Rising uranium prices help resurrect N.M. mining town

The comeback of nuclear power means good things for Grants, N.M.

GRANTS, N.M. (AP) — When a uranium boom hit this former logging and farming community in the mid-1970s, housing was so scarce people slept in campgrounds and cemeteries. Schools, hospitals and bars were jam packed with miners and their families. And young people could buy cars and houses with the good pay they earned in the mines.

It was the second boom for the central New Mexico town’s uranium industry that started when a Navajo sheepherder, Paddy Martinez, picked up a bright yellow rock in 1950.

Then the so-called “Uranium Capital of the World” suffered the bust. In the early ’80s, the price of uranium plummeted as the anti-nuclear movement grew and domestic demand stagnated. Eight thousand jobs disappeared within two years.

“It kind of devastated Grants with all these people leaving, houses empty everywhere, businesses closing,” said Terry Fletcher, the president of Rio Algom Mining LLC who has lived in Grants for 50 years. “On my block alone, every two out of three houses was empty.”

Current and former residents hesitate to call Grants a sleepy town. After all, jobs are to be had at three state prisons in the area. Still, boarded-up businesses are visible on the town’s main drag that runs parallel to Interstate 40.

But these days something is stirring. Hotels are booked, restaurants and retail businesses are busy, and local drilling companies are swamped with work.

With the price of uranium up to $90 to $100 per pound — after a low in 2003 of $7 a pound — Grants is anticipating good economic times ahead.

Uranium company executives say uranium could be a $2 billion industry for New Mexico over its lifetime and bring in up to 4,000 jobs to the Grants area.

“Grants is going to be a very significant production center,” said Rick Van Horn, executive vice president and chief operating officer for Texas-based Uranium Resources Inc. “They will be back in a position of importance in this uranium cycle.”

With the federal government pushing for less dependence on foreign oil, about 30 nuclear power plants are set to come online to meet domestic energy needs. Currently, the United States produces 4 million pounds of uranium a year, but the country will need 40 million pounds a year to meet future demand, Van Horn said.

The key to restarting the industry in New Mexico is to build a mill that can process the 300 million pounds of known uranium in the Grants mineral belt, which extends from Gallup to Albuquerque.

Uranium Resources is poised to build what could become the largest uranium mill in the United States. Should all go smoothly, Van Horn said the new mill could start operations by 2012. At its peak, it would employ 200 people and process 8,000 tons of uranium per day.

Several mining companies, which Van Horn hopes will sign up for capacity at the proposed mill, are conducting exploratory drilling in the Grants area.

Bill Brancard, director of the New Mexico Mining and Minerals Division, said since April 2006, five exploration permits in the Grants area have been granted.