On behalf of Colorado Citizens Against ToxicWaste, Inc.

Grand Canyon Trust Grand Valley Peace and Justice Information Network for Responsible Mining Living Rivers MASE, the Multicultural Alliance for a Safe Environment Sierra Club Environmental Justice Uranium Watch Western Colorado Congress

Mr. Richard A. Dana Presiding Officer Judicial Arbiter Group, Inc. 1601 Blake Street, Suite 400 Denver, CO 80202 Via email to: rdana@jaginc.com November 12, 2012

Dear Mr. Dana, If the Pion Ridge Uranium Mill is built, it would sit between the Dolores and San Miguel rivers in the heart of Paradox Valley in western Montrose County, Colorado. Paradox Valley is an important, pastoral gateway between the Colorado Plateau and the desert canyonlands of the Colorado River watershed and is cherished by people throughout the region. The mill will bring with it an industrial presence, air pollution, traffic, noise and the stigma of radioactivity as it operates over the course of several generations, along with the permanent disposal of 7.3 million tons of radioactive tailings waste, marring a spectacular and beautiful location. A uranium mill in Paradox Valley would alter the landscape and diminish its importance forever. Our organizations represent thousands of members throughout the Four Corners region who are opposed to the Pion Ridge Mill. We thank you for the opportunity to comment on the license application and for your consideration of our concerns. We urge you to recommend against licensing a uranium mill in Paradox Valley, which would be the first new mill to be constructed in the United States in over a quarter-century even though there is no purpose or need for it. The Pion Ridge Mill proposal is inappropriate on its face and runs counter to the values of progress, responsible development and environmental stewardship that are shared by our organizations. But the fundamental unsuitability of the concept is not reason enough to oppose the construction of a mill and is not the question at hand. We find reason instead in the deficiencies of the analysis conducted by the Colorado Department of Public Health and Environment (CDPHE) and the flaws of the application submitted by Energy Fuels Resources (EFR). The mills impacts to water quality and the rivers have not been adequately analyzed, for example, nor have the long-term environmental impacts of processing radioactive materials in

such a sensitive location, nor has the suitability of the geology, nor the negative socioeconomic impacts, nor many other important factors that should have been considered by CDPHE. Since the application was first submitted to the state, three years have passed; the application is still flawed, the alternatives still not fully considered, and the proposal is still not suitable. A Vibrant Economy Is At Risk The communities and the economies of Southwestern Colorado rely on the regions clean air and water, healthy rivers and ecosystems, and scenic beauty for sustenance. For the past three decades, economic growth in the region has been driven by recreation, tourism, agriculture, conservation-based land management, service and professional industries, and the outside investment of residents attracted to the area and the quality of life it offers. A strong, collaborative effort has been made to restore and enhance the ecological health of the Dolores and San Miguel watersheds to the benefit of the entire region, shoring up the areas economic attractiveness. At the same time, the traditional extractive industry of uranium mining and milling has been nearly dormant and has consistently lacked vitality and growth. The regions former uranium towns have suffered long declines in population and real incomes as industrys brief, booming heyday, created by the governments procurement program, left them unprepared for the longterm bust. Yet the volatility of the uranium market and the associated stigma that will negatively impact the regions healthier economic engines has not been seriously considered in the states Environmental Impact Analysis (EIA). At the same time the EIA fails to consider the volatile nature of the uranium market and its oversized impacts on local communities, the state celebrates the hollow potential for creating a handful of jobs in western Montrose County. While acknowledging elsewhere in the EIA that full employment has never been achieved at the Cotter Corporations Caon City Mill (Page EIA-160), the state relies on the estimate from Energy Fuels that it will create 85 new jobs at the Pion Ridge Mill based on the assumption that it would run continuously, seven days a week, over the course of its 40-year operating lifetime. The buoyant (and suspect) projections of two industry-friendly studies the 1,392 associated jobs projected by the Montrose Economic Development Corporation study and the 649 jobs projected by the Montrose County Socioeconomic Impact Study overshadow the more subdued employment projections of the Colorado Office of Economic Development and International Trade and the independent Power Consulting report. (Please see discussion on pages EIA 135-137.) Unfortunately, the EIA fails to analyze the more realistic outcome that the mill is likely to be placed on standby for long periods when the price of uranium falls or that it wont generate secondary employment as generously as the regulators desire. The Socioeconomic Impacts Are Not Seriously Addressed Obviously, the historic record of sustainable job development is not deeply considered in the states EIA; otherwise, how can the legacy of uranium development in our region escape

comprehension? The consequences of failing to understand and mitigate the volatile employment cycle of the industry is briefly acknowledged: In the same vein, however, if the employment decreases or becomes volatile, the impacts on the community would be negative. Businesses that anticipated continued prosperity could be endangered and individuals that gave up jobs elsewhere may be unable to return to them. This circumstance could undo progress made during better times. (Page EIA-141.) We cannot argue with this conclusion from the state, although we find it quite interesting that the subject would be raised and not investigated. The broken promises of the uranium industry have become familiar across the Southwest. Yet there is no further analysis of the likelihood of this cycle repeating itself anywhere else in the application or the EIA. There is no discussion of how to hold EFR to its promises or to prevent the promised bounty from vanishing. The verdict is not in the documents, but it is clear in historys record; the uranium industry has been far more bust than boom, far more clean-up than start-up. The Mill Application Is Speculative and the Market Is Infertile In the EIA, the state did not bother to grapple with the speculative nature of the Pion Ridge Mill proposal. Market demand for the mill was not considered. EFR has stated publicly that it cannot build the mill until the sustained price of uranium yellowcake rises above $80 per pound, a price that with the exception of one spectacular and uncanny bubble during 2007 has not been attained since the U.S. government in 1970 stopped purchasing uranium and directly supporting the market. (Please see attached Associated Press article.) The uranium market is experiencing a permanent stagnation caused by the longterm shift from nuclear power development following the incident at Three Mile Island and exacerbated by last years events at Fukushima; this stagnation is not likely to ease into the foreseeable future. The price of yellowcake is now only a few dollars higher than the $40 per pound it sold for in 1980, just before the nations last uranium mill was opened in Blanding, Utah. Nevertheless, the EIA does not consider or analyze the time frame for constructing the Pion Ridge Mill. If the price of yellowcake does not rise quickly and few intelligent observers predict that it will then it is not far-fetched to think that the Pion Ridge Mill could be fully licensed by the state and yet remain unbuilt for many years, even decades. Prices would have to double, in fact, before the idea of it becomes viable, much less the actual financing. There is no purpose or need to construct and operate a uranium mill now; there is no market to support it and even the applicant says so. Until the market turns ripe, there is no need to approve the mill. Any analysis or license approved now will be frozen in time, without any serious updating in the future, despite the ongoing development and progress from other industries that will continue to affect the region. Time will move forward, communities will change, technology will advance, yet the Pion Ridge Mill proposal will become a relic of the past. Inside, the EIA still refers to a construction start date in the first quarter of 2011 and an operations start-up in 2013 (Page EIA-135). The EIA is outdated before the license is even issued.
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The application is not successful in demonstrating purpose and need, and development of the Pion Ridge Mill no longer features as a centerpiece in EFRs publicly stated business plans due to its acquisition of the underperforming White Mesa Mill in Blanding in June 2012. With four times the processing capacity of the Pion Ridge Mill, the mill in Blanding has plenty of room to grow, should the uranium market pick up and the mines reopen. EFRs acquisition makes the Pion Ridge Mill doubly irrelevant by means of corporate redundancy. To peer further into the state of the uranium market is to again find purpose and need obscured, as domestic demand is more than adequately supplied by current production, international agreement to convert nuclear weapons into nuclear fuel and the controlled releases of enriched uranium from the national Department of Energy stockpile. National policy has also recently recognized the difficulty of expanding the nations nuclear infrastructure in the absence of a national solution for the final disposition of waste at the end of the uranium fuel cycle. Energy Fuels Has Undergone a Dramatic Business Transformation Perhaps more important than any single factor, the states failure to account for the transformation of Energy Fuels Resources from junior speculator to penny-stock operator since the application was submitted makes the Pion Ridge EIA deeply deficient. Since CDPHE issued the EIA and the draft radioactive materials license in January 2011, EFR has gone from an entrylevel exploration company to the nations largest conventional producer of uranium ore with assets in four states and the controller of a processing monopoly. This was followed in relatively short order by a near-complete shutdown of all uranium mining in the region and a stated change in corporate focus from uranium processing to alternate waste reprocessing. (Please see attached EFR acquisition statement and press release.) Considering the radical change in corporate outlook and financial status of the applicant, shouldnt the state have updated the EIA? There has been plenty of time to do so. Such a major shift in operations by EFR subsequently changes many aspects of the proposed mill operation, including water consumption, traffic and hauling patterns, employment, operations at feeder mines, air emissions and radionuclide releases, the stockpiling of ore and land use. Such a major shift, in fact, changes everything. Since June, in addition to acquiring the White Mesa Mill, EFR has acquired 13 additional permitted uranium mines in Colorado, Utah and Arizona from Denison Mines (USA), and two additional development properties in Utah. Formerly, the mines were EFRs competition and were not considered suppliers to Pion Ridge. If the market returns to levels where uranium production is economically feasible in the Uravan district, then EFR will be directing ore from a different set of feeder mines than were analyzed in the EIA. This could particularly impact traffic patterns on remote and dangerous sections of Highways 90, 141 and 145 as ore is drawn from the southern part of the district. Because conventional uranium milling is not economically viable elsewhere in the nation, mining proposals in northern New Mexico may also target the future Pion Ridge Mill for toll processing, creating long haul routes through remote areas of the Four Corners region. None of these possibilities were considered in the EIA.

Environmental Impacts of Start-and-Stop Production Were Not Analyzed Should these shortcomings be overlooked and the license issued, the environmental problems will begin to mount once the speculative ambitions of industry are realized, the rush to mine takes hold, the mill is constructed and opened with great fanfare, runs for a bit, and then, finally and predictably, goes on standby. While on standby, ore piles up. This is of great concern to downwind communities, because the Pion Ridge ore pad, at six acres in size, cannot indefinitely stockpile ore while a sluggish market fails to keep pace. The EIA failed to account for the maximum amount of potential ore storage or for the environmental consequences that follow, such as the release of airborne radionuclides from uncovered piles and exposure to water and the elements from prolonged stockpiling. This is already the customary practice at the White Mesa Mill, where ore is stockpiled in favor of reprocessing alternate waste materials. In standby, limited regulatory oversight and longterm negligence begin to take hold like weeds in cracked pavement. When the market is in the dumps, the peril to the environment grows exponentially once maintenance slowly begins to be deferred, secondary containment systems gradually become neglected, and watchful eyes simply stop coming to work. There is plenty of evidence of this in close proximity to the proposed Pion Ridge Mill site. As documented in the application, soil contamination on the mill site itself is likely the result of run-off from dormant uranium mines on the slopes above (Decision Analysis Page DA-78). On the mesa tops of western Montrose County, plenty of uranium mines can be visited from roadsides whose buildings have been vandalized, their copper wiring stripped, machinery stolen, pond liners cracked and fading, stormwater controls eroding in the high winds that rush across the Colorado Plateau. Our Regions Clean Air and Water Are At Risk The wind is yet another issue. The final air emissions analysis remains incomplete and CDPHE has still not issued the secondary permit that will allow the mill to release toxic and radioactive particles into the regions airshed. The EIA and the Regional Dust Report gave short shrift to the mounting body of scholarship on the increasing deposition of airborne dust and particulates on the San Juan Mountains and how this impacts the water quality of the upper San Miguel River watershed (Decision Analysis Pages DA 61-62). The EIA also did not consider the effects of global climate change, and how the trends of dust deposition are likely to impact the regions water and soil supplies and alter the timeliness of natural flows. The U.S. Nuclear Regulatory Commission required the installation of an air quality monitor at the location of the nearest residence three miles to the southeast of the proposed mill site (Pages EIA 22-23). Establishing baseline data is imperative to understanding future radiological emissions from the mill. But CDPHE erred in locating the nearest resident and overlooked the home that is actually closest to the mill site, approximately two miles directly south. Without the monitor installed in the proper location, how can the baseline data be accurate? In modeling the final pollutant emissions for the mill, CDPHE did not adjust its calculations and create a new model when the capacity of the mill was reduced from 1,000 tons per day; instead, they just cut the estimate in half. (See Table 25, Page EIA-121.) So in terms of particulate matter emissions, for example, possibly nearby

residents can expect that about half the amount of the projected 178 tons of particulate matter will be released on an annual basis, yet they cannot rely on CDPHE to be precise about it. Water is yet another issue. The capacity of the Dolores and San Miguel rivers are limited in reality, and climate change will exacerbate the issues of supply and demand in the future. Paradox Valley is parched, and uranium milling is thirsty. The Southwest is experiencing a greater level of climate change effects than other parts of the continent; in the future we can expect many of the drainages in the upper Colorado River Basin to see their lowest flows reduced even further during the most critical periods of the year for wildlife dependence. And water consumption for the Pion Ridge Mill is perhaps the greatest and most critical of the unanswered questions at hand. To date, EFR has not perfected its water rights or demonstrated that it will be able to obtain enough water to adequately control for dust at the mill site or to adequately cover the radioactive tailings. The ability of the local aquifer to supply the mills operations is still not demonstrated, either in EFRs application or by practice, and it is doubtful that the mill can be adequately supplied over the course of its lifetime. (Please see discussion at Pages EIA 92-93 and comments submitted into the record from Stratus Consulting.) Long-Term Protective Measures Have Not Been Proven by Practice The record of tailings management at uranium sites is so poor, time has proven that leaks and groundwater contamination are an inevitable result of their presence. EFRs application relies on the contention that because two thin plastic liners will be placed under the tailings and leaks will be monitored that contamination can be prevented over time. Yet this has not been demonstrated elsewhere in practice. To date, CDPHE has been unable to effectively oversee any uranium mill in Colorado and has only a record of complete failure in preventing groundwater contamination and the release of radionuclides. Already, the legacy mills in Colorado have cost over $1.1 billion in taxpayer-funded reclamation projects to date, yet longterm contamination and management concerns remain. The longterm effectiveness of these liners and the final cover for the tailings has not been tested. The Paradox Valley makes a poor place for this type of experiment, since it lacks a natural geological barrier to prevent the movement of contaminants from the mill site to the Dolores River. (Please see comments submitted into the record by geologist Denis OLeary.) Even if we were to have hopes that the proposed disposal of the tailings can remain free of flaws and leaks over the course of the 800,000 years they remain highly radioactive, EFRs application does not provide final detailed designs and engineering. The state did not conduct an independent analysis of the final designs to make sure they will deploy the best possible technology to protect human health and the environment; how can they when no such designs exist? Final engineering and designs for the mill and processing components are also not submitted to CDPHE as part of this application and there has been no independent analysis to determine whether the plans will hold water. EFR claims that the Pion Ridge Mill will be a zero release facility, but how can CDPHE be so sure? Without these critical components, the application cannot really be considered complete and any conditions that CDPHE places on a license that the final designs will be analyzed and approved at some undetermined point in the future cannot be
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expected to satisfy the stated demands of the public for strong oversight and transparency in the state review. The application's lack of detailed planning and risk scenarios, or even an estimate of the likelihood of a serious accident or failure of a tailings impoundment is even more troubling in the absence of final construction plans for the mill. It is the responsibility and obligation of Energy Fuels to provide the most scientifically sound proposal possible, but so far, they haven't. This lack of finality and certainty increase our worries for the health of Paradox Valley, particularly with the shift in EFR's business plans. Since the acquisition of the White Mesa Mill, EFR has formally entered the waste processing business, which has proven time and time again to be the only real path toward profitability for uranium mills. During the Montrose County zoning permit process in 2009, the citizens of the region very loudly and clearly demanded that the county government place a prohibitive condition on the zoning permit to forever ban the processing of alternate waste materials in Paradox Valley. This is a relatively weak prohibition because it is tied to a county ordinance and should be strengthened by the state in the licensing process, but CDPHE has not done so. In fact, CDPHE has left the door wide open in the future to not only apply for a license amendment to allow waste processing but also to expand the overall capacity of the mill itself. This open door leaves our Western Slope communities vulnerable to the oversized impacts of becoming a de facto waste dump, as the alternate feeds often contain extremely radioactive components as well as a different composition of toxic and hazardous substances that must be disposed of on site. CDPHE is apparently content to leave the question of waste processing unexamined until such moment as EFR decides to file the paperwork. Cumulative Impacts Have Not Been Adequately Considered The EIA is not only negligent in its acceptance of the economic realities of uranium production in the Uravan district, the analysis of impacts to wildlife is incomplete and fails to adequately consider the broader implications to the ecosystem of developing a radioactive processing facility in the midst of grazing lands. This is but one concern with the overall analysis of cumulative impacts from the mill. In another critical area of consideration, the EIA discusses how the seismic activity of Paradox Valley is affected by the deep injection activities of the Bureau of Reclamation and notes that a previous earthquake measured 3.0 on the Richter scale. In fact, the earthquake was measured at 4.2 magnitude, making CDPHE's direction to EFR to design the mill to withstand a quake of 4.8 magnitude simply seem like wishful thinking. The Cultural Resources Study also fails to consider the context of the surroundings of the Pion Ridge Mill site and how it relates to the expansive and rich archeological resources of the Paradox Valley and its adjacent mesas and canyons. The cumulative air quality impacts of the Pion Ridge Mill have not been considered either. Even were the flawed air quality modeling to survive the test of this review, it does not consider how the open pit mine adjacent to the mill site will impact cumulative radon emissions in the region, since it is currently exempt from radon emissions standards under outdated federal regulations. To the south of the mill site on the Mesa above, six Department of Energy uranium lease tracts converge into a single area; each of these lease tracts has permitted uranium mines that also emit radon yet are largely exempt from emissions standards. No scenario to better understand how related and mill-dependent mining
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activities on adjacent sites was conducted to understand better how these combined activities will tinker with the baseline air quality analysis. We oppose the licensing of the Pion Ridge Mill for all these reasons and believe the application and the EIA do not meet the basic requirements of Colorado's regulations. We cannot identify public benefits to this mill that would outweigh the tremendous problems with it, nor with the tremendous fiscal burden that is likely to accrue to the public over the long term. If the mill is built, it will enable the development of old mines and new mines and the exploitation of new claims throughout the Southwestern United States. To industry, the Pion Ridge proposal represents a new era of expansion; a bright, new day; a reawakening of a mineral district that has been asleep for three decades. The realities of the market mean little to these dreamers and the costs that our communities bear are of little consequence to them. We cannot justify the sacrifice that this mill will require, and we hope that you will agree. Thank you again for the opportunity to comment and for your consideration.

Sincerely, Jennifer Thurston, Executive Director Information Network for Responsible Mining (INFORM) P.O. Box 746, Telluride, CO 81435 Rein Van West, President Western Colorado Congress P.O. Box 1931, Grand Junction, CO 81502 Sarah M. Fields, Program Director Uranium Watch P.O. Box 344, Moab, Utah 84532 John Weisheit, Colorado Riverkeeper Director of Conservation, Living Rivers P.O. Box 466, Moab, Utah 84532 Nadine Padilla, MASE Coordinator Multicultural Alliance for a Safe Environment 105 Stanford SE, P.O. Box 4524, Albuquerque, N.M. 87196 Robert Tohe, Senior Field Representative Sierra Club Environmental Justice P.O. Box 38, Flagstaff, AZ 86001

Sharyn Cunningham and Carol Dunn, Co-Chairs Colorado Citizens Against ToxicWaste, Inc. P.O. Box 964, Caon City, CO 81212 Laura Kamala, Utah Program Director Grand Canyon Trust HC 64 Box 1705, Castle Valley, Utah 84532 Julie Mamo, Executive Director Grand Valley Peace and Justice 740 Gunnison, Ste. 218, Grand Junction, CO 81501