191 Denison Mines Ltd
Modestly boasting itself a "diversified world energy and natural resource company ... a major international producer of Uranium, Oil, Gas, Coal and Cement Products" (1), the modern Denison was incorporated in 1973 after amalgamation with Stanrock Uranium Mines Ltd (2).
Thirteen years before, the Can-Met uranium property at Elliot Lake, Ontario was merged with Consolidated Denison to form Denison Mines Ltd (3). At the time, Denison and Rio Algom were the only operating uranium producers in Canada- thanks to a US ban on imports to boost its own producers. By 1964, employment at the two mines had dropped by one-tenth from its peak in 1958: the Canadian government created its own stockpile which helped keep Denison and its stablemate afloat (4). But it wasn't until the uranium cartel began to bite, and Denison secured spectacular contracts in the mid '70s, that its rise was assured to its current position as one of the West's leading purveyors of yellowcake.
In March 1974, Denison signed its first major contract of the '70s, with Tokyo Electric Power Co, providing for the sale of 40 million pounds of U3O8 at the rate of 4 million pounds per year from 1984 to 1993 (5) (the contract seems to have been put into operation on time) (6). Tokyo Electric's prepayment of US$10M in early 1974 covered mine development in advance of production and enabled processing facilities to be expanded to 7100 tons/day of ore (5).
A bare five months later another fat contract was signed, with Enusa of Spain, for 4 million pounds of uranium from 1975 to 1977, again with a substantial prepayment (5).
As of December 31, 1975 export sales totalled more than 80 million pounds of uranium oxide; additional supplies of uranium to Spain were to be made from the Denison/federal government joint stockpile programme (5). Then, at Christmas 1977, the company got the biggest present delivered to a uranium producer, with the world's largest uranium sales contract ever concluded (7).
126 million pounds of U308 were to be delivered to Ontario Hydro (the only operator of commercial nuclear plants in Canada) at the rate of 4.2 million pounds per year from 1980 until 2011 (10) - later extended to AD 2012 (6). The amount of advances paid by Ontario Hydro to Denison by the end of 1980 was more than US$200M (2). Little wonder that the company's profits tripled in 1978 (9). However, they declined in 1979 (10) and - due to higher costs of uranium production, the need to plumb lower grade ore (10) and a fire up at 'tut mill (11) - expansion of the mills and the Stanrock deposit, to meet Ontario's demands, was somewhat held back. A dispute with Ontario over the manner of rehabilitating the old properties was "amicably settled" in 1981, and Denison agreed to a 9% reduction in uranium deliveries (13).
The same year, the company's rising profits were "checked" after it settled litigation brought against it - as part of the notorious cartel case by Westinghouse and the TVA in 1976 and 1977 for failure to deliver uranium. Denison paid out C$17.6M (13,14). This loss in profits was partially offset by the company's sale of certain investments, notably its share in the Coalspur thermal coal property in Alberta, and higher income from oil and gas (15).
In the next two years oil and gas proved to be Denison's biggest profit-spinners, with production on stream in the Gulf of Mexico, in the Casablanca fields off-shore of Spain, and in Greece, as well as in Canada (16).
It has also taken shares in oil companies operating as far afield as Egypt and Nova Scotia, the Philippines and the South China Sea (17).
Denison diversified into coal with 28.25% of the mammoth Quintette coal mine in British Columbia, where - despite various teething problems - production was expected to reach full spate at the end of 1984 (18). Denison's partners at Quintette are Imperial Oil, Tokyo Boeki, Mitsui Mining, and Charbonnage de France (2).
By the beginning of 1982 the company's expansions at Elliot Lake were 75% complete, and a new hydro-metallurgical plant was commissioned during 1981, reaching its design capacity by December (16).
Two shafts from the old Can-Met/Stanrock mine were being rehabilitated at the start of 1983 (3, 19). A year later, the expansion was proceeding less quickly than expected (20) but underground heap leaching of low-grade "dumped" ore was producing 5 tons/month (6), a tiny contribution to normal production which amounted to 2.71 million tons in 1983 (17).
The company's uranium explorations have covered large parts of Saskatchewan (21) and Manitoba in Canada, as well as Wyoming (22) and Washington state (23) in the USA. Its 46.9% owned subsidiary Consolidated Rexspar holds a uranium property at Birch Lake, British Columbia which has been dormant since the moratorium of 1980 (24).
Despite the company's diversifications into other energy minerals, potash and gold (6) and despite, too, its purchase of Noranda's Koongarra mine in the Australian Northern Territory in 1980 (25, 26), Denison and its fortunes are still primarily identified with Elliot Lake.
Numerous reports have been published (27) on the effects of mine radiation and tailing contamination from the Elliot Lake mines. The following is a summary of these (See also Rio Algom for further information.) :
Tailings from Denison's mines have littered and petrified the landscape (rather, lakescape) at Elliot Lake for many years, as testified by photographs compiled by the Ontario Birch Bark Alliance (35).
- By 1974 at least 81 lung cancer deaths and hundreds of cases of silicosis were directly attributable to conditions at Elliot Lake. By January 1980 the number of acknowledged lung deaths had risen to well over 100 (28).
- Up to March 1975, 446 present and former Elliot Lake workers were identified as having lung disabilities due to dust exposure, and in January 1980 there were "dust problems of a serious nature" at both Rio Algom and Denison operations (28).
- The Ontario Workmen's Compensation Board estimated that 16 out of every 20 deaths among Elliot Lake miners were due to lung cancer (29). Stated Stephen Lewis, Ontario NDP leader: "In no individual year, from 1958 to 1974 inclusive, in no survey, quarterly, three times a year, or semi-annually, in not a single instance, did the average underground dust counts for the uranium mines of Elliot Lake fall below the recommended limits. Not one. It's really quite horrendous" (29).
- In October and November 1978, 86% of samples from the mines at Elliot Lake, taken by the Ontario Ministry of Labour, revealed free silica contamination above the standard set (28).
- Radioactive mine-dust readings taken by the provincial government around the same time showed 32% above the danger level (30). Results of the surveys were not made available to the miners themselves (31).
- Dr David Bates, chairperson of the British Columbia inquiry into uranium mining, visited Elliot Lake in the late '70s and described the Elliot Lake Health Protection Surveillance facility thus: "The general impression of this facility is that it commands so little in the way of resources that presumably the company at all levels regards the whole of the surveillance program as a very low priority activity" (32).
On the same tour Dr Bates had this to say about the quality of the environment inside one of Denison Mines' uranium mills: "The mill was very poorly maintained as far as the housekeeping is concerned. There was obviously inadequate regulation and obviously not enough care was taken either by the workers or their supervisors" (32).
- In a further submission to the Bates Inquiry, Kenneth Valentine, the National Director of Occupational Health and Safety for the United Steelworkers of America (USA), made this statement on the deplorable record of Denison and Rio Algom: "My personal observation is, you know, while I was there, that not too many of them should have been allowed to continue keeping their licence, their licence should have been pulled ... yes, there have been situations where almost everyone should have had their licence revoked ... In the final analysis, I would suggest that at the very least the AECB is guilty of criminal negligence ... And as a result of their failure, their dereliction of duties, untold numbers of people have died" (33).
- When details of the appalling lack of protection for miners became public in 1974, it triggered a three-week stoppage at the mines and forced the federal government to appoint the Ham Commission. But though new regulations were adopted in Ontario for most other mines, uranium mines continued to be governed by looser federal regulations (34).
As Stephen Lewis concluded in his submission to the Ham Commission: "The Elliot Lake story is a moral and human outrage. What is more, it's apparently not yet over" (29).
In late 1980 Noranda sold its Koongarra uranium lease in the Alligator Rivers region of Australia's Northern Territory to Denison. The company considered it needed a new source of uranium to keep up with its future sales (16).
- Elliot Lake tailings have been used as construction fill material for buildings as far away as Toronto and Montreal (36).
- A Federal/Provincial Government Task Force set up in 1976 identified fourteen houses as needing "immediate remedial action" while 311 (16% of all) needed to be "cleaned up" (36). A new building code published in 1978 limited building radiation to 0.2 WL (working levels). But, as Dr Gordon Edwards observed: "Using only data supplied by the Ontario Ministry of Housing to the Elliot Lake Environmental Assessment Board, it is shown that continuous exposure to 0.02 WL for 12 hours per day could lead to a whopping 31 % increase in the incidence of lung cancer for males" (37).
- Mine waste at Elliot Lake flows into the Serpent River system and directly affects the fishing waters of Native Canadian bands downstream (38).
The international Joint Commission on the Great Lakes (IJC) identified the outflow of the Serpent River into Lake Huron as the greatest single source of radium-226 as well as large amounts of thorium isotopes. For a distance of one kilometre into Lake Huron, concentrations of radium, thorium and heavy metals are above the standards set by the IJC (39).
During the low summer flow period, liquid wastes dumped into the Serpent River headwaters range from between two-thirds and a half of the total flow (39).
- Acidic waste water also moves into ground water, raising contamination levels as the acid moves in the ground water zone (40).
Acidity levels taken at Elliot Lake in the late 70s revealed dissolved radium-226 levels well above the potable standard (41). Levels of iron, copper and uranium also exceeded those suitable for human drinking (42).
- The Status report on water pollution in the Serpent River Basin, delivered by the Ontario Ministry of the Environment in 1976, revealed that water downstream of Elliot Lake was so contaminated with radium that it was unfit both for human use and fish - all of which had been killed off (43).
By 1980, fish were absent from 1000 square miles of the Serpent River watershed (half the total area) and 55 miles downstream from the mines (39).
- Copper levels downstream from Elliot Lake greatly exceed the 50ppb lethal level (44).
At Elliot Lake, over the years of mine operation, recorded types of waste releases include: unexpected seepages, unintended movement of solid wastes, dam and dyke structural failures, re-solution or erosion of barium-radium precipitate, waste pipeline breaks, pump failures, a decant tower collapse, the accidental release of a large volume of sulphuric acid, and release of fine sands in the decant effluents (39). One example is Denison's Stanrock waste area, both sides of which are bounded by dams constructed of solid mill wastes. The Stanrock dams have been a source of contamination since their construction. One failure was on November 24, 1979, when between one and two million gallons of wastes spilled into the Serpent River system (28).
On a visit to the Stanrock waste site in May 1979, chairman of the BC Royal Commission on Uranium Mining, Dr Bates noted that: "The tailings pond was clearly eroded, it was not fenced, it had been covered by lime, and a warning sign was placed beside the road to this effect, but no attempt was made to keep people off the tailings pond. The area downstream showed considerable damage where the tailings had drained into the forest and killed this. The outflow and the sludge collected in Moose Lake. It is notable that none of the tailings pond itself showed any sign of revegetation after having been abandoned for something like 15 to 20 years" (46).
- At one point in the late '70s, no less than 22 charges were laid against Denison by the Ontario Ministry of the Environment for failing to safeguard against effluents released (39). The company was acquitted on all charges because they had done what was technically feasible to avoid them.
- In 1979 the Ontario Environmental Assessment Board issued a final report on the expansion of uranium mines in the Elliot Lake area - expansions needed to fulfil both Denison and Rio Algom contracts. Among its findings, the Board slated the companies on several grounds:
"... the Ministries of Natural Resources and Labour have no definitive criteria for evaluating the construction, materials used, and stability of tailings dams.
... the potential for redissolution of radium from precipitation ponds after abandonment is of great concern.
... the companies have been remiss in not studying backfilling as a waste management option.
... the process known as solidification has not undergone sufficient field trial to determine its applicability to the Elliott (sic) Lake tailings, its ability to withstand the climatic extremes, and its ability to be combined with other methods of contouring and stabilization as part of a long-term close-out process. - [there is] little evidence to give it confidence in the use of synthetic membranes, asphalt, cement or chemical means to cover tailings areas to inhibit water infiltration in the long term.
... the mill tailings have the greatest potential impact on the natural environment of all the activities related to the mines expansion" (47).
The price Denison paid for Koongarra has not been disclosed (25), but with the deal Denison acquired two orebodies: Number one containing 13,000 tonnes of U3O8, and the other 15,000 tonnes (inferred) of uranium oxide grading at 3.35% (48).
The Ranger Uranium Environmental Enquiry (Fox Commission) in its second report (49) recommended against mining the Koongarra deposit, describing the creek and wetland system downstream as "... so valuable ecologically [that] we would oppose in principle any mining development upstream of it". Fox also said: "Our view is that if [Noranda] operations were carried out in accordance with present plans they would themselves constitute a serious danger to the environment ... The operation of the ... mine concurrently with the Ranger and Nabarlek mines would involve bringing into the region an excessive number of Europeans. [Noranda] should therefore not be allowed to proceed" (49).
Koongarra is part of the Kakadu National Park. However, the Koongarra Project Area Act, rushed through in June 1981, just before the Australian Liberal/Country party coalition lost control of the Senate (50), enabled Denison to tap into new reserves in the National Park zone. Federal opposition (ALP) spokesperson S West at the time declared that this act made "... a farce of the definition of a National Park, particularly when Kakadu has been nominated by this government for World Heritage listing" (51).
The Alligator Rivers study, commissioned by the Australian government and the mining industry in 1977, expressed fears that mining at Koongarra could increase heavy metal and radioactive deposits flowing onto the plains, which would build up during the dry season "... to the disadvantage of the native aquatic species in the region, both plants and animals ... A further consequence could be a serious change in the quantity of water for either drinking or irrigation purposes" (52).
This study also reported that mining, increased road traffic, explosions and dust could degrade Aboriginal art sites in the region, including prehistoric sites like Anbang-bang, "perhaps older than 40,000 years" (53), which constitute "one of the world's most important storehouses of information about prehistory and the art of hunting and gathering man" (54).
In 1984 the Hawke government confirmed the defacto moratorium on uranium mines in the Northern Territory which effectively included Koongarra and Jabiluka, though not Ranger and Nabarlek (see Queensland Mines) (55).
In 1983 the Australian federal government declared its intention to incorporate Koongarra and Jabiluka into stage two of the Kakadu National Park, thus effectively preventing all mining. A US$36M "tourist package" deal was being offered to Aborigines in the region with the promise of 1300 permanent jobs and a massive increase in tourism in the area. The Northern Land Council, which functions under the Aboriginal Land Rights Northern Territory Act of 1977 (56) vigorously opposed this deal, and - it seems - a large number of traditional (Aboriginal) land owners have supported the development of both the mines in question (57).
Towards the end of 1983, Denison concluded an agreement with many of the traditional owners, which gave them a 25% stake in the project (58).
This was, however, the tail end of a lengthy process of attrition, pre-emption, seduction and (many would say) deceit. It started in 1981 with the arbitrary (and probably illegal) excision of the Denison lease from the Kakadu National Park - an action viewed with helplessness, anger and alarm by local Aborigines (59).
The 1981-82 Annual Report of the Standing Committee on the Social Impact of Uranium Mining on the Aborigines of the Northern Territory (sic!) criticised the ability (or willingness) of government and territory institutions to convey meaningful information to Aborigines about Koongarra and other uranium projects in the region (60).
What is certain is that some Aborigines in the area have voiced their opposition to the Denison mine from the early days. On May 1 1981, a meeting of owners of the land asked: "How can it be that the minister can give our land away to a mining company without asking what we think? This is not self-determination: this is the same as always, white fellahs making their own decisions about what is good for Aborigines." They then decided to break off all negotiations with Denison (61).
One family - the Aldersons - remained adamant in their opposition to any negotiations through the whole period (62). Two of the designated 29 traditional owners in early 1981 Violet McGregor and Jessie Alderson - were opposed to deals with Denison. On 23 January 1981 they cabled the Northern Land Council (NLC) thus: "Please be advised that we will not attend further meetings. Extremely dissatisfied with NLC's conduct of Koongarra meeting and subsequent press release implying Murrunburra totally support Koongarra mine ... Request apology through media Australia wide for misrepresentation of our views and ridiculous claims of two years prior consultation on Koongarra site" (63).
By the middle of the following year, the traditional owners were still holding out, forcing the NLC to defer negotiations with Denison (64). That December, negotiations were formally blocked when the Aboriginal Land Commissioner, Justice Kearney, advised the Aboriginal Affairs Minister that votes by three of the Aldersons against the project meant it couldn't proceed (65). On that occasion Denison offered 10% royalties to the Aboriginal community (51).
Finally, after continuing negotiations through 1982 (23), Denison agreed to restrict its mining proposal to nine leases on the original site outside the area covered by Aboriginal claims. This meant that mining could proceed without formal Aboriginal permission (66).
Denison is, generally speaking, a company which has been comparatively free from criticism, as distinct (for example) from Union Carbide, Rio Algom, Kerr-McGee, United Nuclear and other primary uranium producers.
However, in 1977 six hundred people turned out to oppose its plans to open up a US$27M open-pit uranium mine near Clearwater, British Columbia (BC) in Canada. Among those who attacked the proposal were the BC Medical Association, the United Church environmental groups, and - most remarkable of all, given their reliance on uranium for a "living" - members of the USA/United Steelworkers of America. The Steelworkers came straight to the point: "We feel we are being deceived by this company, which comes to BC to establish a uranium mine and tries to assure us that there will be no problems ... We say that the Elliot Lake experience established beyond any doubt that there will be problems."
The Federal Environment Minister also agreed that local people didn't want the mine and said it had a "disturbing" potential for environmental damage (67).
Then, in 1981, Denison - along with Eldorado Nuclear, Gulf Minerals Canada (see Eldor Resources), Uranerz Canada and Rio Algom were charged by the Federal Canadian Government with fixing domestic uranium prices during the era of the uranium cartel (68). This was a charge which Denison vigorously rejected, maintaining that the price-fixing was at the "direction and instigation" of the Canadian Government (69) ... which indeed it was! The Canadian Government later bowed out of legal action (70).
In 1979 Denison announced a merger with the US energy concern Reserve Oil and Gas at a price of US$525M (71).
The Dome group sold its 10.1% holding in Denison in early 1983 (72).
In early summer 1984, the company announced that experiments in filling-in working stopes at its Elliot Lake mine with uranium tailings did not noticeably increase radon and radon decay product ("daughters") radiation in the mine atmosphere (73).
Denison acquired Seagull Petroleum in 1984, and reported at the end of that year that its 50% owned Quintette coal mine was expected to reach contract levels within three months (74). In 1987, Denison, together with an un-named partner, acquired 60% of, and therefore control over, the Midwest Lake deposit: at the time of writing, it is not known whether the partners of the original JV (Canada Wide Mines, Bow Valley and Numac) reduced or sold out any of their holdings (75). Latest drilling indicates more than 20,000 tons of uranium, grading 1.1%, and Denison anticipates production in the 1990s (75, 76)-. Also in 1987, Denison acquired the claims of Canuc Resources, south-west of its main Elliot Lake mine, which it plans to develop (75). Canuc's uranium interest had remained dormant until then.
Between 1989 and 1990, Denison underwent a massive restructuring, and cost-cutting in the face of severe losses. In late 1990, a new president, Bill James, was brought into the company to save the enterprise (77). It sold virtually all its oil and gas properties worldwide (78), and offloaded its potash interest in the 60% owned Denison-Potacan mine in New Brunswick, in early 1991 to the West German firm Kali and Salz and the French Enterprise Miniere et Chimique (79). Its Quintette coal business, which had promised so well during the mid-eighties, became bankrupted, due to the squeeze on the world coal and steel markets (80) and management control of the company was taken over by Teck Corporation in March 1991 (81). Denison also sold various gold properties, despite forays into new regions such as Venezuela (82).
Bill James announced in December 1990, that Denison would be up for sale (83) and although at the time of writing, no buyer has been forthcoming, it has been rumoured that Rio Algom, its partner at Elliot Lake, and Inco, would be likely purchasers (84). James has been quoted as saying that Denison would "like to stay in uranium" (84), although the Elliot Lake operations have faced not only production cuts (down by 11.2% in 1989) (85) but higher than average costs (its 1987 shipments were, at C$44.50 a pound, some 70% above the value of Saskatchewan shipments) (86) and pressure from Ontario Hydro to reduce its prices after 1993 (87).
In 1990, Denison announced the laying-off of 28% of its workforce at Elliot Lake, and reduction in output from 3.3 million pounds a year to 2.7 million pounds by 1991 (88): this followed an announcement by Rio Algom that it too would be closing three of its mines in the region (89).
Then, in early 1991, the company said it would be laying off more than one third of the mine's total workforce of 1060, and be cutting back production even further (to 1.4 million pounds). By this time only Ontario Hydro was buying from Denison at Elliot Lake (90).
Ironically, Denison's other uranium interests seem far from foundering. Its Koongarra project has not been abandoned; while the MidWest deposit could come into production in the near future depending on markets (Toronto-based Redstone Resources purchased a 2% gross royalty in the project from Esso Resources Canada in late 1990) (91).
And in early 1991, the company announced that it was forming a JV with Freeport Uranium Recovery Co to produce uranium oxide from two processing plants in Louisiana, with Freeport as operator and Denison as marketer (92). While Denison could still be sold and Rio Algom is clearly a putative buyer, it is interesting as a footnote to record that the former sued the latter in 1990 for allegedly causing damage to its mining activity, through adjacent operations at Elliot Lake. Denison claimed that "violent rock bursts" between 1982 and 1985 resulted from the collapse of rock pillars, due to Rio Algom's underground mining which was separated from Denison's by only a 12 metre rockwall. Denison was seeking C$35 million as compensation for ore supposedly tied up, as stabilizing work was carried out and its mining plans were changed (93).
Pressure from Ontario Hydro to reduce its prices after 1993 (94) was of no avail and in May 1991 the utility cancelled its contract, thus ensuring the closure of Denison's Elliot Lake operations by the end of 1992 (95).
Further reading: For a lucid description of the Koongarra project, its implications and impact, see P Coleing's paper for Nuelevr Alert, Sydney, 5/1983 (Total Environment Centre).
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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