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.”
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.
“They are going to make more money than they are used to, but it’s going to cost them more,” Fisher said.
Large uranium deposits were first discovered around Moab in 1952 by Texan prospector Charles Steen, who went on to make millions of dollars and have his scuffed field boots plated with bronze and displayed in the city’s museum.
Getting back underground to blast through hard rock in pursuit of the graphite-colored seams of uranium ore has reawakened a passion among some families with a long tradition of mining the metal.
“We’ve lost a couple of generations, and we’re just teaching younger ones now how it’s done,” said Mike Shumway, who owns the contracting business in charge of operations at the first Utah mine to be reopened by Denison, the Pandora Mine near La Sal.
“It’s hard to find people who want to work hard nowadays, but we’ve got a handful and they really enjoy it,” he added.
Shumway now has a team of more than a dozen men working at the mine, setting explosives, blasting the rock face and hauling out two to three thousand tons of six pound rock each month in sturdy mining carts.
“Fire in the hole,” shouted one of the miners. After an eight second delay, some 20 charges detonated in rapid sequence, sending a shock wave rumbling up the mine. The miners laughed in exhilartion after the blast.
“It feels really good to be back. My dad done it, his dad done it, and I can honestly say I am having fun,” Shumway, who weathered the downturn by building houses, said afterwards with a grin.
“It’s the only job I know where you can not have enough money for diesel one day and then be a millionaire by the end of the month.”