Eight hundred miles north of Montana, in upper Saskatchewan, sprawls a land of vast evergreen forests laced with lakes and streams, windblown sand ridges--and the world's richest deposits of uranium. From this Canadian wilderness, centered on the Athabasca Basin, fully a quarter of the world's annual supply of uranium is unearthed, most of it from a single mine called McArthur River. In a world increasingly concerned about the flow and price of oil from the Middle East, demand for the mine's controversial product is quietly rising.
McArthur River isn't much to look at from above ground--just a cluster of green, corrugated-metal buildings, a company lodge and an airstrip--but the mine is an industrial marvel. The rocks underground average 21% pure uranium, with pockets as concentrated as 80%, far richer than the typical 1% deposits at other mines. The ore at McArthur River is the richest in the world and is far too radioactive to handle conventionally; the miners extract it by remote control, using giant boring machines and scoop trams instead of pickaxes and shovels.
Since uranium was discovered at McArthur River in 1988, its corporate owner, Cameco, based in Saskatoon, Sask., has spent $277 million to develop it. Considering that the price of uranium has languished below the cost of production for most of the intervening years, Cameco's investment might seem like a fool's wager--until you look at what is happening in the battered market for U3O8, the raw uranium that's refined and enriched for use in nuclear reactors.
That market has enjoyed a little-noticed recovery over the past two years, as the price of uranium has crept back to more than $10 a lb. from its all-time, inflation-adjusted low of $7.10 at the end of 2000. Demand for uranium has risen steadily over the past decade, as stockpiles have dwindled and nuclear-power plants have increased their output. The U.S. nuclear-power industry generated a record 778 billion kW-h in 2002. That year marked the third consecutive all-time annual high, and experts estimate that 2003 will continue the streak.
Even as the debate over long-term storage of spent nuclear fuel raged during the 1990s, U.S. uranium consumption rose about 35% over the decade, to about 55 million lbs. in 2001. That makes Cameco's bet on McArthur River--and the firm's nearby mine, Cigar Lake, which could begin production around mid-decade--look a lot less foolish.
On a recent winter day, more than 2,000 ft. below the surface of the McArthur River mine, Dale Powder operated a scoop tram from a niche in the rock wall 100 ft. or so from the vehicle. He wore a hard hat and rubber boots, a radiation detector and a shoulder harness with a pair of joysticks that he manipulated through his heavy work gloves. The scoop tram looked like a dump truck with the cab lopped off. On solid-rubber tires 5 ft. high, it carried freshly mined ore in soccer-ball-size chunks to the "grizzly," the big grated dumping shaft, where the rocks begin their journey to the mill.