On September 26th, Strathmore Minerals President David Miller presented at the Platts Nuclear Fuel Strategies conference, announcing a large percentage jump in U.S. uranium production over the next decade. Presently, domestic production hovers around 3 million pounds of uranium oxide. Miller forecasts U3O8 production could increase to 25 million pounds by 2016 and maintain this pace through the second decade.

We talked with Miller about his projections and how he arrived at those numbers. He told us the big surprise would be the return of conventional uranium mining – both underground and open pit deposits. While the in situ recovery (ISR) method might quadruple from the current level of production, conventional mining would overtake ISR over the next seven to nine years. Miller believes by 2015, conventional uranium mining production in the United States might come close to 15 million pounds per year.

He also talked about which U.S. states would become the top producers. Miller explained the strong interest in Wyoming and the states’ favorable climate toward uranium mining would keep Wyoming in the Number One spot through 2020. Miller foresees New Mexico becoming the country’s second largest uranium producer, closely followed by Utah. Neither state is currently mining uranium, but both have a long history of high uranium production. Despite a strong increase in production, Texas would fall to fourth place. Colorado and Nebraska would round out the key uranium producing states.

We believe his production estimates – if the current group of junior uranium developers and others meet the 2013 target – might come just in time. The Russian HEU-LEU deal, also known as ‘swords for plowshares,’ expires in 2013. U.S. utilities have been complacent in ensuring an abundant inventory is accumulated in advance of this expiration. If U.S. uranium production meets or surpasses Miller’s projections, this could become a welcome event for U.S. utilities and electricity consumers.

Q& A with David Miller President of Strathmore Minerals . StockInterview: Who do you think will become the U.S. uranium producers by 2010?

David Miller: Strathmore is moving forward with two projects, which we are permitting in New Mexico. In Wyoming we could be in production with one or two of our projects by 2010. Permits are the limiting factor. If we had our mining permits tomorrow, we could start construction the next day. By 2010, other uranium producers would include Cameco Corp’s Power Resources with two existing and possibly two additional projects, Mestena and Uranium Resources in Texas, Denison (IUC), Cotter in Colorado, and others who have announced they plan to be in production, such as Energy Metals, UR-Energy and Uranerz Energy. And a few others may also come into production around that time or later in the decade.

StockInterview: And what will the U.S. production climate be like by 2020?

David Miller: Naming the uranium-producing companies who will be around in 2020 may be difficult, but knowing which properties will likely be in production is easier. Strathmore’s Roca Honda should be in production by then with a proposed new mill in New Mexico. This mill might produce between three and six million pounds of U3O8 per year, fed by the Roca Honda and other uranium mines in New Mexico. The big operation in Wyoming will be the Sweetwater Mill, now owned by RTZ unit Kennecott. Sweetwater would be fed uranium from the Gas Hills and Green Mountain Projects in Wyoming. Blanding (Utah) should be the third largest milling operation in the U.S. The other two mills, Canon City (Colorado) and Ticaboo (Utah) should also be operating at somewhat lesser production rates.

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