DRC-2009-003502 - 0901a06880130e1b

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State of Utah
GARY R. HERBERT
Govemor
Dec- sco^t-^^.S'^,^
Department of
Environmental Quality
Amanda Smith
Acting E.xecutive Director
DIVISION OF RADIATION CONTROL
Dane L. Finerfrock
Director
August 17, 2009
CERTIFIED MAIL
(Return Receipt Requested)
Mr. Steven D. Landau
Manager of Environmental Affairs
Denison Mines (USA) Corp. (DUSA)
1050 17* Street, Ste. 950
Denver, CO 80225
Dear Mr. Landau:
SUBJECT: July 27, 2009 DUSA Response to Request for Information; June 29, 2009 DRC
Email from Dave Rupp, DRC to Harold Roberts, DUSA: Addition to DRC
Comments; May 21, 2009 DRC Request for Information; March 3, 2009 DUSA
Letter: Radioactive Materials License #UT1900479 License Condition 9.5, Annual
Surety Update for the White Mesa Mill and Tailings Management System;
Comments and Request for Information
We received a letter dated July 27, 2009 on the subject, which revised the previous surety cost
estimate letter dated March 3, 2009. We have reviewed this information, and have the following
comments:
A. Costs for decommissioning and removal of all additional new tank facilities. DUSA's
response to Item l.a. of our letter of May 21, 2009 stated that, "Additional costs have been
included in the Mill Decommissioning section, "Misc. Tankage & Spare Parts Removal", of the
estimate, to cover the demolition and disposal of the newly constructed uranium and vanadium SX
feed tanks and the SX raffinate tank. The total manpower and equipment hours were increased by
50% to cover the additional work effort required."
Comment: After review of the July 27, 2009 DUSA submittal, it appears the 50% adjustments
were erroneously omitted, and the submitted costs showed a decrease.
B. Equipment maintenance costs for disposal of Cameco and Honeywell barrels. DUSA's
July 27, 2009 response to Item I.d. stated that, "Under the Mill Decommission section, equipment
maintenance costs have been included for disposal of the Cameco and Honeywell alternate feed
barrels."
168 North 1950 West • Salt Lake City, UT
Mailing Address: P O. Box 144850 • Salt Lake City. UT 84114-4850
Telephone [phone]-Fax [phone] • T.D.D. [phone]
www.deq.utnh.gov
Printed on 100% recycled paper
Page 2
Comment: The requested costs for equipment maintenance was placed in the table for the
Cameco and Honeywell Barrels, but was not added into the total for this item. Please revise the
cost estimate accordingly.
C. Demobilization of NRCL power equipment. DUSA's July 27, 2009 response to Item 3.a.
stated that, "Adding an additional demobilization cost would result in doubling of the
demobilization cost. All mobilization and demobilization costs, including assembly and
disassembly were included in the February 2009 estimate."
Comments:
1. In an email on this subject dated June 29, 2009 from Dave Rupp of DRC to Harold
Roberts of DUSA, this request was clarified. Mr. Rupp stated that,
" You had a separate question, asking for clarification on item 3a, in our May 21, 2009
letter. This question regards statements made on page 2 of NCRL's letter, in the
paragraphs headed with "Freight and Assembly Charges." In the paragraph above that
one, titled "Mobilization," NCRL distinctly separates mobilization and demobilization for
service support. Then begins discussing, "The freight and assembly charges Hsted on
Attachment A are based upon all machines shipped by truck to the job site." This seems
like mobilization. That paragraph is followed by a paragraph on demobilization, as if they
were separate charges from those listed in Attachment A.
I realize they list in Attachment A that they are the "To & From" costs. However, the
verbiage above makes it ambiguous. So, we are asking in our letter, paragraph 3a, to
"Please add appropriate related demobilization costs for the power equipment, and clarify
this issue, if necessary, by providing supporting documentation from NCRL."
" The [last] sentence would have been better stated by the phrase, "or clarify this issue ..."
2. Denison has not added more demobilization costs for the equipment over the original
submittal, therefore, as requested in our email above, we ask that DUSA clarify this issue
by providing supporting justification and documentation, from NCRL, that the "Total
Freight Charges To & From" costs shown on the Attachment A spread sheet covers both
mobilization and demobilization, and is complete and adequate.
D. Insurances. This indirect cost is a new item. Originally, the costs for standard contractor
insurance items appear to have been omitted from surety estimates. These insurances
would be required by the state for the contractor doing the work.
1. Equipment Insurance. On the June 25, 2009 WRS rental rate quote sheet, item 7, it
states that the "Customer must supply insurance binder covering value of equipment."
It appears this equipment vendor requested insurance, which has not provided, or
budgeted for. In the equipment information from NCRL, WRS, HE and Power
Motive, we have not identified that equipment insurance is provided. A value for this
insurance is an average of 0.5 to 1.5 percent of the value of the equipment , and is
known as a "contractor's equipment floater."
2. Employer's Liability. In the R.S. Means estimating guide referenced above, p. 10-11,
workers compensation (already provided) is combined with employer's liability, an
2008 R.S. Means, Facilities Construction Cost Data, p. 10.
Page 3
average cost for excavation work is 10.46% of the total related labor cost; for wrecking
work, an average cost is 36.28% of the related labor cost.
3. General Liability. For general liability ("all-risk type"), an average cost is 0.25 to
0.62% of the contract. ^ The cost of this insurance must be added to the estimate as an
indirect cost.
We request DUSA please add these insurances as indirect costs in the cost summary of the
surety estimate.
Please review the above comments and provide the requested information. Also, please provide
additional documentation as requested. In an email dated August 14, 2009, you agreed that
DUSA would fully respond to the above within 45-days of receipt of this letter. If you have any
questions or corrmients, please contact me at [phone].
Sincerely,
/UAV4-
David A. Rupp, P.
Geotechnical Services Section
DAR:dr
Cc: Harold R. Roberts, DUSA
F:\drupp\wp\ lUCX SuretyV2009-10\Cmt2 08-17-09.doc
File: IUC03.05 Surety
' Ibid.