Environmentalists and local government officials have for years lined up to resist the return of uranium mining to Colorado and the West .
It turns out that the return of the Big U to a prominent role in the region’s mining industry is being forestalled not by public activism but by market forces.

In the last several months the collapse of uranium prices (from around $130 a pound at their peak to about $42 a pound today) has put a crimp into the ambitious plans of several mining companies to launch or restart operations in Colorado. Canadian industrial Denision Mines Corp., which has an office in Denver, has shuttered two of its five mines on the Colorado Plateau and shelved plans for a major expansion of uranium oxide production in the U.S. Battered by falling prices, Denison’s share price fell 30% just last week, to below a dollar, and has plummeted 89% from its highs. Denison has slashed its overall production forecast of 2 million to 2.4 million pounds of uranium to 1.3 million pounds or less in 2009.

Similarly, the state-run Korea Electric Power Corp. earlier this month cancelled a preliminary deal with U.S. Yellowcake Mining Corp. to develop uranium mines in Colorado.

Long-term, with a nuclear-power renaissance forecast in this country and huge plan for new reactors in the developing economies of India and China, uranium still looks like a strong bet. Though the U-mining business is tainted by years of environmental despoliation and adverse public health effects in the Southwest, the U.S. has the world’s fourth-largest reserves of uranium and annual production -currently around 4 million pounds a year, far below the 55 million to 60 million we consume - will almost certainly go up as prices start to recover.

Plans for the most controversial uranium project, Powertech Uranium Corp.’s proposed project in Weld Country, near the booming population centers of Northern Colorado, “are quietly progressing, as the mining company awaits the final crop of tests on the land, air and water where it hopes to build its wells,” reported Rebecca Boyle of Fort Collins Now in a series of articles that recently won a Society for Professional Journalists award for investigative reporting.

The term “wells,” as opposed to “mines,” is accurate because Powertech envisions using a method known as in-situ leach mining, in which oxygenated groundwater is forced into uranium-bearing sandstone layers, and then used to carry the radioactive mineral to the surface.

“Powertech estimates about 9.7 million pounds of uranium oxide lies beneath a 15-mile swath of Northern Colorado,” writes Boyle. Vince Matthews, director of the Colorado Geological Survey, says that more than 20,000 mining claims were filed on federal land in Colorado in the last three years - most of them for uranium.

Uranium prices will have to rise before those claims actually turn into mines (or wells). Already, long-term contract prices have hit the $80 mark, a level considered the minimum for new uranium production in the West to be profitable.

Russian nuclear chief Sergei Kiriyenko, who heads the Rosatom state nuclear corporation, which controls Atomenergoprom, one of the world’s biggest uranium companies, forecast last week that spot uranium prices would rise slowly in 2009, according to Reuters.