DRC-2010-003701 - 0901a06880199276

DENISO
MINES
June 22, 2010
VIA PDF AND FEDERAL EXPRESS
Received
JUN 20iO
Division of
Radiation Control
c
DRC-2010-003701
Denison Mines (USA) Corp.
10U 17tli Street Suite 950
Denver, CO 80283
USA
Tel: [phone]
Fax: [phone]
www.deni8onniine8.com
Mr. Dane L. Finerfrock
Co-Executive Secretary
Utah Water Quality Board
State ofUtah Department of Environmental Quality
195 North 1950 West
P.O. Box 144820
Salt Lake City, UT 84114-4820
Dear Mr. Finerfrock:
Re: May 4, 2010 DRC Inspectton of New Decontamination Pad:
Cease and Desist Compliance Order, Docket No. UGWlO-04
Notice of Violation and
This letter is in response to the foregoing Notice of Violation and Cease and Desist Compliance
Order (the "Notice") dated May 13, 2010, which Denison Mines (USA) Corp. ("Denison")
received on May 24, 2010. The Notice lists five violations (the "Violations") of the White Mesa
Mill's (the "Mill's") Ground Water Quality Discharge Permit No. UGW370004 (the "Permit"),
based on Division of Radiation Control ("DRC") findings after an inspection on May 4, 2010 of
the Mill, relafing to the Mill's new decontamination pad.
Pursuant to Utah Code Annotated 19-5-111 (1953 as amended), this letter describes:
a) the root cause of the noncompliance;
b) steps that have been or will be taken to correct the violation;
c) date when compliance was or will be regained; and
d) steps taken or to be taken to prevent re-occurrence of the noncompliance.
Denison acknowledges that regulatory compliance relating to the new decontamination pad at the
Mill was not handled appropriately for a number of reasons, as detailed below, and responds to
the Notice as follows:
Cease and Desist Order
As required by the Notice, Denison ceased and desisted all activities at the Mill's new
decontamination pad, effective May 11, 2010.
1. Part I.D.4 of the Permit for construction, and operation of a new wastewater treatment
or storage facility without submittal of engineering design plans and specifications, and
prior Executive Secretary review and approval.
a) Root Cause of the Noncompliance
In a letter dated October 13, 2008 to the Executive Secretary, in response to an October 7, 2008
email from DRC staff, Denison stated that in its view the new decontamination pad is a part of
the Mill process circuit and should not be considered to be a "new waste or wastewater disposal,
treatment, or storage facility" as contemplated by Part I.D.4 of the Permit, and explained in detail
why Denison believes that Part I.D.4 of the Permit does not apply to construction of the new
decontamination pad.
The October 13, 2008 letter was followed by a conference call on November 24, 2008 between
Denison, the Executive Secretary and DRC staff. By an email dated December 2, 2008, DRC
staff advised Denison that DRC would agree that no authorization is required for the design,
construction, or operation of the new decontamination pad so long as wash water in the settling
tanks does not exceed the State groundwater quality standard.
In an effort to resolve this issue, and because it would not be realistic to expect that the wash
water in the settling tanks would meet the State groundwater quality standard, over the next
several months Denison and DRC discussed possible options for engineering design and retrofit
construction that could result in an Executive Secretary approval of the new decontamination
pad. This resulted in a letter from Denison to DRC staff dated June 5, 2010 in which Denison
proposed several conditions to be included in the then upcoming Permit amendments, which
would address this issue. A similar, but not identical set of conditions were included in the draft
Permit that was sent for public comment on September 2, 2009. The Permit was finally amended
to include those condifions on January 20, 2010.
It was Denison's understanding that this disagreement on the interpretafion of Part I.D.4 arising
in 2008 was resolved in 2009 through the addifion of these condifions to the Permit. However,
Denison acknowledges that it would have been more appropriate to have consulted with the
Executive Secretary prior to construction of the new decontamination pad, which involves below
grade water settling tanks, in order to obtain the Executive Secretary's interpretation of the
applicability of Part I.D.4 of the Permit to this type of activity.
b) Steps That Have Been Taken to Correct the Violation
Condifions were included in Part I.H.4 of the Permit on January 20, 2010, to address this issue.
c) Date When Compliance Was or Will be Regained
Compliance will be regained upon satisfaction of the condifions in Part I.H.4 ofthe Permit.
DENISO
MINES
d) Steps Taken to Prevent Re-occurrence of the Noncompliance
This is a one-off circumstance that is not subject to re-occurrence.
2. Part I.H.4(a) for failure to submit an updated DMT Monitoring Plan within 30 days of
Permit issuance, or by February 19, 2010.
a) Root Cause of the Noncompliance
Part I.H.4 of the Permit requires that within 30 days of issuance of the revised Permit on January
20, 2010, Denison will submit an updated Discharge Minimizafion Technology Plan ("DMT
Plan") and Contingency Plan that reflect the requirements of Part I.H.4 of the Permit. A revised
DMT Plan and Contingency Plan were included as Attachments A and B to a letter to the
Executive Secretary dated March 12, 2010 in response to a February 4, 2010 Request for
Information.
Similarly, Part I.H.4 of the Permit requires that within 30 days of issuance of the revised Permit
on January 20, 2010, Denison will submit an updated DMT Plan that reflects the requirements of
Part I.H.5 of the Permit, as well as as-built drawings of the exisfing decontaminafion pad. A
revised DMT Plan was included as Attachment A to the March 12, 2010 letter. The as-built
drawings of the existing decontamination pad were included as Attachment E to the March 12,
2010 letter.
As stated in the March 12, 2010 letter, proposed revisions to the DMT Plan to address the new
decontamination pad were submitted to DRC on June 29, 2009 and November 16, 2009 and had
been under discussion with DRC, culminafing in DRC's February 4, 2010 Request for
Information which Denison received on February 12, 2010. Denison had therefore submitted an
updated DMT Plan, as contemplated by Denison's June 5, 2009 letter and as subsequently
required by the Permit, prior to issuance of the Permit. Further, as the resolution of the revisions
to the DMT Plan for the new decontamination pad were relevant to the revisions to the
Contingency Plan for the new decontamination pad and to the revisions to the DMT Plan for the
existing decontamination pad, the submittals required under Parts I.H.4 and I.H.5 were submitted
together with the other materials in response to and within 30 days of receipt ofthe February 4,
2010 Request for Informafion. Denison interpreted the February 4, 2010 Request for
Information as extending the 30-day time period specified in the Permit for the items not
previously submitted to the Executive Secretary. Otherwise, Denison would have had only 7
days to incorporate its responses to the Request for Informafion into the revised DMT Plan and
Contingency Plan required under Parts I.H.4 and I.H.5 of the Permit.
b) Steps That Have Been Taken to Correct the Violation
As stated above, Denison submitted an updated DMT Plan prior to issuance of the Permit.
However, a fiarther updated DMT Plan was submitted to the Executive Secretary on March 12,
2010 in response to the February 4, 2010 Request for Informafion.
DENISO
MINES
c) Date When Compliance Was or Will be Regained
Compliance was achieved on or before March 12, 2010.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
The March 12, 2010 letter was in response to a specific set of circumstances that is not expected
to re-occur.
3. Part I.H.4(b) for failure to submit engineering drawings for the steel liner and leak
detection system and receive Executive Secretary approval before liner construction.
a) Root Cause of the Noncompliance
Mill operations staff were not aware of a commitment to submit engineering drawings for the
steel liner and leak detection system and receive Executive Secretary approval before liner
construction, because those condifions had not yet been adopted in an amended Permit. It
appears that Mill operations personnel were not aware of the status of discussions between
Denison and DRC relafing to these matters, and mistakenly based their operafional decisions on
the then approved Permit and not on draft Permit conditions that were not yet in force.
However, Denison acknowledges that, even though the draft Permit conditions were not then in
force, it was implicifiy agreed between Denison and DRC that Denison would follow the draft
conditions. In most circumstances. Mill operations staff follow approved and not draft Permit
and License conditions, and, apparently. Mill operafions staff were not aware of any informafion
that would cause them to vary from this approach in these circumstances. This reflects a break-
down in communication between Denver and Mill operations personnel, contributed in part by
the long period of time during which these matters were under discussion between Denison and
DRC.
b) Steps That Have Been Taken to Correct the Violation
As-built drawings of the steel liner and leak detection system have been provided to the
Executive Secretary for review, and Denison is prepared to make any changes to the actual
installation of the liner and leak detection system as may be required by the Execufive Secretary
after review of the as-buiU drawings.
c) Date When Compliance Was or Will be Regained
Compliance will be achieved upon Executive Secretary approval of the use of the new
decontaminafion pad.
d) Steps Taken to Prevent Re-occurrence of the Noncompliance
This is a one-off circumstance that is not expected to re-occur. With respect to communicafions
between Denver staff and Mill operafions personnel, steps continue to be taken to improve
DENISO
MINES
communicafions in order to minimize the chance of re-occurrence of this type of
miscommunicafion.
4. Part I.H.4.(c) for failure to provide at least a 10 calendar day prior notice of the
hydrostatic test that verifies that the steel liner and leak detection system perform in
accordance with the approved drawings, and to allow a DRC inspector to be present
during the test.
a) Root Cause of the Noncompliance
By a letter dated November 16, 2009, Denison provided DRC with 10 day advance notice of a
hydrostatic test to begin on December 1, 2009. DRC staff did not attend that test. Denison redid
the hydrostatic test between February 9-11, 2010, because of changes to the test reporting form,
and submitted the report of this second test to the Execufive Secretary with the March 12, 2010
letter referred to above.
Mill operations staff mistakenly assumed that, because DRC staff did not elect to attend the first
hydrostafic test, they would not elect to attend the second hydrostatic test, and that it was
therefore not necessary to provide a 10-day notice of the second hydrostafic test. This
assumption was in error and in violafion of Part I.H.4 of the Permit.
b) Steps That Have Been Taken to Correct the Violation
The Mill will conduct a third hydrostatic test and will provide DRC staff with a 10-day prior
nofice, as required by Part I.H.4(c) of the Permit.
c) Date When Compliance Was or Will be Regained
Compliance will be regained after completion of the third hydrostafic test.
d) Steps Taken to Prevent Re-occurrence of the Noncompliance
This is a one-off test, so a re-occurrence of this noncompliance will not occur.
5. Part I.H.4(d) for failure to refrain from use of the New Decontamination Pad until after
Executive Secretary approval of the as-built drawings.
a) Root Cause of the Noncompliance
Based on the nature of the requests for informafion set out in the February 4, 2010 letter from
DRC staff, and the fact that this was the second Request for Information and it appeared to
Denver operations staff that all substanfive issues had been addressed previously or would be
addressed by Denison's response to the February 4, 2010 letter, Denison operafions staff
mistakenly interpreted the February 4 letter as a conditional approval of the use of the new
decontamination pad after Denison had satisfied the outstanding matters in the letter. This was
clearly an inappropriate and wrong interpretation of the February 4, 2010 letter.
DENISO
MINES
As a result, after submittal of the March 12, 2010 response letter to the Execufive Secretary
Denison operations personnel mistakenly believed that the outstanding matters had been
addressed and that Executive Secretary approval had been obtained, and instructed Mill
personnel to commence use of the new decontamination pad.
b) Steps That Have Been Taken to Correct the Violation
Denison stopped use of the new decontamination pad on May 11, 2010, and will not re-
commence use of the pad until all conditions in Part I.H.4 of the Permit have been safisfied and
Executive Secretary approval has been obtained in writing.
c) Date When Compliance Was or Will be Regained
Compliance will be regained upon receipt of written approval from the Executive Secretary that
use ofthe new decontamination pad may re-commence.
d) Steps Taken to Prevent Re-occurrence of the Noncompliance
This is a one-off circumstance that is not expected to re-occur.
If you have any questions or require any further information, please contact
the undersigned.
Yours very truly.
DENISON Mmm (USA) CORP
David C. Frydenlund
Vice President, Regulatory Affairs and Counsel
cc: Ron F. Hochstein
Harold R. Roberts
Jo Arm S. Tischler
David E. Turk
DENISO
MINES