Miners having a blast in Utah uranium rush

By Tim Gaynor

MOAB, Utah (Reuters) - Utah mining prospector Kyle Kimmerle has more than a hunch that uranium will make him rich. It is a conviction so strong he has bet his house on it.

"We literally spent every dollar we had in savings, hawked and sold our houses and put everything we owned into this. We went all in," said Kimmerle, who runs a funeral home in this Canyonlands city. "My wife is scared, but I'm not."

He is among a rush of prospectors in the Colorado Plateau mineral belt who are thumping stakes into public land and registering claims, hoping to get rich on the back of record uranium prices.

The boom is reviving the fortunes of a storied mining area in the U.S. Southwest where large uranium ore deposits were first tapped for the voracious Cold War nuclear weapons program in the early 1950s, before suffering a slump.

The Bureau of Land Management said this month a new wave of prospectors have registered some 3,700 claims in the Moab and Monticello areas since October 1 last year, more than twice the total for whole of the previous year.

Prospectors are banking on strong demand for uranium from a resurgent nuclear power industry, as high oil prices and a global effort to clamp down on greenhouse gases blamed for climate change have pushed prices for the metal to $135 per pound, from just $7 in 2000.

"Right now nuclear is the best option," said Kimmerle, as he sipped a milkshake at a diner in Moab, a city hailed as the uranium capital of the world during the first boom.

"This is a once-in-a-couple-of-lifetimes opportunity," he added. "Barring some kind of a worldwide catastrophe, nuclear power is going to be the future."

RAMPING UP PRODUCTION

The hopes of prospectors like Kimmerle, who seeks to parlay his $185-a-time claims into million-dollar revenues from development deals with mining firms, are widespread in the industry.

Companies like Canadian Laramide Resources and Semafo Inc. are seeking to ramp up production in uranium-rich Australia and Niger respectively, while Denison Mines Corp. said it plans to open 10 more mines in the U.S. Southwest by next year.

Denison mine superintendent James Fisher said he expects uranium prices to hold up for 10 to 15 years while depleted supplies are built up to meet a spiraling global appetite for smokeless fuel.

"It's going to take a time for supply and demand to equal out, and until it does, the price is just going to keep rising," Fisher said.

"In that lag, somebody is going to make some money," he added.

Miners, meanwhile, face higher costs this time around as U.S. safety regulations have become more stringent following high-profile coal mining accidents and a better understanding of the dangers of radon gas emitted by uranium ore.