Uranium hype heats up + "No groundwater? No problem!"

Nearly 14,000 new homes have been built in Phoenix this year

⛏️Mining Monitor ⛏️

The mining world is a busy place these days, at least when it comes to hyping potential projects and enticing investors. Actual mining? Not so much — at least not yet.

Is the latest uranium frenzy real? Or just another game?

The frenzy of activity is being spurred by a steep increase in uranium spot prices, from around $25 per-pound a couple of years ago to $70 now, the highest they’ve been in about 15 years. This isn’t due to a current spike in demand or even limited supply, but to anticipated demand and potential supply threats. 

China plans to construct nearly three dozen reactors in coming years and Japan is warming up again to nuclear power — apparently Fukushima’s fallout is fading from the collective memory. In the U.S. various entities are working to develop nuclear reactors, though none has proven commercially feasible yet. And there are plans to utilize some of those reactors in actual power plants — e.g. in Kemmerer, Wyoming, and in southern Idaho.

The reactors will need fuel if and when they get built, which should increase uranium demand. Meanwhile, the Russia-Ukraine war continues to drag on interminably, creating supply uncertainties (since Russia-owned Rosatom is one of the world’s largest uranium suppliers and could be sanctioned).  

The last time uranium prices were this high was in 2007, when they spiked to $141 for a brief period of time, sparking a flurry of mining claims and proposals, property acquisitions, and plans to reopen idled facilities. Someone even wanted to build a nuclear power plant in Green River, Utah. Regional newspaper headlines touted and worried about the imminent renaissance of the nuclear power and uranium mining industries. 

But by 2008 prices had fallen, and even though the Obama administration generally liked nuclear power as a low-carbon energy source, it wasn’t enough to overcome the stigma born of the Fukushima disaster in 2011. Prices plummeted and the “renaissance” fizzled. The Green River nuke plant plan petered out, ultimately killed by a lack of water rights (cost and opposition and safety concerns also contributed to its demise). And the uranium mining industry went into a zombie-like state.

Now the newly high prices are causing the zombified carcass to twitch: Companies are staking thousands of acres of mining claims under the 1872 Mining Law; companies are merging and properties changing hands like pieces on a Monopoly board; and dozens of mining companies no one has ever heard of are touting exploratory drilling plans and assay results. For example: 

• Canada-based First American Uranium is looking to do exploration work on its 26-claim Red Basin uranium/vanadium project on US Forest Service land in Catron County, New Mexico. 

• Anfield Energy (yet another Canadian mining company) has been busy in the Four Corners Country in recent years, with purported plans to restart its Shootaring mill near Ticaboo and to work on its parcels near Slickrock, Colorado. It recently announced it is acquiring 175 unpatented federal lode mining claims in Utah’s San Juan and Grand Counties from Nolan Holdings for $85,000 and a bunch of stock. Unfortunately the BLM’s mining claim database is on the fritz, at least for me, so I haven’t figured out where these are.

• Moab Minerals claims it “could be on the edges of a new high grade uranium-vanadium discovery” at its REX properties in the Uravan Mineral Belt of western Colorado and they’re “getting close to uranium paydirt.” Aren’t we all.

• Consolidated Uranium says it has completed the first phase of exploratory drilling at its Tony M mine, also near Ticaboo, Utah (on the south end of the Henry Mountains). 

• Uvre — which is a mining firm, not some futuristic food made of cricket feces — says it has identified a five-kilometer “uranium trend and uranium anomaly called Big Sally” at its East Canyon project north of Monticello. No word on who Sally is and how she feels about having a uranium anomaly named after her.

• Thor Energy says it has received required permits for exploratory drilling at its Wedding Bell and Radium Mountain projects on a mesa just east of the Dolores River in western Colorado. 

• And Energy Fuels, owner of the controversial White Mesa Mill near Blanding, Utah, says it is “performing rehabilitation and development work” on its La Sal (near the village of La Sal in Utah), Whirlwind (on the northeast side of the La Sal Mountains along the Colorado-Utah border), and Pinyon Plain (near the Grand Canyon) projects. 

Whether this activity will lead to actual mining is anyone’s guess. The increase in prices did lead to a small increase in domestic uranium production last year, but almost all of it was from ore stockpiles that had been mined long ago. 

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🌞Aridification Watch🔥 + 🏠 Random Real Estate Room 🤑

Ever receive a first-thing-in-the-morning PR pitch that makes you spew your coffee out your nose? I did. It went like this:

“No groundwater? No problem. Phoenix* may have limited new housing development recently because of its water crisis, but for now, at least, it's still one of the best American cities for new home construction.” (*I’m assuming they’re talking metro areas, not just cities.)

I mean, it’s no surprise, but still, the tone was just a tad off if you ask me. But hey, this dude is just the messenger. His moveBuddha data shows 13,835 homes have been constructed in Phoenix this year, ranking it 19th in the nation for per-capita homebuilding rates and, I suspect, number one for likelihood of suffering a severe water shortage in the next few decades. Although Denver (6,866 new homes) and Riverside, California, (6,524 new homes) are also prime candidates for future thirst.

Tangent: The PR guy buys into the housing supply-demand fallacy, saying all that homebuilding has lowered Phoenix’s home value index to “a very affordable figure of $412,023.” Very affordable for whom? Certainly not anyone making the median Phoenix household income of about $65,000. Besides, regardless of all that homebuilding in Denver and Riverside the home value index in both places remains well over the $half-million mark.

And, yeah, Arizona is limiting future homebuilding in the Phoenix area based on water supplies, but it’s not clear what effect it will have — especially if cities and developers figure out ways around the groundwater-supply rules.

Buckeye, a sprawling suburb of sprawling Phoenix that is still mostly undeveloped desert and farmland, is also taking the “no groundwater, no problem” approach to growth, according to a mind-blowing Guardian story. Buckeye’s mayor is set on getting more houses built and more people to move there, even predicting that its population will one day eclipse Phoenix’s. Where will it get the water? They’ll pipe it, 200 miles uphill, in a yet-to-be-built pipeline, from a yet-to-be-built $5 billion desalination plant in Mexico. Ooof.

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Parting Shot