607 UG (Urangesellschaft) After undergoing several name changes in recent years, Urangesellschaft now prefers to be known as UG or Uran, and its wholly-owned subsidiaries as Uranges (Australia, Canada and USA) (1).
Founded in 1967, when three huge West German companies took up one-third ownership each, it is, effectively, the Federal German government's uranium "arm". The West German state, through its former 44% interest in VEBA held both a direct share in UG and an indirect interest through Ruhrkohle and Steag (see VEBA).
The company's brief is to explore for and exploit uranium deposits, open up mines, trade in uranium products, and extract uranium from phosphoric acid (1). It has supplied around 50% of all West Germany's uranium needs (2). Until quite recently, the company was actively exploring throughout Australia (3), had several JVs in Canada, projects in some twenty US states including Colorado, Utah, Texas (4), New Mexico and Arizona (5), as well as further exploration projects in Botswana, Tanzania, Colombia, Indonesia (6), Brazil, Scotland, Italy and Niger. In its home country it was one of five corporations actively searching for yellowcake in the late '70s (7).
UG's lesser known (and less important) ventures include:
an aerial search for uranium in Botswana in 1977 (8) . When the permit for this was relinquished in November 1978, UG, together with Union Carbide and Falconbridge, took out further ones (10).
a uranium exploration project investigating "targets" in old red Sandstone at Caithness, Scotland, ia 1979 (9).
a uranium exploration contract signed with the Tanzanian government which includes provision for excess profit taxes up to a rate of 75% when they exceed a 25% return on the company's investment - a very favourable arrangement for UG, to say the least (11). Since UG was incorporated on the recommendation of the Federal German government itself, it is little wonder that its major investments have been in countries which are prime trading partners and political allies of the West German state. (Which is not to say that its ultimate criteria are not economic ones:
as its own "background" publication states: "... it is increasingly difficult to acquire mineral rights in or near known uranium mining districts ... [UG] therefore frequently forms joint ventures with local companies which control exploration or mining rights ... In a number of cases UG carries out exploration on its own; but in many cases the joint venture partners are the operators of the projects") (5).Two examples illustrate this close relationship between state and capital.In Brazil, UG is the only non-domestic company to have been granted uranium exploration rights. After prolonged negotiations between the South American military regime and the FRG government, Brazil surrendered its monopoly over uranium in 1975 and enabled the state agency Nuclebras (51 %) to form a JV with the West German company (49%) (12). In the years since, foreign enterprises (notably Pechiney) have become involved in uranium processing and in enrichment (notably Interatom and Steag) but UG remains the front-runner in the mining field (13) . Most recently it expressed interest in exploiting the country's second largest uranium lode (between around 90,000 and 100,000 tonnes reserves and probable reserves) at Lagoa Real in southern Bahia (13). The similarities between the West German-Brazilian deals and those between the European state and South Africa are considerable. They relate to the exchange and secret provision of technology, scientists, enriched uranium and expertise in uranium mining (14). While UG's co-parent, Steag, has been heavily involved in many aspects of these transfers, UG's role has been limited to its involvement in developing the Rossing mine in Namibia. (So far as is known, it has no direct interests in South Africa itself.) It has been quite important, for all that.
There is no substantial evidence to show that the Federal German government directly loaned money for the development of the Rossing mine but, almost certainly, West German utilities have purchased Namibian uranium (14) and UG originally provided the equivalent of 10% of development finance to Rossing Uranium to get the mine under-way (15). UG's current equity interest in the mine is 5%; whether or not it sold part of its original holding to Total (Minatome) is not clear.
The Federal German cabinet was not unanimously in favour of the government risking international opprobrium by endorsing the Rossing project, at a time when it wanted recognition as a UN member, and when it had already been singed by controversy with black African states over its support for the Cabora Bassa dam (14). However, only one cabinet member, Erhard Eppler, publicly disavowed what was to develop into a major cover-up, perhaps the most controversial aspect of which was an apparent contribution from the FRG Ministry of Science to UG's Niger uranium costs, intended to launder funding for Rossing. A number of confidential letters which passed between the FRG's South African ambassador and the Pretoria Secretary for Foreign Affairs, in 1972, illustrate the tendentious nature of negotiations between the apartheid state and the FRG at this time. Not to mention the key role played by UG personnel in the wheeling-dealing- not, however, without attempts by UG to keep themselves at arm's length from embarrassing political scapegoating. It is worth quoting from one of these letters (released by SWAPO in London): "According to Secretary of State Haunschild of the Ministry of Science, which normally contributes 50% of preliminary prospection surveys, the issue with respect to Rossing has been somewhat eased for Urangesellshaft by the fact that in the case of a Central African State, which he did not identify but which was obviously Niger, the Ministry will contribute 75%. Herr Haunschild's version was that Urangesellshaft would be in receipt of a subsidy in respect of all its approved prospecting activities overseas and the Ministry would not inquire too closely into how precisely Urangesellshaft allocated its money. The inference was that Urangesellshaft could use some of the money for Rossing.
"However, when I spoke to Dr von Kienlin of Urangesellshaft in Frankfurt last week, he denied that the extra payments to the Central African State were being received and said that this was no more than a hope and a possibility, on which he did not place much reliance. My impression from my talk with Dr Kienlin was nevertheless that the financial problem was not the principal cause of concern on the part of Urangesellshaft. The real issue was the present uncertainty with respect to supplies from South West Africa and their availability over a longterm period in the future. Neither he nor his company doubted our ability to deliver - the doubts lay with the consumer. Since the uranium would be required for use ultimately in nuclear power stations operated by public utilities or under the supervision of Lander Governments, Urangesellshaft had to take into account that in the minds of many responsible persons concerned in this particular sector, there was a fear that delivery of the uranium would be banned or become impossible because of resolutions adopted by the United Nations and unwillingness on the part of the German Government to act counter to those resolutions. These fears are being played upon by the radical anti-South African elements in this country who have a spokesman in the Cabinet on this question in the person of Herr Eppler" (16).Rossing's uranium was intended as a mainstay of West Germany's nuclear programme during the 'eighties. By the end of the 'seventies, however, the entire future of the country's nuclear industry was in doubt, as environmentalists, Grunen, local administrative courts, and even trade unions, expressed their opposition to various aspects of the atomic state (17). Over the next five years, UG tended to retrench rather than expand. Its interest in Somair's Arlit mine fell from 8% to its current 6.5% (18), while its explorations in the Djado area of Niger, started in 1977, seem to have terminated some years ago (19).
Virtually all its US exploration efforts, commenced in the 1970s with great elan, seem to have been stopped, including:
A JV with Conoco in the Church Rock area of New Mexico;
A JV with Ranchers;
Prospecting with Rocky Mountains Energy Co;
A JV at Tonopak in Nevada, with Federal Resources Corp;
Prospecting in its own right in Alaska (20);
A lease on more than 1000 acres of Carlton County, Minnesota, and several leases in Benton County, Minnesota (21);
A project at Baggs, Wyoming, and another at Date Creek in Arizona, both reported in 1980 to be at "an advanced state of exploration" (22). And, on December 10th 1980, the members of Stop Uranium Mining (SUM) in Vermont, along with other local activists, saw the back of UG after a lengthy legal and political battle to get uranium mining per se banned in their state. More than 30 towns adopted an anti-uranium ordinance, and a bill was passed by the state legislature requiring full debate and approval by both houses of government before any further prospecting was allowed. Commented Ms Cole of SUM: "We battled one of the biggest uranium mining companies in the world and we won" (23).
The most important pull-back in UG's history is quite recent. In January 1986, it announced it was negotiating the sale of "most of its Australian assets, is withdrawing from uranium exploration, and is to close its Melbourne office". "Dissatisfaction with the policy of the Australian Labor government" was cited as one of the main reasons for this action (24).
In the event, UG held onto its more important Australian interests (54). However, there was certainly a long history of doubts within the company about the viability of mining uranium in the antipodes. As long ago as 1978, Casimir Prince Wittgenstein (representing Metallgesellschaft, but clearly speaking for UG as well) was getting disgruntled in Melbourne. Just after the 1977 elections which brought a more pro-mining Liberal Federal government to power, Prince Wittgenstein was complaining: "We have been trying to get this Western Mining (Yeelirrie) thing going for six years. First, the Whitlam Government spiked the wheel and now the Fox Report is out and we haven't got a true definition of what is going on. It is a sort of hotch-potch thing which we cannot see clearly" (25). However, the "Western Mining thing" was soon sorted out, with UG gaining a 10% share interest in Yeelirrie and a similar percentage of production (3), although initially it canvassed for more (26). More importantly, it also gained a crucial 4% stake in the Ranger mine when that project's equity holdings were reorganised into ERA in 1980. With other German corporate interests raising the FRG share in ERA to 14%, UG in 1982 was expressing the hope that Australia's contribution to West Germany's uranium needs would rise from 5.5% to around a third, as expected demand increased from around 2430 tons to 6250 tons by 1990 (27). It was not until 1985 that UG publicly criticised federal Australian policy again. This came soon after the ALP government imposed a ban on uranium exports to France, following French refusal to abandon its Pacific nuclear tests. UG sought permission to send 90 tonnes of uranium from Ranger to the French trading outfit, Enership. Trade Minister John Dawkins accused UG of deliberately trying to jeopardise Australian operations, so it could withdraw from its ERA contracts without penalty and not have to pay inflated prices for 4,350 tonnes of yellowcake awaiting delivery out of the 5,820 tonnes originally contracted. UG hotly denied the allegation, claiming it had no reason to pull out (28). Was it just a coincidence that within ten months it was threatening just that? UG Australia had prided itself on "searching for uranium throughout Australia in its own right, as well as in Joint Ventures" (3). To summarise its involvement over the past fifteen years:
A 4% holding in ERA which (as already mentioned) entitled it to 5,820 tonnes of the product of the Ranger mine.
10% of the Yeelirrie mine in Western Australia, with Western Mining Corp (WMC) holding the other 90%. This has been UG's "principal exploration activity in Australia" (1) - a substantial orebody of fairly highgrade ore, containing 34,000 tonnes of uranium oxide and vanadium (29) with large reserves of lower-grade uranium. For several years the project has been "caught in political limbo" (30) and, even before the ALP government imposed an interim ban on WA mining in 1984, was "further down the track for development than most other uranium discoveries" (30). The withdrawal of Esso Australia from the project (see Exxon) in 1982 (31) did not affect UG's equity - WMC's was increased and for a while improved the project's marketability. However, a deal lined up with the French CEA in 1983 collapsed when the Federal government imposed a ban on uranium exports to France due to resumed French nuclear tests in the Pacific (13). Although the mining industry in Australia has given the strong impression that Yeelirrie does not affect Aboriginal land claims (32), the lie to this was given in 1978 when an Aboriginal delegation from North Queensland visited UG's offices in Frankfurt and addressed the management on behalf of black West Australians. UG's managing director told the delegation, "Mining is a part of civilisation, and Aborigines have to be part of civilisation" (33).
Four years later, at the time of the Noonkanbah confrontation with Amax, other statements were made by Peter Hogarth (Yambilli), Roley Hill (Nulli) and Croydon Beaman, Aboriginal tribespeople living near Leonora: "We been fighting for Yeelirrie. The sacred ground is each side of Yeelirie. 'Yeelirrie' is white man's way of saying. Right way is 'Youlirrie'. Youlirrie means 'death', Wongi (Aboriginal) way. Anything been shifted from there means death. People been finished from there, early days, all dead, but white fella can't see it.
"Uranium they say, uranium they make anything from it, invent anything, yet during the war when the Americans flew over, what happened to Hiroshima? And that'll happen here too if they're messing about with that thing. They never learn."
Jakson Stevens, chairman of the Nnanggannawili Community at Wiluna, was also quoted in 1980 as saying: "Uranium mine. We got one up here. We trying to put a block to it. It's Aboriginal sacred site. If they, the Government and the mining companies came in here, we'll be pushed away from our own country, own place, to the town, Wiluna. No work there" (33).
During their 1978 visit to UG, the North Queensland delegation also protested at UG's explorations in the north-western part of the "sunshine state" (33), specifically at Westmoreland, 400km north-west of Mount Isa. This prospect, in which UG held a 37.5% interest with Queensland Mines (40%), Minad (12.75%), and IOL Petroleum Ltd (9.75%), contains an estimated 11,400 tonnes identified reserves (34) and is administered by UG. However, an estimated 15,000t would be necessary to make the project financially viable (30), and the uranium is distributed in seven deposits. Even before the ALP government came to power, it did not look like Westmoreland would come on stream (34) and it was "downgraded substantially" (35).
Similarly, in the Ngalia Basin, north-west of Alice Springs in the Northern Territory, prospects for development were looking thin in the early 1980s. The original joint venture was divided, after disposal of the AAEC's original interest in the project and controversy surrounding division of the spoils (3). UG held 25.54% of the Ngalia Basin (Exploration Operating Agreement) and 33.52% of the Ngalia Basin (Discovery Operating Agreement) - the latter "far more advanced" than the former (30) but neither standing much chance at the present time.
At Manyingee in Western Australia, UG held a JV interest with Aquitaine Australia and Minatome (the administrator). Drilling had started by 1982, and in situ leaching was being considered (30).
Mineral rights held in New South Wales appear never to have been exercised (22).
UG began exploring in Victoria in 1977 (49) with Northern Mining (50%) though it was not for some while that the environmentalist movement in the state caught on to the potential dangers. Friends of the Earth then conducted a campaign against the company's drilling in the Mansfield area, 6000km down the famous Snowy Ranges into the Avon and MacAllister water catchment areas. FOE called for a moratorium on activities which threatened one of the last wilderness regions in the state (36).
A JV (70%) with Idemitsu at Fog Bay, near Darwin in the Northern Territory, announced early in 1982, involved exploration on a fairly large lease, No. 3149. Nothing further has apparently been reported on this prospect (37).
Where does all this leave UG for the near future? The simple answer is: Canada. For it is here that the company has been consolidating its explorations and actually resumed uranium production from a plant which temporarily ceased operations in 1982. This was the ESI Resources uranium-from-phosphates project in Calgary, Alberta, in which Uranges Canada holds 49%. By September 1983, the plant was operating at 90% capacity (13).
There is hardly one corner of the uranium-rich lands of Canada in which UG has not had some interest. As UG's own self-adulatory material puts it: "Reconnaissance and exploration projects extend from the East Coast to the Yukon Territory" (22).
However, nothing has been heard for some time from the following:
One area from which UG has not yet withdrawn has featured in one of the most controversial cases in the recent history of indigenous land claims. The Baker Lake region of the Northwest Territories (NWT), located approximately at the geographic centre of Canada, is 150 miles south of the Arctic Circle. The only inland settlement in the Arctic (42), it is the home of hundreds of Inuit hunters dependent on caribou (reindeer). Urangesellschaft entered the area in the mid-'seventies along with several other mining companies. By 1979 it had laid out C$1 million on exploration of uranium deposits (43) and by then was constituting the "major threat" to the Baker Lake Inuit's livelihood (44).The Brinex project in Post-Makkovik, Labrador, which UG discovered along with Brinco (then controlled by RTZ) (38). Although developed by the two companies (39) (indeed it was, according to UG, "By far [its] most advanced project [in Canada]") (5), Brinco transferred UG's 40% interest to Commonwealth Edison in 1979. The project was later halted by the Newfoundland government (see Brinco for full details).
The Newfoundland moratorium on uranium mining also halted exploration at Cape Breton (40).
Uranium exploration with Scandia Mining and Exploration Ltd (20), as well as in its own right, in Nova Scotia, Manitoba and the Yukon, appears to have come to little or nothing (5, 41).
Prospecting at both the Johan Beetz and Mont Laurier prospects in Quebec in the 1970s (41) along with the SDJB (20).
A reported share in early tests at Agnew Lake (20), a project which closed down in 1983.
A joint venture with SMDC in the Rabbit Lake area of Saskatchewan, and other exploration projects at Charlebois Lake (a JV with SMDC and Denison) (41) set up in the 'seventies; also exploration in its own right in the Dubawnt Basin and at Hatchet Lake in northern Saskatchewan (5). Assisted by the Inuit Tapirisat of Canada (ITC), the Baker Lake Inuit obtained a temporary moratorium on exploration in 1978, in areas where caribou breed or calve, and where important water crossings are located (42). (In many ways their arguments foreshadowed those used by the Sami of northern Norway in their heroic efforts to stop the Alta Kautokeino dam a few years later.)
In 1979, they went to court to try and establish their aboriginal rights to protection from activities deleterious to their traditional lifestyle. Ranged against them were six uranium exploration companies - Pan Ocean Oil, Cominco, Noranda, Western Mines, Essex Minerals and, at their head, UG.
These companies argued, not only that uranium mining or exploration did not substantially threaten the caribou or their human dependants, but that aboriginal rights per se had been extinguished by a Royal Charter of 1670 which ceded the land to the Hudson's Bay Company (45).
The upshot of a very complex and costly trial was an historic recognition of aboriginal land rights in the north, severely compromised by a ruling from Judge Patrick Mohoney that the activities of UG and its confreres did not constitute a "significant factor" in the decline of caribou herds (45). Had aboriginal rights been equal to "property rights", said the Judge, certain restrictions might have been ordered (46). The C$100,000 costs chalked up by the Baker Lake Inuit and the ITC - not without the moral support of many anti-nuclear groups in North America - left the community weakened for the future in any case-by-case attack on specific mining projects, although Mohoney's ruling put the companies on notice that the Inuit were prepared to fight any future proposals (46).
As it was, the ban on uranium exploration was lifted, and UG, in particular, arrogantly proceeded as if nothing had happened. Indeed, in 1984, UG announced two new uranium zones in Baker Lake: a longish seam of fairly lowgrade uranium at the Sissons-Schultz South property and, more importantly, a mineral strip nearly 6 metres wide and 100 metres deep, grading at 0.75% U308 on its Lone Gull property north of Judge Sissons Lake (47). (In 1983, Dae Woo bought into this property) (48). By the end of 1984, revised reserves at Lone Bull were put at an attractive 16,000 tons uranium grading an average of 0.39%.
In 1986 UG carried out what it called a "successful" pre-feasibility study for the Baker Lake, Kiggavik (formerly Lone Gull), deposit. Output at more than 1400 tons a year of uranium could be expected from the US$200 million project, with diluted resources exceeding 15,000 tons uranium in ore grading at 0.4% (50); though a later report puts it at 0.6% (51). Native Press obtained a copy of the study, which showed that production was expected in "three to four years" after environmental approvals and final decisions had been carried through. The full feasibility study was due to be completed by the end of 1989, a production decision by the following year, and start-up in 1993-94 (52).
The company also wanted to build an airport, a winter road, and a marine terminal. As a sugar on the pill to local, mainly indigenous, communities, UG offered various types of training, preferential employment, and alternative employment in the decommissioning phase - the usual sop to native northerners (cf Key Lake). The local MP, Gordon Wray, had already doubted that the company's plans would assist local people very much, and pointed out that the mine would be the first open pit ever operated "in the barren lands" (52). The company conceded possible disturbance, but claimed that the local caribou from Beverly and Kaminurak would be "generally" unaffected or "only to a limited extent" (52).
By mid-1988, UG stated that it was seeking partners for the Kiggavik project, and that "several possible international partners" had been found: it also conceded that the project was not currently economically feasible, and that it required some long-term contracts: it was prepared to sell 44% interest in the mine (51).
The CEGB purchased 20% of the equity in 1989, and the South Korean government also bought into the project (53).
Opposition to the Kiggavik mine gathered weight during 1989 and the following year. The Canadian National Federation of Labour came out against the project (55), the local Keewatin community mobilised 1700 people behind a petition to stop it, and they were supported by a wide variety of organisations, including the Inuit Circumpolar Conference (ICC), the Inuit Tapirisat of Canada and Nuclear Free North (56).
In late 1989, UG announced the results of interim feasibility studies which showed that mineable reserves at the deposit were 3.7 millions tonnes grading 0.5% U3O8: the operation would probably involve open-pit feed of 350,000 tonnes a year, with a waste-to-ore ratio of 17:1, producing an average of 1600 tonnes of uranium oxide each year (57).
UG then had to present its Environmental Assessment Report (EAR) to the Federal Environmental Assessment Review Office (FEARO) and submit it to examination by the community in public hearings. This it did in late 1989 (57).
The response was further alarm, despondency and militancy. FEARO found the EAR wanting - in particular it determined that UG had not given enough information on the mine's impacts to the local community (58).
UG was sent back to the drawing-board and, in response, asked FEARO for an "indefinite delay" to the public hearing (59).
In arguing against the project, the Inuit of Baker Lake had turned out in force at the local hearings in 1989. Reported the Native Press: "... some people broke down in tears as they urged the panel to block the mine. Most of my relatives, brothers, sisters, parents, are buried around the site," said Janet Ikuutak, who was born nearby. "Every spring the land grows so green and beautiful, and the berries ripen. But the mine will prevent that" (58). It seems the people may, in fact, have prevented the mine.
Contact: Baker Lake Inuit, c/o ITC, 3rd floor, 176 Gloucester Street, Ottawa, Ontario, Canada K2P OAG.
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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