DRC-2012-002642 - 0901a0688034551f

State of Utah
GARY R HERBERT
Governor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Exe^trve Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
December 31, 2012
Scott Clow
Environmental Program Director
Ute Mountain Ute Tnbe
PO Box448
Towaoc, Colorado 81334-0448
Subject Ute Mountain Ute Tnbe's October 4, 2012 Letter - Transfer Action and New
Groundwater Enforcement Action UGW 12-03, White Mesa Uranium Mill
Dear Mr Clow.
On October 9, 2012, the Utah Division of Radiation Control (DRC) received your letter dated
October 4, 2012. We appreciate providing us with specific concems that are of key interest to the
Ute Moimtain Ute Tribe In the letter you refer to our meeting of March 15, 2012 from which we
had established a commitment to inform and exchange information with respect to the White
Mesa Uranium Mill facility We note your stated disappointment with the DRC in not disclosing
two "on-going" issues at the time of oiir meeting We appreciate the opportunity to provide the
following information in response to both issues
Item A Transfer of License from Denison Mines (USA) Inc to Energy Fuels Resources (USA)
Inc
At the time of our meeting on March 15, 2012, the DRC was not aware that Demson Mines
Corporation (Denison) was considering selling its United States assets It wasn't until May 29,
2012 that the DRC received notification from Denison that Energy Fuels, Inc intended to acquire
all of Denison's United States holdings and requested an approval for an indirect transfer of
control pursuant to R313-19-34(2)
As stated in the U S Nuclear Regulatory Commission's Consolidated Guidance About Materials
Licenses, Guidance About Changes of Control and About Bankruptcy Involving Byproduct,
Source, or Special Nuclear Materials Licenses, NUREG- 1556, Vol 15 (2000), Section 5,
Definition of Control, "control over licensed activities can be construed as the authority to decide
when and how that license (licensed material and/or activities) will be used A change of
ownership may be an example of a change of control, depending on whether the authority over the
license has transferred from one person to another The transfer of stock or other assets is not
195 North 1950 West • Salt Lake City, UT
Mailing Address P O Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax (801) 533^097 'TDD [phone]
vf vf w deq Utah gov
Printed on 100% recycled paper
Scott Clow
December 31, 2012
Page 2
necessarily a change of control The central issue is whether the authority over the license has
changed " Additionally, this section states that "the lowest organizational level listed in Item 1 of
the license is considered to be the licensee " For this transaction, the lowest orgamzational level,
ii3ka«c^r^^nfe;*vitji the Item 1 of the license, is Demson Mines (USA) Corporation (DUSA)
DUSA was a wholly owned subslAary^ffifefllison Mines Holding Company As such, DUSA had
the authority to decide when and how that license (licensed material and/or activities) will be
used. In the request for an indirect transfer of control, the licensee indicated that the ultimate
parent company for DUSA would change but that the "direct ownership, operation and
management of the mill will not be impacted There will be no changes in the organization,
location, facilities, equipment or procedures (operating or emergency) that relate to the Mill
License or Ground Water Discharge Permit (GWDP) programs The location of the principle
facilities and the DUSA management personnel responsible for the Mill License [UT 1900479]
and GWDP [UGW370004] will not change " (DUSA letter dated May 25, 2012) In addition to
the above, the licensee stated that the financial surety would continue to be provided by DUSA,
and would be unaffected by the Transaction [transfer of control] A commitment was made that a
bond rider to the financial surety mechanism would be provided after the Transaction closed and
the name of DUSA was modified The bond rider would reflect the change of name
On June 27, 2012, DRC staff spoke with the licensee's representative and requested further
commitments regardmg the activities to be conducted under the Mill License, UT 1900479, and
the GWDP, UGW370004 Specifically, DRC staff requested a commitment that the new parent
company, other than a potential name change, would abide by all constraints, cotimiitments,
representations, license conditions, and requirements presently in place for the Mill License and
the GWDP Additionally, DRC staff asked for verification that Energy Fuels Resources, Inc was
aware of the present stams of contamination issues and requirements for decommissioning and the
financial assurance Energy Fuel Resources, Inc's letter, dated Jime 27, 2012, was written in
response to the DRC staffs request Energy Fuels stated that, "upon completion of the
Transaction described in the Notice [letter dated May 25, 2012], Energy Fuels will become the
ultimate parent company of DUSA Energy Fuels confirms and agrees that, as ultimate parent
company and owner of all of the outstanding shares of DUSA, it will not take any action, in its
capacity as shareholder, that would interfere with DUSA's ability to abide by all constraints,
license conditions, requirements, representations, and commitments identified in and attributed to
the Mill License and the above referenced Groundwater Discharge Permit " Additionally, in the
letter dated June 27, 2012, Energy Fuels stated that they were knowledgeable of the extent and
levels of contamination and applicable decommissioning requirements at the Mill
In a letter dated Jime 27, 2012, after receiving the requested information, the DRC approved the
indirect transfer of control for the Mill License, UT 1900479, and the GWDP, UGW370004 with
a stipulation that a name change should be submitted within 30 days if a name change was to be
made The licensee was also informed that a modification to the financial surety mechanism for
decommissioning would be necessary
On August 3, 2012, the hcensee requested a name change for the Mill License and the Utah
GWDP Other than the name change, modifications to accommodate changes made by Senate
Scott Clow
December 31, 2012
Page 3
Bill 21 of the 2012 General Session of the Legislature, and a modification from the mill address to
the corporate office address for the mailing address, the only other modification to the Mill
License UT 1900479 was an addition of a restriction for future construction of tailings disposal
embankments until the reclamation plan is approved by the Director of the Utah Division of
Radiation Control
In your letter dated October 4, 2012, you expressed a concern that the Ute Mountain Ute Tribe
(Tribe) had submitted comprehensive comments on the Utah Radioactive Materials license
Renewal (previously amendment 45) for UT 1900479 and that the concems were relevant to our
review and approval of the transfer between DUSA and Energy Fuels Since the transfer of
control did not result in the modification of the management, operations, location, financial surety
estimates, etc. the transfer of control was not processed as part of the renewal application and was
processed separately as a minor amendment The license renewal for UT 1900479 is still under
review and the Tribe's comments are being considered in the evaluation of the license renewal and
corrective action plans
Item B Stipulated Consent Agreement, Docket UGW12-03
You state in your October 4, 2012 letter that the Tribe first became aware of Docket No UGW12-
03, when it was posted on the DRC website on September 13, 2012. The Listserv that went out on
September 13, 2012 annoimced the posting of the 2"^^ Quarter, 2012 Energy Fuels groundwater
monitoring reports (Tailings, Chloroform, Nitrate) and the 1^* Semi-Armual Effluent Monitoring
Report (January through June, 2012) The DRC committed to the Tribe in a July 9, 2012 meeting
that It would begin posting Energy Fuels' monitoring reports on the DRC website, the September
13, 2012 Listserv was fulfilling this commitment.
Docket No UGW12-03 was posted on the DRC website the day it was signed, July 12, 2012 The
DRC does not provide a Listserv for each and every item it places on its website
In your October 4, 2012 letter, you recommend the "DRC consolidate the two existing corrective
action plans (UGW12-04 and UGW20-01) and the new SCA for the out-of-compliance parameters
and decreasing pH trend, formulate a corrective action plan that requires analysis of the Tailings
Cells as the source of the contamination, and open the corrective action plan for public
comment "
The Tailings Cells 1, 2 and 3, and Roberts Pond were studied to see if they were considered a
source of the nitrate and chloride plume m the Denison Mines (USA) Corp December 30, 2009
Nitrate Contaminant Investigation Report, as well as m the November 19, 2008 Preliminary
Source Review Report for Nitrate in Groundwater at the White Mesa Mill prepared by Jo Arm
Tischler and the November, 2008 Plan and Schedule for Nitrate Contamination Investigation
Report and Groundwater Corrective Action Plan prepared by Intera These reports are posted on
the DRC website at
Scott Clow
December 31, 2012
Page 4
http //www radiationcontrol utah gov/Uranium_Mills/IUC/nitrate/docs/2010/12302009nirateRepo
rt pdf and
http //www radiafioncontrol utah gov/Uranium Mills/IUC/nitrate/docs/2012/Oct/PlanSchedulefor
NitrateContaminationReport pdf
The related investigations and subsequent DRC review found that Tailings Cells 1,2, and 3, and
Roberts Pond were not a source of the contaminants of interest The investigation found that
• The highest concentrations of nitrate and chloride in the plume are in the area of
monitoring wells TWN-2 and TWN-3 which are located more than 1,000 feet upgradient
of the tailings cells
• No wells downgradient of the tailings cells have chloroform concentrations greater than
the Utah Ground Water Quality Standard (70 ug/L)
• Calculations based on conservative concentrations of mtrate in the tailings solution and
nitrate concentrations in the plume (based on conservative 2 dimensional area, ft^), and
expected mixing with uncontaminated ground water would require 13,329,360 gallons of
tailings solution to have discharged to the ground water table This would have created a
ground water mound of 5 feet on average across 40 acres of the site, and no such
mounding has been observed
• Results of the May 8, 2008 University of Utah Study indicate that the Tailings Solution
has not discharged to groundwater
• If the tailings cells (and Roberts Pond) were contributmg to the plmne as a continuing
source then plume concentrations would rise in those areas regardless of initiation of
ground water withdrawal and isolation
As for the DRC consolidating the "two existing collective action plans (UGW 12-04 and UGW20-
01) and the new SCA for the out-of-compliance parameters and decreasing pH trend," the DRC
believes that because each of the three projects are at different stages the current approach does
not dimimsh or compromise the overall objective of addressing all of the ground water
contaminants The Nitrate Corrective Action Plan (CAP) (Docket No UGW 12-04) has gone
through a public comment period and has now been approved Docket No UGW20-01 for
Chloroform is a Corrective Action Order, not a CAP The CAP for Chloroform will be released
for public comment in January 2013
The Stipulated Consent Agreement (SCA) for the decreasing pH trend (Docket No UGW12-03)
IS an approval for Energy Fuels to conduct an investigation for the cause of the decreasing pH
trend
Thank you for your letter and letting us know of your concems We appreciate the mformation
and the opportunity to investigate and provide a response to your concems Following your
review of our response, I recommend that we schedule a meeting in January 2013 to further
discuss these matters as well as moving forward on an improved communications strategy with
each other
Scott Clow
December 31, 2012
Page 5
If you have any additional questions or concems, please contact us at [phone]
Sincerely,
Rusty Lundberg
Director