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U.S. Uranium Reserves Estimates

Data for: 2008   |   Release Date: July 2010   |  Next Release Date: Discontinued

The U.S. Energy Information Administration (EIA) has updated its estimates of uranium reserves for year-end 2008. This represents the first revision of the estimates since 2004. The update is based on analysis of company annual reports, any additional information reported by companies at conferences and in news releases, personal contacts, and expert judgment.

Methodology

The U.S. uranium ore reserves reported by EIA for specific MFC categories represent the sums of quantities estimated to occur in known deposits on properties where data about the ore grade, configuration, and depth indicate that the quantities estimated could be recovered at or less than the stated costs given current mining and milling technology and regulations. The reserves estimates for year-end (delete: December 31, 2008), are based on historical data for uranium properties evaluated under prior Federal uranium resource assessment programs, data reported for 1984-2003 by mining companies for domestic uranium properties, and recent analysis of updated company data and personal contacts, together covering about 450 individual properties. Data for current mining costs are not available for most of the uranium reserves properties included in the yearend 2008 estimates, and the reserves quantities reported for the stated MFC categories should be viewed as the upper limits of quantities recoverable under the most favorable conditions. The initial uranium property reserves estimates were based on bore hole radiometric data validated by chemical analysis of samples from cores and drill cuttings. The thickness of mineralized rock, mineral grades and their spatial distribution, host-rock depth, proposed mining method, ore haulage distance, and reclamation method were considered in the reserves evaluation. Ore cut-off grades reflect operating costs only, and the estimates include only ore with an average grade expected to allow recovery of the forward costs.

Only forward operating and capital costs were included to estimate reserves. Past capital costs were considered "sunk" costs and mining of the individual deposits may or may not return such costs to investors. Sunk costs for such items as exploration and land acquisition were excluded as were the costs for income taxes, profit, and the cost of money. Forward costs include the costs for power and fuel, labor, materials, insurance, severance and ad valorem taxes, and applicable administrative costs. The forward costs used to estimate U.S. uranium ore reserves are independent of the price at which uranium produced from the estimated reserves might be sold in the commercial market.

The estimates do not reflect a predetermined profit margin above the basic costs, since the rate of return can differ considerably among individual mining companies. Therefore, the estimates could include some reserves across the MFC categories that might not be exploitable if the profit margin ceases to be attractive to the operator. Reserves quantities reported by EIA have been adjusted to reflect effects of mining dilution and milling and processing recovery factors. The 2008 reserves estimates for the $50- and the $100-per-pound U3O8 categories are summarized for major uranium-industry States in Table 1, and by mining method in Table 2. Estimates from 1993 through 2003, and for 2008, are shown for the $30-, $50-, and $100-per-pound U3O8 in Table 3.

Between 1994 and 2004, reserves were estimated each year primarily by depleting reserves associated with uranium production for that year. For 2008, a more comprehensive update was made by revising individual property estimates in those cases where properties were no longer active, where there was significant depletion of the reserves, and where properties were undergoing or had completed reclamation. In addition, because of higher costs, significant quantities of reserves are now estimated to be in higher cost categories compared to earlier estimates, or to be no longer economical at less than $100 per pound of U3O8. Because of the relatively small quantity of reserves estimated to be available at less than $30 per pound of U3O8, EIA is now showing reserves for the $50 and $100 per pound categories only, by State and mining method, but is showing the $30 category for national reserves.

Note that the definition of "reserves" for these estimates is based on the definition in the EIA glossary, which is "Estimated quantities of uranium in known mineral deposits of such size, grade, and configuration that the uranium could be recovered at or below a specified production cost with currently proven mining and processing technology. . ." This definition corresponds, in general, to the category of "Reasonably Assured Resources," often used in international summaries of uranium reserves and resources, such as the biennial report Uranium: Resources, Production and Demand (known as the "Red Book"), prepared jointly by the Nuclear Energy Agency of the Organization for Economic Cooperation and Development, and the International Atomic Energy Administration. "Reserves," as reported here, do not necessarily imply compliance with U.S. or Canadian government definitions for purposes of investment disclosure.