In Malheur County, the poorest in Oregon, there is wealth buried in the ground. 

It's uranium—and the county has what may be the biggest sources in the U.S. 

For the first time in decades, someone wants to mine uranium in the state. Oregon Energy LLC, owned by an Australian company, hopes to extract at least 18 million pounds of uranium oxide from a 450-acre southeast Oregon site called the Aurora property.

Uranium oxide, better known as yellowcake, now trades near $52 per pound, six times its value a decade ago. Yellowcake is used to fuel nuclear reactors and can be processed into a form suitable for nuclear weapons.

Oregon Energy President Lachlan Reynolds tells WW the mine will provide uranium for domestic nuclear plants, noting the U.S. produces only 5 percent of the uranium it uses.

The site, he says, "is very suitable for mine development, with few competing land-use issues or environmental sensitivities, as well as a strongly supportive local community."

But the project, three miles from the Nevada border, worries some industry critics. Uranium mining—not practiced in Oregon since the 1960s—often left hidden poisons in the earth and groundwater. The Aurora project would be the first test of a 1991 Oregon law aimed at policing mining operations that use chemical extraction.

"I can't think of a clearer example of what's wrong with federal mining law," says Larry Tuttle, director of the Center for Environmental Equity. "No one was talking about nuclear weapons in 1872 when the law was passed."

The parent company, Energy Ventures Ltd. of Perth, Australia, has filed documents with the Australian Stock Exchange that say as much as 30 percent of the U.S. supply of uranium could come from the Aurora site. (Wyoming, Colorado and Utah are the biggest producers.) Potential buyers of the yellowcake include U.S. allies South Korea, South Africa and India, as well as rivals China and Russia. 

In 1977, a now-defunct Canadian company discovered uranium on the Aurora property. Records show the site's mineral rights changed hands many times before Oregon Energy purchased the claim for $2 million in cash last year.

Production is years away, even if the project gets all the necessary green lights. Oregon Energy obtained a state exploration permit in August 2010 but has yet to file a "notice of intent" with the Oregon Department of Geology and Mineral Industries to mine the site. 

State Geologist Vicki McConnell says the company had planned to file that notice this month but delayed the application pending further metallurgical study. "They have not determined precisely what chemical process they'd need to concentrate the uranium ore,” she says. 

A September presentation to state officials by Oregon Energy sketches how the mining will take place. 

Machines will scrape the earth from an open-pit mine a half-mile in length. The heavy clay soil, placed in vats, will be sprayed with a chemical mixture that probably contains sulfuric acid. The acid bonds with the uranium, which is extracted, dried and sold as yellowcake. The leftover dirt is discarded in a "tailings pile" near the site.

The 1991 Oregon law—pushed by Tuttle despite mining industry opposition—was intended to prevent environmental damage that such mining has created elsewhere.

Total production of uranium concentrate in the United States, 1996 - 3rd Quarter 2011 in pounds of triuranium octoxide.
Yellowcake Towns

Closer to home, the Oregon Department of Environmental Quality continues to monitor groundwater contaminated with arsenic, radium, radon and uranium at the White King and Lucky Lass uranium mines 17 miles from Lakeview in Southern Oregon. Those mines closed in the 1960s.

Oregon Energy's president says the mine will have no trouble meeting the state's environmental standards. "We already support and operate under the equivalent of Oregon's mining and environmental regulations in other jurisdictions," Reynolds says.

The nearest town to the Aurora site is 10 miles away: McDermitt, Nev., population 513. The town is next to the reservation of the Fort McDermitt Paiute and Shoshone Tribe.

Reynolds says the company has received support from local officials, and that he expects tribal members to "form the core of the project's local workforce."

Karen Crutcher, the tribal council vice chairwoman, confirms the company attended a council meeting last year and has been talking with tribal chairman Billy Bell.

In its presentation to state officials, the company says its mine will create 400 direct jobs in Malheur County, which the U.S. Census Bureau says has the highest poverty rate in Oregon. 

Tuttle, however, says many of those jobs won't go to locals. "People that develop mines and operate mines are specialists, and they're transient," he says.

The veteran activist doesn't have the power to stop the Aurora mine on his own. But given that he helped create Oregon's chemical process mining law, Tuttle is confident he can make a case to regulators that the project should not proceed.

“We’ll just make sure,” he says, “that all existing laws are rigorously applied.”