Energy Fuels Resources announced that it will halt work on its Canyon Mine operation south of Grand Canyon National Park because of market conditions and the high costs of litigation.
The uranium mine project will be on standby until December 2014, or until a ruling is issued in a federal case challenging the U.S. Forest Service's decision to allow development of the mine near Tusayan. The company had planned to start extracting 75 kt (83,000 st) of ore to produce 1.6 million lbs of processed uranium, or yellow cake, in 2015 but now will have to re-evaluate the timeframe, The Associated Press reported.
Stephen Antony, Energy Fuels president and chief executive, the mine remains an important aspect of the company’s medium-term plans and it will continue to work with the Forest Service to defend the project’s approvals.
Prices for uranium have dropped to the mid-$30s per pound on the spot market, among the lowest in the past five years.
The mine sits in a nearly 1 million-acre area that was placed off-limits to new mining claims in January 2012. Companies with existing claims that were proven to have sufficient quantity and quality of mineral resources, like the Canyon Mine, could be developed.
The Havasupai Tribe and a coalition of environmental groups sued the Forest Service in 2012 over what they claim is an outdated environmental review from 1986. The groups also argued that the Forest Service failed to consult with the tribe on impacts the mine would have on a butte held sacred by the tribe. Energy Fuels is an intervener in the case.
U.S. District Court Judge David Campbell in Phoenix approved an agreement to put the mine on standby and to stay proceedings in the case, The Associated Press reported.
Energy Fuels acquired the Canyon Mine last year from Denison Mines Corp. The surface work on the project, including the hoist, evaporation ponds, environmental monitoring facilities and buildings at the site have been completed, the company said. The shaft was about 300 ft but needed to reach 1,500 ft to access the body of uranium ore that would be shipped to a mill in Blanding, Utah.