Ontario's Uranium Mining Industry- Past, Present, and Future
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r THE AUTHOR O. J. C. Runnalls, M.A.Sc, Ph.D., P.Eng. Former Senior Adviser, Uranium and Nuclear Energy, Energy, Mines and Resources, Canada, and executive Vice-President, Uranium Canada Limited Professor of Energy Studies Faculty of Applied Science and Engineering University of Toronto NOTE: This background discussion paper does not represent of- ficial policy and the views expressed herein are not nec- essarily the viewpoint of the Government of Ontario JUNE, 1981 Price: $25.00 ONTARIO'S URANIUM MINING INDUSTRY- PAST, PRESENT, AND FUTURE A Report Prepared for the Ontario Ministry of Natural Resources Ontario Mineral Policy Background Paper No. 13 by O. J. C. Punnalls Professor of Energy Studies Faculty of Applied Science and Engineering Univ.iSity of Toronto January, 1981 Ministry Of H°n- A|an W. Pope ... Minister Natural „ ,. T Mr. W. T. Foster ReSOUrceS Deputy Minister Ontario Parts of this publication ma> be quoted if credit is given to the On- tario Ministry of Natural Resources. It is recommended that refer- ence to this report be made in the following form: Runnalls, J.C., 1981 "'Ontario's Uranium Mining Industry— Past, Present, and Future" Ontario Ministry of Natural Resources Mineral Background Paper No. 13 (6/81) Foreword The report "Ontario's Uranium Mining Industry—Past, This report traces the Ontario uranium mining industry Present and Future" is the thirteenth in a series of studies from the first discovery of uranium in Canada north of prepared under the auspices of the Mineral Resources Sault Ste. Marie through the uranium boom of the 1950's Branch, of the Mineral Resources Group, Ontario Ministry when Elliot Lake and Bancroft were developed, the cut- of Natural Resources. The series has risen out of the rec- backs of the 1960s, the renewed enthusiasm in exploration ognition th l each of the major mineral commodities pro- and development of the 1970s to the current position when duced in Ontario is a unique entity which has to compete continued production for the domestic market is assured. in the world market place. This paper aims at providing a Ontario with developed mines and operational expertise, comprehensive picture of Ontario's Uranium Mining In- will be in a position to compete for export markets as they dustry, not so much for the highly technical audience, but reopen. The low level of expenditures for uranium explo- rather for those who would wish to know more of On- ration and the lack of new discoveries are noted. The re- tario's Uranium industry and the factors which govern its port also reviews and places in perspective the develop- well-being. The Mineral Resources Branch has been par- ment of policies and regulations governing the industry ticularly fortunate in obtaining the service of Professor and the jurisdictional relationships of the Federal and Pro- Runnalls, who has had a long association with energy vincial governments. issues primarily as related to uranium and nuclear energy. It is hoped that the readers will find this report a useful In 1980, preliminary data, Ontario produced from the compendium of relevant data and that it will induce a Elliot Lake and Bancroft areas 4275 tonnes U worth greater knowledge and understanding of the industry; its 413M$ which is some 2/3 of Canada's production. Ura- history; its role in the life of Ontario; the problems, chal- nium is Ontario's third most valuable metallic commodity lenges and opportunities which it faces; and the legislation after nickel and copper, and slightly ahead of both gold and regulations under which it has to operate. and silver. Ontario had some 62% of Canada's measured indicated and inferred resources recoverable at prices up to $200/kg/U and some 7% of the free world's currently eco- nomic reserves. Ontario's deposits, however, are compara- tively low grade (approximately 0.1% U3O8) and it is the existence of facilities and infrastructures coupled at Elliot Lake with large scale mining operations which render the Hon. Alan W. Pope industry viable at today's costs and prices. Minister of Natural Resources Major expansion is underway at Elliot Lake to meet long- term contracts with Ontario Hydro and Nuclear power is the cornerstone of meeting Ontario's electrical demand well into the next century. With assured uranium resources and the demonstrated high efficiency and safety of the CANDU reactors, Ontario is blessed with an indigenous energy source. Changes in market conditions, shifts in technology and competition with major deposits in places such as Sas- katchewan and Australia may affect Ontario's ability to compete for the export market. Delays in licensing and construction of nuclear plants, particularly in the United States, have led to the temporary oversupply of uranium and to a marked drop in uranium prices which will con- tinue over the short term. The inexorable demand for cheap reliable energy; the need for the industrial nations to shift their energy economies away from oil and gas; and the environmental and transportation problems associated with coal, ensure that uranium will play a major role in meeting the world energy requirements in the medium to long term. Table of Contents Page No. Foreword iii Summary xi List of Figures vi List of Tables vii Abbreviations ix Units and Conversion Factors viii Historical Background a) Introduction 1 b) The Boom of the 1950s 3 c) The Doldrums of the 1960s 4 d) Recovery in the Early 1970s 6 e) The Softening Market in the Late 1970s and in 1980 10 The World's Uranium Requirements a) Future Role of Nuclear Energy in the World 13 b) Canada's Nuclear Prospects 16 The Resource Picture a) World Scene 21 b) The Canadian Picture 30 c) Ontario's Prospects 38 The Production Scene a) Western World 41 b) Canadian Outlook 47 c) Ontario Production 49 Government Influence on the Industry a) Federal Policies 51 b) Provincial Involvement 54 c) Federal-Provincial Conflicts 57 d) Federal and Provincial Inquiries 58 Health, Safety, and Environmental Issues a) Health and Safety 61 b) Environmental Issues 63 External Influences a) Foreign Litigation 65 b) Foreign Reaction to Canadian Policies 67 The Prospects for Ontario's Uranium— Producing Areas a) Elliot Lake 69 b) Bancroft 72 c) Production Prospects 73 Conclusions 75 References 80 Acknowledgment 82 Appendices 1. Pearson Policy of 1965 86 2. Policy Statement of June 19, 1969 87 3. Statement on Foreign Ownership by the Prime Minister, March 2, 1970 88 4. Foreign Ownership Statement, March 19, 1970 89 Table of Contents continued 5. Foreign Ownership Statement, May 5, 1970 90 6. Foreign Ownership Statement, September 18, 1970 91 7. Statement on Stockpiling, July 24, 1970 92 8. Statement on Canada-Denison Joint Venture Stockpile, December 23, 1970 93 9. Letter of February 14, 1972 on Interna.ional Uranium Marketing 94 10. Direction of August 17, 1972 on Uranium Marketing 95 11. Policy Statement on Uranium Marketing 97 12. Direction of May 22, 1973 on Uranium Marketing 98 13. Direction of August 31, 1973 on Uranium Marketing 99 14. Direction of October 30, 1973 on Uranium Marketing 100 15. Directionof March 6, 1974 on Uranium Marketing 101 16. Energy Policy Statement, January 23, 1974 103 17. Export Policy Statement, September 5, 1974 107 18. Policy Statement on Pricing, March 17, 1977 112 19. Definition of Resources 113 20. Bill C-14, November, 1977 115 21. Bill C-64, June 29, 1978 133 22. Safeguards Policy Statement, December 20, 1974 155 23. Safeguards Policy Statement, December 22, 1976 157 24. Saskatchewan Uranium Legislation—Part VIA and section 103 of the Mineral Disposition Regulations, 1961, as amended—March, 1980 159 25. Uranium Information Security Regulations, September 22, 1976 170 26. Policy Statement on Marketing and Revised Uranium Information Security Regulations 172 27. Bill C-41, July 11, 1980 179 28. Income from Sale of Canadian Uranium, 1934-1963 185 29. Uranium Production from Ontario Mines, 1961-1979 186 30. Uranium Ore Reserves in Saskatchewan 188 List of Figures Text Page No. Figure 1 Uranium Spot Price published by Nuclear Exchange Corporation II Figure 2 Ontario Hydro's Uranium Supply and Demand 18 Figure 3 Areas with Uranium Occurrences and Deposits in Early Proterozoic Quartz-Pebble Conglomerates 25 Figure 4 Areas of Proterozoic Unconformity-related (U) Vein (V) Deposits 26 Figure 5 Area of Disseminated iVIagmatic, Pegmatitic and Contact Deposits in Igneous and Metamorphic Rocks 27 Figure 6 Areas with Uranium Deposits in Sandstones 28 Figure 7 Areas favourable for Uraniferous Duricrusts 29 Figure 8 Areas in Canada with Uranium Resources Associated with Identified Deposits 32 Figure 9 Areas in Canada with Speculative Resources of Uranium Favourable for the Occurrence of Uranium Deposits 33 Figure 10 Uranium Exploration Expenditures in Canada and Ontario with Uranium Market Price Superimposed 35 Figure 11 Uranium Deposits of Northern Saskatchewan 36 Appendices Figure 12 Uranium Reserves for Domestic Applications 1974 Situation 110 Figure 13 Uranium Reserves for Domestic Applications 1979 Situation 111 Figure 14 Uranium Market Price 1974-1977 174 Figure 15 Comparison of Prices Within U.S. With Minimum Price Directives to AECB 175 List of Tables Page No. Table 1 Potential World Primary Energy Production, 1978 13 Table 2 Potential World Primary Energy Production, 1979 13 Table3 Estimated World Installed Nuclear Capacity 14 Table 4 Estimated World Annual Uranium Demand 14 Table 5 Nuclear Power Plants in Operation in Ontario 16 Table 6 Capacity Factors for Ontario Hydro's Pickering and Bruce Generating Stations 16