Virginia Uranium Inc. releases projections for Coles Hill project

Virginia Uranium Inc. has provided economic projections for the Coles Hill project to the Virginia Coal and Energy Commission’s Uranium Mining Subcommittee.

The report, entitled “Coles Hill Conceptual Study Results Summary,” estimates the facility’s mining and milling operation would employ as many as 350 workers with a payroll of as much as $23 million including benefits, with salaries ranging from $35,000 to $250,000 per year and the project generating as much as $140 million in revenue annually, the report concluded.

Also, construction of the mining and milling operation at Coles Hill would employ as many as 350 people and take as long as a year, according to the report.

VUI hired Lakewood, Colo.-based Lyntek, Inc. to conduct the study. VUI seeks to mine and mill a 119 million-pound uranium ore deposit at Coles Hill, about six miles northeast of Chatham. Virginia has had a moratorium on uranium mining and milling since 1982.

Delegate Lee Ware, chairman of the Uranium Mining Subcommittee, requested the report on behalf of the committee, Ware’s spokesman David Bovenizer said.

“‘Conceptual’ information of what size of operation Virginia Uranium envisions … is necessary to be able to quantify the prospective social and economic consequences of the proposed mining operation,” Bovenizer said. “This information will be essential to quantifying the economic ramifications within the two-pronged socioeconomic study.”

The Virginia Tobacco Commission is providing as much as $200,000 to the Coal and Energy Commission to pay for a socioeconomic study of uranium mining and milling. The study, the second portion of the state’s two-part examination of the impacts of uranium mining and milling, will focus on Pittsylvania County.

The study’s objective is to “address site- and region-specific social, economic and environmental impacts and sustainability factors such as quality of life, infrastructure, local economic opportunities and property and real estate values,” according to the study’s draft at the commission’s website, http://dls.state.va.us/cec.htm.

The National Academy of Sciences/National Research Council is conducting the other part of the study, examining the scientific and technical aspects of uranium mining and milling. That portion of the study, indirectly paid for by Virginia Uranium Inc., is expected to be completed in fall 2011.

Lyntek also estimates investment to start up and build out the Coles Hill project would cost as much as $400 million.

The estimate is based on projected production of a minimum of 1 million tons of ore annually and generation of about 2 million pounds of yellow cake per year, according to the report.

Patrick Wales, VUI project manager, said the start-up costs would include engineering, design, trucks, equipment and construction of infrastructure such as water, sewer, buildings and fences. Also, more than 90 percent of the jobs would go to local residents in Pittsylvania County and surrounding communities, Wales said.

Factoring in employee’s wages and benefits and material costs for the Coles Hill operation, there would be as much as $50 million in direct economic benefit to the community. Direct — including the $50 million — and indirect economic benefit for the community’s economy would add as much as about $300 million, Lyntek’s report said.

“Experience in the mining community suggests that indirect support agreements is about six times the cost of the mining operation, which includes labor and operating costs together,” wrote Nicholas S. Lynn, Lyntek president, in the report.

Wales said direct economic impact would include material costs such as purchasing equipment, office supplies and other items for the mine and mill and maintaining equipment and machinery.

Lyntek’s report also estimates that the life of the Coles Hill mine would be up to 35 years.