Virginia Uranium to Take Mining Ban Case to Supreme Court

Virginia Energy Resources (TSXV:VUI) will take its mining ban challenge all the way to the Supreme Court of the US this fall.

The uranium exploration company is challenging a 33-year-old ban on uranium mining in Virginia in hopes of exploring and producing at its Coles Hill project.

On Monday (May 21), the Supreme Court agreed to hear the case Virginia Energy has brought against the state of Virginia. The company believes a moratorium on uranium mining issued in 1982 should be nullified, in part because uranium now plays a key role in nuclear energy production.

The state levied the moratorium on uranium mining in the early 1980s amid fear about security and public health concerns. Since then, uranium has become an invaluable resource when it comes to nuclear power generation; however, it remains one of the key components for nuclear warheads as well.

Virginia Energy subsidiary Virginia Uranium initiated the suit and will serve as plaintiff, along with several other mining companies. This is not the first time Virginia Uranium has tried to get the ban lifted — the company had an earlier version of the lawsuit thrown out by a lower court; it is now hoping the revived suit will win over the Supreme Court.

“We have worked exhaustively for years to satisfy concerns about our plan from our neighbors, local elected officials, state legislators and other public officials,” Walter Coles, Virginia Uranium’s president and CEO, said in a 2015 press release. “We have made clear that we intend to construct and operate the safest and most modern uranium mining operation in the world.”

The company argues that state fears over radiation levels should be subject to federal oversight, not municipal or state, and says the statewide ban violates the US Atomic Energy Act. According to the 1954 act, the federal Nuclear Regulatory Commission has exclusive power to regulate radiation safety standards for milling uranium ore and disposing of waste by-products known as tailings.

Meanwhile, the state has argued that the Atomic Energy Act does not cover conventional uranium mining on privately owned land, making the Coles Hill project subject to state-level regulations.

The case, which is scheduled to be heard when the Supreme Court reconvenes in October, could set a precedent when it comes to mining management and jurisdiction.

“States could, for example, pass laws that impede physical access to nuclear facilities, diminish the availability of source materials or equipment necessary for nuclear development, or erect financial barriers to the development of nuclear energy,” US Solicitor General Noel Francisco told Reuters.

According to Virginia Uranium, Coles Hill is believed to be one of the largest untapped uranium resources in the world, with an estimated 119 million pounds of uranium waiting to be discovered.

“Our goal is, and always has been, to responsibly tap a natural resource on our own private land as a business enterprise that will reward investors as well as strengthen our regional and state economies and contribute to national security by providing a clean, domestic energy source,” Coles said.

The Trump administration has come forward to support the effort of the companies. Virginia Uranium believes the removal of the ban could have long-lasting economic ramifications on the area and state.

The uranium spot price was down US$0.05 on Tuesday (May 22), and closed at US$21.70 per pound.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.