See also - Information on the new proposal for Beverley. 653 Western Nuclear Inc
Phelps Dodge acquired Western Nuclear in 1971, and with it three uranium mines at Crooks Gap together with a mill near Jeffrey City, Wyoming, the Sherwood mines and mill near Spokane, Washington, and a 45% interest in various small orebodies (the "Ruby" mines) near Grants, New Mexico (1). Later Western Nuclear acquired a 50 interest in the Beverley Uranium Project in South Australia (2).
As of 1982, its mill at Wellpoint, Washington, was operating at 2,000,000 tons of ore a day (3). The company was in 1980 rated the western world's eighteenth biggest producer of uranium -1037 tons produced as against its nearest rival Gencor with 1091 tons (4) . It was also the USA's seventh biggest producer (4). At the end of that year the company had contracts to deliver just over ten million pounds of U3O8 until 1995 (2).
Within less than two years, however, Western Nuclear was badly hit by the weakness in uranium prices. In mid-July 1982 it closed its uranium mines in both New Mexico and Washington "indefinitely" (5). Only 45 workers were left at Jeffrey City by the end of that year, compared with about 600 in its heyday in 1978 (6).
The company's loss for that year was US$ 1.4M and would have been much higher had it not been for the sale of its retained royalty interest in a high-grade (un-named) uranium mine in Arizona (7).
Western Nuclear's fortunes were not aided by the fact that it was named (along with Getty, Gulf Minerals, Gulf Oil, Homestake, Rio Algom, RTZ Services, and its parent Phelps Dodge) by WPPS alleging breach of supply contracts thanks to the operations of the cartel (8).
Although Western Nuclear that year gained a court ruling that the dear old WPPS/Washington Public Power Supply System was itself in breach of contract, the litigation was going to be a lengthy one, and costly to Western Nuclear. As the Mining Journal commented at the time: " [W]ith spare capacity throughout the US nobody is going to want to purchase any of the uranium ... interests of the [Phelps Dodge] corporation" (5). However, in early 1984 the company recovered US$25M in settlement of the WPPS suit (9).
In late 1983, the company's fortunes also began looking up, as it reopened its Sherwood operations on the Spokane Indian Reservation in Washington state (10). A year later, "tentative preparations" were made to reopen the Ruby underground mines, 45 miles west of Grants, New Mexico, which the company acquired for US$10M from the State of New Mexico in 1979 (12) - and which are situated on Navajo land (Ruby 2,3 and 4) (13). Seventy employees were to be rehired (they were laid off four years earlier) and milling would be carried out at the Quivira plant operated by Kerr-McGee's Quivira Mining Co (11).
The company recorded deliveries of 275 tons of U3O8 from its mines in Wyoming and Washington in 1983 and estimated its total uranium reserves at 14.2 million tons, containing 16,500 tons of uranium oxide (14).
As well as participating in the shelved Beverley Uranium Project, Western Nuclear also participated in the 1970s in a uranium exploration JV in the Northern Territory of Australia along with Pancontinental Mining (50%) and Buka Minerals (25%) (15).
It was also believed to have prospected for uranium in Namibia (16). Together with Ultrana Nuclear and Mining of the Philippines it joined a uranium search on Negros Island in the Philippines in 1980 (17).
The company could also have used two Navajo ventures as "fronts" for uranium exploration in the late '70s and early '80s. Shadow Mining Corp and the Western Navajo Mining Corp, set up with the support of now discredited extribal chairman Peter McDonald, expressed interest in building a mill and buying ore from Navajo corporations. A suit was filed in December 1978 by 90 Navajos against the Departments of Energy, of Interior, and of Agriculture, as well as the Nuclear Regulatory Commission, the Tenessee Valley Authority, and the Environmental Protection Agency, arguing that environmental impact statements were inadequate and local people (to a large extent Native Americans) poorly informed. Friends of the Earth and the New Mexico Navajo Ranchers Association were the co-plaintiffs. The case was lost in the Federal District Court in September 1979 (18).
In 1977, Federal American Partners bought Western Nuclear's 86.9% stock interest in Allied Nuclear Corp and thus acquired uranium claims in the Gas Hills district of Wyoming as well as 37 other claims owned by Western Nuclear near Allied's property. In return, Western Nuclear got 750,000 lb of uranium oxide. These new reserves enabled Federal American Partners to expand and to meet its contracts with the Tennesse Valley Authority (19).
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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Page last updated January 18, 1998.
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