alamos, Sandia
and Brookhaven national laboratories. Primary work on the
neutron and gamma ray monitoring devices is being carried out
at Los Alamos, sources said, with some work at Oak Ridge. In
Japan, PNC has undertaken the bulk of safeguards r&d, spend-
ing about $1.5-million in FY-81 (ending March 1982), out of
a total $2.5-million budget.
DOE WARNED SENATE WON'T ALLOW IT TO GET
WEAPONS Pu FROM COMMERCIAL SPENT FUEL
The US. Senate sent "an urgently needed signal to DOE
and the rest of the world," according to Sen. Gary Hart (D-
Colo.), by adopting by voice vote Nov. 4 an amendment to the
energy & water appropriations bill for fiscal 1982 that would
prevent DOE from using any funds to obtain commercial spent
nuclear fuel for use in nuclear weapons.
That signal, said Hart, is that "under no circumstances
will the United States undermine international efforts to halt
the spread of atomic bombs by diverting plutonium from its
own commercial nuclear power program to build nuclear wea-
pons." The amendment would not affect DOE's FY-82 program
because the appropriations bill provides no funds for this pur-
pose. But Hart said that if the Senate did not send a signal
"DOE will begin to base its contingency planning on the avail-
ability of this truly unfortunate proposal, and we will have un-
necessarily and tragically defeated ourselves in the ceaseless
battle against nuclear proliferation."
Sen. Bennett Johnston (D-La.), the Democratic floor
manager of the bill, agreed, saying: "I think the senator makes
a point, that this is no time to let the suspicion creep in that
these funds will be used for that purpose, because paranoia is
rather great in the international nuclear political field. This is
the kind of assurance we can give, which perhaps will help
dampen down some of the paranoia that is sweeping some of
our Nato allies at this time."
DOE officials in congressional testimony have main-
10 ? NuclearFuel ? November 9, 1981
tamed that they are looking at commercial spent fuel as one
of several additional sources of plutonium for the weapons
program. To make use of commercial spent fuel, it would first
have to be reprocessed to obtain plutonium and then the plu-
tonium would have to be purified using a special isotope sepa-
ration technology, expected to be ready in 1987, DOE offi-
cials said.
In a related matter, Hart and Sen. Charles Percy (R-I11.)
introduced a bill, S.1812, Nov. 4 that would prohibit NRC
from licensing the transfer of spent fuel from commercial
power plants to DOE for use in making nuclear weapons un-
less Congress by joint resolution approved such a license.
In the House, Rep. James Weaver (D-Ore.) was success-
ful in getting the Interior & Insular Affairs Subcommittee on
Energy & the Environment to adopt as part of the nuclear
waste bill, HR 3809, now before the full committee, a pro-
vision that would prevent commercial spent fuel from being
transferred to DOE for use in nuclear weapons.
BELGIANS GET 'LAST DEADLINE' FROM EUROCHEMIC
The Eurochemic board of directors late last month granted
Belgium an 18-24 month reprieve in which to decide whether or
not it will take over the Eurochemic plant and resume repro-
cessing at the site in Mol. The facility was to be turned over to
Belgium at the end of this year, but the inability of the Belgian
government to bring the reprocessing question before Parlia-
ment has blocked action (NF, 26 Oct., 7).
The board's decision was unanimous, said an informed
source, but he added that "this is the last deadline" for the
Belgians. Belgium and Eurochemic signed a 1978 accord that
called for transfer of ownership by the end of 1981.
The board remains firmly committed to executing the
1978 agreement, but is now asking the Eurochemic adminis-
tration to reach another agreement with Belgium on the spe-
cific means of transfer to be accomplished within the next
two years. In the interim, Eurochemic will also continue the
medium-level-waste conditioning program at Mol.
DWK SEEN MOVING SOON TO LICENSE
REPROCESSING PLANT IN BAVARIA
Although it continues to talk with U.S. officials about
buying into Allied-General Nuclear Services' Barnwell plant,
West Germany's Deutsche Gesellschaft fuer Wiederaufarbeit-
ung von Kernbrennstoffen mbH (DWK) will probably soon em-
bark upon licensing procedures for a 350-tonne/year reprocess-
ing plant near Schwandorf in Bavaria. Only three days after
the Bavarian state government agreed late last month on site
criteria for a reprocessing plant, DWK announced that Schwan-
dorf looks "basically suitable." Provided that closer examina-
tion of the tentatively chosen location does not produce un-
pleasant surprises, DWK will in early 1982 launch a site suita-
bility procedure which, in case of a positive outcome, would
be followed by a licensing procedure. If all went well, a con-
struction permit could be awarded in the mid-1980s.
Bavaria is the third West German state which has drawn
up site criteria for a reprocessing plant, thereby signalling basic
readiness to house such a project. The other two are Hesse and
Rhineland-Palatinate. DWK has not picked a site yet in Rhine-
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Endure
Mueldeberg
Unhewessr
Isar (Ohu)
Gasmen
Leibstadt
Odunihmtur-1
Ringitah-2
Calvert Cliffs-1
Brunavick-2
Zimmer-1
St. Lude-2
Dresden-2
Zion-1
LaCrosse
Oconee-1
Oconee-2
Oconee-3
TurkeylPoint-4
Monticello
Wolf Creek-1
Cooper
Millstone-3
Sunrusharma-2
Punk Bottom-2
Seabrook-2
Wham
working stock
Switzerland
nape. research'
AVR
Jmess
ressada
Germ=
mdse. research
Sweden
mhc. research
Marble Hil-1
Okras
Exxon
worldng stock
Canadian
mile. research
Browns Ferry-2
Camenchslisak-2
North Anna-2
WNP4 fiolvoF4)
W1414 (Hanford)
Point Beech-1
Kewaunee
?
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land-Palatinate and the location it had selected in Hesse, near
IVethen, was rejected by the Hesse government lad sumnier
for geological reasons; but DWK hopes to be more soccessful
with another dte which it will propose to Hesse authodties
later this month. According to a DWK spokesman, the com-
pany still feels it can meet its original timetable in Hesse, with
start of construction in 1985 Ind completion in 1992 or '93.
Construction cost is estimated it DM 6- toll-billion ft*
a.350-tonne/year plant whose capacity is tentatively planned
to be doubled at a later stage.
LEU TEST SET TO BEGIN AT FORD REACTOR
A full-core demonstration of low-enriched uranium (lett)
fuel is set to begin in several weeks at the University of Michi-
gan's 2-Mwth Ford reactor to see what will happen to the core
and to demonstrate that such fuel can safely be licensed. The
test is part of the US. Reduced Enrichment Research & Test
Reactor (RERTR) program, and will be carried out with fuel
from West Germany's Nukem and Compagnie pour l'Etude et
is Realisation de Combustibles Atoiniques (Cerca), France's
research reactor fuel fabricator.
Complete results on leu fuel-core behavior should be
available in four years, allowing high-density len fuel fabrica-
tion, according to J.L. Snelpove of Argonne National Lebow
tory, who decoded the RERTR program at a recent MBA.
seminar on research reactors in Juelich, West Gorminll- In leis
time, about two years, he said, molts on medium-densitY fuel,
sufficient for many research reactors,should be available.
The Ford experiment is scheduled toll. completed by
March 1982 and analysis of the results should take a year,
Snelgove said. A second full-core demonstration is planned
for late 1983 at the Oak Ridge Reactor (ORR). For this verifi-
cation of a leu core, "a relatively high-powered, high-duty-
factor reactor such as the ORR is needed to efficiently conduct
this demonstration," he said.
Other significant developments in leo fuel also were pre-
sented at Juelich. Cerca reported that it achieved satisfactory
results with a 23-plate fuel element loaded into the Silos reac-
tor at Grenoble in February and removed after six months. The
fuel contained 22 grams per cubic-centimeter of uranium, a
higher density than the approximetely 1.5 g/cc uranium find
elements shiPped to la* by Circa'eadier this year. No fuel
failure was detected during the tests.
Corea director Bernard Savotain told NuclearFuel the
firm is very encouraged by the results at Siloe and sees a "climb
In performance." That means attaining a level of about S g/cc.'
of uranium to bring the enrichment level down to 19.95%, he
said. In 1982, or early 1983, Corea is planning to load elements
containing 32 g/cc uranium into reactors in France, Oak Ridge
and the Netherlands (HFR Petten), COM scientists said at
hielich. Those dements will have U308, while a number of
earlier experiments used uranium-aluminum fuel.
Both Cerca and Nuicem are working on flud elements us-
ing uranium-silicide fuels. This different chemical configura-
tion allows even higher dendties of uranium. Nokomis work-
ing on fabricating full size fuel plates with 43 g/cc of uranium,
and Cana said full size plates "containing up to 6.g/cc of uran-
ium have been successfully fabricated." In addition to its other
deliveries to Oak Ridge, Cerca is preparing two fuel elements
DOE MAJOR ENRICHMENT WORK
SIPTIMMER 111111.
Its vette of
asp. hock Dollars
5,849,921 HEW:
18,884,140 Utak*
30405,930 Euratom
1,821,71 1COD
10,181.71 KIL
2,518,040 OKG
7A44,
22,335,93
2,135,57
13,255
22,2295
387
6,607,5
1.6g A
11,532,07
10,708,5
12,9483
1,510,410
3,872,55
34,009,8
7,091
5,392,4
11,434,3
2,517,683
12,595,350
332.910
23,210
71,610
480,040
275,330
380,490
49,159
171,674
30,963
16,561
92,561
21,160
65,920
187,865
17,946
120,309
202,087
3.524
55.,526.
15,323
104,837
97,350
117,710
13,731
35,205
309,180
64,464
49,022
101,002
21,157
114,505
3,027
211
651
4,364
2,503
3,459
295,953
21,836
2,803
8,559
62,487
2,211
125.221
267,372
363,825
$2.561
_65386
3.361,140
121,109,864
3
P.S.
Pthin
Pi New
P.S. NewHempriske
32.554,830 P.S.
2,404,160
308,330 Itochs**
941,490 Swami'
7,435,953 TVA
243,210 Texas WWI*
WPM.
14.901Z V
29,410,
40,020,7
5,781,711 Who.
775, 1 Wisc. r
65
7,385930.334
Cumnistime to date
for mid-1982 containing the silicide type Biel at 4.8 g/cc
uranium.
Fuel fabrication costs of Is.
the cost of higb-eswiehed =Mum (hat
to another Cava paper, b of the
quired plus refinement and
tinued, coats can be som
operation. Here, using core
10-Mw reactors, Cerca said
as much as double
tion, according
onal uranium re-
the analysis con-
in actual reactor
'for 24iw .and
the performance
Nuolearfliel - November 9, 1981 -11
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of leu elements in terms of cycle life, neutron production rate,
or burnup, costs can be brought down.
For example, if a 23-rod heu fuel element, with 0.68 g/cc
of uranium, has a base price of $100, then a similar sized assem-
bly of uranium silicide composition with 3.59 glee uranium
would cost $147. When considered this way ? in terms of op-
erations rather than just fuel fabrication ? leu costs should
run 40%-50% higher than heu. But he said it is difficult to gen-
eralize and stressed the fuel fabricator and reactor operator must
work closely to take into account the specific criteria of each
reactor.
From the United States, Robert Cheswoth and Gordon
West of General Atomic's Triga reactor division said the final
demonstration of Triga leu is under way at Argonne National
Laboratory and that the firm has "terminated all production
of uranium-zirconium hydride fuel enriched to levels greater
than 20%." Snelgrove of RERTR told the meeting that a co-
operation agreement with Rumania should be signed soon,
allowing for a demonstration of Triga leu fuel elements in the
core of the Rumanian steady-state reactor.
? Douglas Glucroft, Paris
HOUSE REJECTS HEU EXPORT BAN
By a vote of 293 to 100, the House Nov. 5 turned down
an amendment offered by Rep. Edward Markey (D-Mass.) that
would have prohibited the export of uranium enriched to great-
er than 20% U-235. Markey maintained that exporting the fuel
for use in research reactors increases the possibility that the
material could be diverted or stolen to make nuclear bombs.
Rep. Jonathan Bingham (D-N.Y.) opposed the amendment ?
which was offered to NRC's FY-82 authorizations bill ? be-
cause no hearings had been held on it. An aide to Bingham said
the measure was "precipitous," and might needlessly offend
U.S. allies.
GAO CONTINUES TO WEIGH ENRICHMENT PLANS
The General Accounting Office is taking yet another
look at DOE's enrichment business, again with an eye for whe-
ther the Portsmouth gas centrifuge enrichment plant should
be built. This time the study is for Rep. Richard Ottinger (D-
N.Y.) and will focus on various options for supplying enrich-
ment services in the late 1980s and in the 1990s. GAO offi-
cials say they hope to have the report ready in time for hear-
ings that Ottinger, chairman of the House Energy & Water Sub-
committee on Energy Conservation & Power, plans for next
March.
According to GAO officials, the study will examine a
number of questions including whether there is a need to build
both GCEP and a plant using an advanced isotope separation
technology (AIST). In several past reports, GAO has said that
DOE should consider building an AIST plant rather than GCEP
for new increments of enrichment capacity (NF, 25 May; 1).
Building both, though, may be justified, GAO officials now
say, because of the need to retire the high electricity con-
suming gaseous diffusion plants.
On the other hand, GAO officials say, while reducing
power costs by building both may lower swu charges for enrich-
ment customers, such a course of action may not result in sig-
12 ? NuclearFuel ? November 9, 1981
nificantly lower electricity costs for U.S. consumers. Therefore,
the large near-term construction costs of GCEP may not be
justified in DOE's annual budgets, GAO officials say.
In addition to preparing a report for Ottinger, GAO
officials say they expect to complete, within a month, a report
analyzing a bill introduced by Reps. Manuel Lujan (R-N.M.)
and Marilyn Lloyd Bouquard (D-Tenn.) that would establish a
revolving fund structure for DOE's uranium enrichment enter-
prise.
SENATE'S NEW BUDGET-CUTTING MOVE
THREATENS TO KILL GCEP, DOE WARNS
DOE will be forced to cut an additional $70-million
from its FY-82 budget for the Portsmouth gas centrifuge en-
richment plant (GCEP) if a bill passed by the Senate Nov.4
is enacted. DOE officials warn that a cut of this size would
delay the project one year. This in turn could cause a number
of key GCEP contractors to drop out of the project, and if
this should happen "seriously consideration would have to be
given to terminating the project," according to Shelby Brewer,
DOE assistant secretary for nuclear energy.
Industry and congressional supporters of the project
hope to have a good part of the funds restored when a House-
Senate conference committee meets to iron out differences be-
tween the Senate and House-passed bills.
The Reagan Administration originally requested $669-
million for GCEP in FY-82 and the House in July passed a bill
appropriating $600-million for it. DOE officials said that cut
would have little impact on the schedule for the program, which
calls for the first 1.1-million swu of capacity to be ready in
1988. The House cutback would only have forced contracts
scheduled to be awarded in the fourth quarter of FY-82 to be
deferred until FY-83.
The Senate Appropriations Committee, under pressure
to make further budget cuts, made an additional $90-million
general reduction from the House allowance for uranium en-
richment activities.
Although report language said the cut should be "pru-
dently allocated," Brewer, in a letter to Sen. John Glenn (D-
Ohio), said "the additional $90-million reduction will have to
come predominantly from GCEP as all other activities are at
their lowest operational level. We currently estimate that at
least $70-million of the $90-million will have to be taken from
GCEP.
"A $70-million reduction in GCEP on top of the (House's
earlier) $68-million reduction will have severe impacts," Brewer
continued. "The reduction will require moving 15 to 20 con-
struction and procurement packages to FY-83 which will de-
lay GCEP completion by up to one year. A number of con-
tracts will have to be renegotiated and together with the pro-
ject delay will result in increased cost, by at least $125-million
over the next few years, to construct the plant and a delay in
realizing the economic benefits from GCEP operations.
"Finally, experience from the project's delay in FY-81
indicates that several key contractors will have to reassess their
involvement in the project. Should they choose not to con-
tinue with the project, serious consideration would have to
be given to terminating the project."
In hopes of establishing a better position in the confer-
ence committee to restore some of the cut, Glenn and Sen.
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Howard Metzenbaum (D-Oldo) slimed in a care illy gleaned
colloquy with Sen. Mark Hatfield (R-Ote.), floor moo* Of
the bill and chairman of the Senate kipropriaticarstoneridt-
tee. The colloquy was intended to fleah-out what exactly the
committee meant by making the general reduction of $90
million in enrichment teetantses.-According to then:140;1kt-
field was to agree "that the allocation of any general reduc-
tion by DOE should be performed* a way that is coet-effec-
tive and will not result in significantly greater costs for DOE
programs in the future."
SENATE IS CLOSE TO 1405UI ON MILL RULES
BUT DIFFERS ON TAILINGS CUIANUPAND Liu
House and Senate conferees will have to iron Out a num-
ber of differences in their versions of the PY42 energy & water
appropriations bill, following passage by the Senate of its
sion Nov. 5 on a 71-22 vote. The Senate bill contains" Major
slash in DOE's uranium enrichment Ortignun; as well la dif1lir6'
ences hi funding for the uranium Mill talkge aim* prOgrant
at inactive sites, construcdoii of i second naval nuclear Nei
facility; and DOE's program to promote ettnersion Witte/-
enriched fuel at research reactors. The Senate version also con-
tains a modified verskm of the so-called Stratton amendthent
which would bar NRC from Using funds to *aft:one iteyeViold
mill tailings requirements.
Under the bill, DOE's Offiee of Uranium Enrichment &
Assessment (OUSA) would receive a net appropriation Of $6
million, compared to the $88?million provided by the House.
The amount is based on a total budget of Si3014ifiteetiese
anticipated enrichment revenues of $lsts.billkia se4 hums
general reduction" of $90-Million asked for by the Sweets Ap-
propriations Committee. A committee **part a000ttipen$thig
the bill said the appropriation *mild be "prudently Agitated
so that, to the extent possible, there hminitual hnpact On
production capability.'
The bill does not provide the $6-million provided by the
House to beghtworkon a detelooment modubtfatimindf
vanced isotope separation (Alatechnolomputting that mon-
ey instead into general AIS ?pandas expenses. But; Ma the
House venion, the Senate bill :recommends only $90-million
for the national uranium resource evaluatice program (NURE);
compared to about $30-million budgeted in1FY-81.
An MS technology is scheduled to be selected next
April for further development, but the committee report
called the House funding for development "premature," and
said it "should not be provided until the process selection Imo
been completed. The committee encourages the department
CURRENT unAtitumioNtioNci INDICATORS
(ut sith wo8)
;est report (date)
Source (date)
Price
DOE (as of March 1981)1
42:01
Nuexco (Oct. 31,1981)4
" I
Exchange value
23.5?
Transaction value
24.101
Nukem (Oct. 1981)3-
23.50-1
25.50
1. DOE sells uranium in
established exclusively f
band on identifiable
Stat settlements In the
2. Nuexco's Exchange V
of the rice at which
cake .could be conclui
&lira Value is a weigh
sales for which delivery
transaction date.
34 Nultenfe Price rs*.
orenturo on the interne
mondi.
43.74 gam 1980)
23.50(Oct. 1981)
12390
23.50- (Sept. 1981)
25.50
s only. Iti list price,
a weighted average
matitet-price cone
reporting date.
company's judgment
quantities of yellow.
date. The Thaw
derived from recent
shin one year of the
offers for natural
the reporting
URANIUM
USED AS U300
index (date) ? 1
GNP implicit price
deflator (Sept. 30, 1981)2
Producer price index ?
Industrial commodities (Sept. 1981)
Gross avg. hourly earnings,
producliuninonsupervieurY orkers
' Metal mating
(July 81)
Primary nonferrotis flistals
(July 1981)'
Chemicals and allied Products
(Aug. 1981)
1. Except for the GNP figures, data
are compiled and pubW by the
attics. The base year fo the
(amigned a value of 100
T imme.as
ESCALATORS1
*he Lid more (dW)
I
Ii43
' 111.13
942
191.06 011ie 1981)
30740 (Aug. 1981)
1141 (June nil)
11.88 (lune 1981)
9.14 (July 19111)
trod in this table
Bureau ottabor Ste-
Index k 1967
an saint to
later revision by the bur?au.
2. The GNP implicit price deflator
basis by the U.S. Dept.. f C?
year (100.00). The t value
pitted on a quarterly
1977as the base
adjusted
previcon vahie,
tlisre for the second
that for the first quarts of 1981.
to proceed with the process selectkettily after' elietisiat
technical data has been completed and fully analyzed."
The report also directed DOE toiake prompt action to
prevent demand payments ? which total St66-ndlion ht the -
DOE FY-82 budget ? from becoming substantially larger hi
future years. The payments are for electricity contracted to
. .
the increase is warranted because
"has gained broad huernatiOnal
mote development Of new fuel
proliferation risks.
the program, which
? jrris desiped to pro-
te I. 4, which will reduce
Operate DOE's gaseous diffusion plants but not tab's became '
The Senate version provides $ .n for cleaning up
of a reduced level of operation,
mill tailings on inactive sites, $8.8 above What the
The *mite's version of the bill would give DOE's reduced
Howe would allow, but still
under the $36.3-ritillion requested
enrichment in research & test rest* (RERTV,progratti $5-
by the adininiatration: The
co ?, SOOliustion
was that
million to operate in FY-82, compared to $3-million recom-
the amount would "allow continua
4' or
important ongoing
mended by the House. The report accompanying the bill said
remedial action activities." Its reluctance to provide the full
NuelearPuel ? NOventher 9,1981 ? 13
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amount reflects the "growing concern with agency efforts to
develop standards for the program."
The bill modifies the so-called Stratton amendment to
the House version, which would prevent NRC from using funds
to enforce its mill licensing requirements published Oct. 3,
1980. The committee agreed with the House that NRC should
not have adopted technical requirements for uranium mill tail-
ings disposal prior to EPA's promulgation of final environ-
mental standards. But under the Senate amendment, "NRC
would retain its authority to regulate uranium mill tailings on
a case-by-case basis in the manner and to the extent permitted
prior to the promulgation of its uranium mill licensing regula-
tions. Thus, the commission would retain the authority to im-
pose through license conditions those requirements for the man-
agement of uranium mill tailings that the commission can dem-
onstrate in each case are necessary to protect the publid health,
safety, and the environment....
"NRC would retain the authority to enter into an amend-
ed state agreement if the revised state uranium mill licensing
program meets all other requirements of (the Uranium Mill ?
Tailings Radiation Control Act of 1978). However, during the
period in which NRC is prohibited from enforcing the techni-
cal requirements in its regulations, it would lack the authority
to require any state to adopt comparable requirements in order
for the state to continue to exercise authority under state law
for uranium mill licensing."
Adm. Hyman Rickover would receive $15-million ? $12-
million more than the House ? under the bill to begin con-
struction of a second naval nuclear fuel facility at Savannah
River. That would preclude dependence on the only current
source of such fuel, the Nuclear Fuel Services' Erwin, Tenn.
plant. "Reliance on a single source of fuel poses an unaccept-
able risk to the naval combatant fleet," the committee report
says. ? Michael Knapik, Washington
ARGENTINA IS SEEKING BIDS FROM MINING COMPANIES
for exploration and development of the Tigre I sector of the
Baulies uranium field at Sierra Pintada, Mendoza Province.
CNEA (Comision Nacional de Energia Atomica), which asked
for the bids, estimates that the resulting contract will be for about
$2.5-million. CNEA will buy any future uranium product at
mutually-agreed prices. This is intended to be the beginning of
development of Sierra Pintada, which was delayed when the
$150-million planned mine-mill complex project fell through
earlier this year because of financial problems of the participat-
ing consortium (NF, 25 May, 12). This larger project was put
on hold in the wake of the heart attack suffered by CNEA
President Carlos Castro Madero.
GULF LOSES INSURANCE PREMIUMS SUIT
Harrison Western Corp. of Salt Lake City, builders of
the Mount Taylor uranium mine in New Mexico for Gulf Min-
eral Resources, won a decision by the U.S. 10th Circuit Court
of Appeals in a dispute over $206,190 in workmen's compen-
sation insurance premiums.
Gulf had deducted the $206,190 from a $300,000 per-
formance bonus the contractor had earned July 1, 1979 in
construction of the Mount Taylor underground mine north-
west of Grants in Valencia County. Harrison Western had re-
ceived lower adjustments to premiums based on its favorable
safety record.
The construction contract provided that Harrison West-
ern was to obtain the insurance and would be reimbursed the
costs by Gulf. A key phrase in the contract said, "It is agreed
that the term 'reimbursable costs' shall not include any adjust-
ments under retrospective rating or similar type insurance
plans. Owner will not participate in any such adjustments, whe-
ther they increase or decrease the premiums of any insurance
by the contractor. .. ." Harrison Western's bills to Gulf did
not reflect the adjustments received by the contractor.
Harrison Western brought suit in the U.S. District Court
for New Mexico to recover the $206,190. The appellate court
affirmed the lower court's ruling in favor of the contractor.
The New Mexico court decision said: "A review of the contract
leaves the impression that Gulf did not wish to expose itself
to the risk of fluctuating premiums. By fixing its premium ex-
pense at a definite amount, Gulf shifted to Harrison the risk
of higher premiums. Gulf, therefore, should not be permitted
to reap the benefit of lower premiums occasioned by Harri-
son's improved safety record."
GULF MINERAL RESOURCES IS LAYING OFF about 100
workers in the production and maintenance departments at its
Mount Taylor uranium mine near San Mateo, N.M. Gulf spokes-
man Fred Meurer said his company is reducing the number of
work shifts at the mine from 21 to 15 per week. Meanwhile,
construction is continuing on new facilities at the mine.
NuclearFuel is published every other Monday by McGraw-Hill, Inc., 1221 Avenue of the Americas, New York, N.Y. 10020. Officers of the
Corporation: 'Wald W. McGraw, Jr., Chairman and Chief Executive Officer; Joseph L Dionne, President and Chief Operating Officer;
Robert N. Landes, Senior Vice President and Secretary; Ralph J. Webb, Treasurer.
Nuclear Publications' staff and primary responsibilities:
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Don Martin, chief editor (NuclearFuel and Inside N.R.C.)
Sandy Cannon, Washington editor (Nucleonics Week)
Stephanie Cooke, assistant editor (NuclearFuel)
Douglas Glucroft, European editor
Patricia Hinsberg, Washington editor (Inside N.R.C.)
Michael Knapik, Washington editor (NuclearFuel)
Jeffrey Yacker, associate editor (Nucleonics Week)
NotharPvel usb.ciiption rates: $550 per year in U.S. and Canada, $650 elsewhere (air mail delivered). @Copyright 1981 by McGraw-Hill, Inc.
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.14 ? NuclearFuel ? November 9, 1981
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