THORIUM

Thorium, the Answer to the Question 'How Do You Hedge Uranium?'
By Jack Lifton
10 Nov 2007 at 10:00 AM GMT-05:00
As China and India increase their energy use exponentially, the U.S. is revisiting an old, often overlooked source of power: thorium. Get in the thorium play now because it's all headed up from here.

DETROIT (ResourceInvestor.com) -- I am going to report to you some news, which I think is very significant, about the verification of a large increase in the economical and accessible supply base of the principal ore of the metal thorium, which is located in the United States. To explain why this news is important and how it opens up an investment opportunity, I first need to give you some facts:
No matter what you think you have heard about “progress” in “developing” environmentally friendly forms of electric power generation, it is, nonetheless, a fact that the overwhelming majority of the world’s existing installed electrical power generating capacity comes from burning fossil fuels, i.e., coal, oil and natural gas, to produce steam, which is then used to drive turbine generators.
If the present economic growth trends hold, then within a very few years 50% of the world’s new demand for electricity each year will come from the demand, in total, of just two countries: China and India. At this point in time, China alone is putting one new coal-fired electrical generating plant into operation each week! By 2010 it is projected that China will be the world’s largest emitter of the greenhouse gas, carbon dioxide, no matter what condition the U.S. economy is in; it is further predicted that by 2015, India will surpass China in this category, and just those two Asian nations will then be producing as much as two-thirds of the manmade contribution of the greenhouse gas to the earth’s atmosphere. Most of this carbon dioxide will come from burning fossil fuels to generate electricity.
Probably the lion’s share of the remaining portion of global electricity production, i.e., that not produced by burning fossil fuels, is from hydroelectric generation. This is literally converting the energy of falling water into electricity. The developed world has probably already maximized its production of electric power through hydroelectric projects. This is not because every river that can be dammed to build up a reservoir of water, has been; it is because the distribution of fresh water to maximize its use for agriculture and human use is much more critical now that populations have spread out, and hydro engineering surveys have found no further large projects in the developed world will be economically or politically feasible.
China is currently bringing to a finish one of, if not the, largest hydroelectric power projects in history, the Yangtze Valley River Dam Complex. It is interesting to note that there are today many problems reported during the current construction phase of the Yangtze project, such as unintentional flooding of land under cultivation and the unexpected collapse of “soft” natural walls along the river valleys - which, if they occurred in a Democratic country with a free market economy, would shut the project down and in all likelihood would have prevented its undertaking in the first place.
In China, where the masters of the command economy have decreed, and in fairness, recognized, that China must have vast increases in its energy production economy to meet its long term growth plans the few (millions) must, apparently, make sacrifices for the good of the many (billions). This philosophy is what mostly separates Asia under soft Communism (China) and mixed Socialism/Capitalism (India) from, in particular, America under its current political parties’ philosophy of state-subsidized capitalism for the few and socialism for the many. This philosophy of the Asian world is in fact why the Kyoto Accord is simply dismissed as irrelevant by both China and India no matter what platitudes the governments of those countries utter for the Western press.
The final - and I think most significant but small compared to fossil fuel and hydroelectric - technology used, like fossil fuels, to boil water to make steam to turn turbines is the containment and extraction of the thermal energy (heat!) produced by controlled, slow, nuclear fission.
America has acted very much like the animal in the Aesop fable that eats all of the abundance of summer food right away and puts nothing away for the winter, at which time the starving pig will root under the squirrel’s tree begging for some of those acorns it rejected during the fat summer.
America developed the atomic bomb in an unbelievably short three years from the first controlled chain reaction in an atomic pile (i.e., “nuclear reactor”) under the stands of the University of Chicago’s football stadium on 2 December 1942, to the successful test of a deliverable fission weapon on 15 July 1945. After the war, unfortunately, the thrust of nuclear reactor development was focused on insuring a (massive) overproduction of weapons grade (i.e., fissile) plutonium and power plants for the largest and deadliest mobile weapons of war, submarines and aircraft carriers, to give them literally infinite range and time on station.
Interestingly enough, the U.S. government’s first go at a civilian nuclear reactor-based electric power generation station was designed to operate on thorium; it worked, but operating issues, such as what to do with the radioactive waste materials generated and a shortage of available materials for safe construction. They hadn’t yet been developed because it was, after all, only a decade since the first “reactor” was constructed and that “atomic pile” was a cobbled together structure of blocks of uranium and graphite “controlled” by cadmium rods inserted into the pile to slow down the neutrons so that they would not have enough energy to cause fission.
I was interviewed upon my matriculation at the University of Chicago in 1958 by the then chairman of the physics department who on that fateful day in 1942, as a graduate assistant to Enrico Fermi, had stood on top of the “pile” with a fire extinguisher to “put out” a runaway nuclear fire with cadmium sulfate solution! I asked him about it, and we had a good laugh thinking about how stupid and, worse, helpless, he and the others felt afterwards - it clearly wouldn’t have worked as was quickly determined even during the war.
But, getting back to thorium-fueled reactors: The one at Shippingport, Pa., built and operated in the 1950s under contract by Westinghouse, worked, but it was a prototype of a reactor of which the products could not be used for building nuclear fission weapons. This was reason enough not to continue with it in a world where the American military was concerned with having each nuclear reactor, even for civilian use, designed to produce fissionable material for weapons. There was only so much money available for studies of chemistry, metallurgy and design, and the nuclear engineers and researchers had their hands full just figuring out how to produce, refine and contain safely the metals and isotopes of uranium and plutonium, which were the strangest materials with the most unpredictable properties that the scientific world had ever seen.
For those so inclined I strongly recommend a fascinating book by Jeremy Bernstein entitled “Plutonium; A History of the World’s Most Dangerous Element.” If you want to know how close the U.S. came to abandoning the WWII “Manhattan Project, and how difficult it was and is to handle plutonium, this is the book for the lay reader like me.
It was immediately realized after the war that although the end use of most nuclear reactors was to be the production of weapons-grade fissile materials, there was a need to justify the enormous costs and dedication of resources of men and material of such programs for the political well-being of any nation undertaking such a program. Those of you, who, like me, are graybeards, will remember the “Atoms for Peace” program that gave birth among other things to the Shippingport Thorium Reactor.
In the last 50 years, every nation that has developed nuclear weapons on its own has (by necessity) built nuclear reactors - all of which were originally designed and built so that fissile weapons grade materials could be extracted from their operating systems.
But every nation building nuclear reactors has not been as politically cynical as most of the post World War II nuclear powers; some of those nations actually moved forward with civilian uses of nuclear energy as a primary goal of their nuclear programs alongside of military uses. France, for one, which was the first Western nation to realize that dependence on imported fossil fuels is national suicide today, produces nearly 80% of its electrical power from nuclear plants fueled by uranium.
Canada is the major non-nuclear armed power, which has a government-sponsored and subsidized program to develop peaceful uses of “atomic power.” Canada’s state owned Atomic Energy of Canada Ltd. (AECL) has designed and built nuclear electric power plants all over the world and continues to do so actively. But AECL has also been developing nuclear reactors fueled with thorium. This has lately been a key factor in generating interest in Washington, D.C., to amend the Atomic Energy Act of 1954, so that thorium reactors and their ordinary (non-weapons useable) waste products can be brought into use, commercially, in the U.S. AECL has even indicated that it can now retrofit existing uranium fueled reactors so that they can continue to operate but use thorium as a principal fuel.
There is a strong rumor that a major European nation currently exporting hydroelectric power and which currently exports its surplus of fossil fuel has ordered from AECL a thorium reactor. If true, this is far sighted to say the least, and I’ll shortly tell you why it’s even a better idea than it at first seems.
Remember that both India and China are nuclear armed powers, and that therefore both nations have made immense investments in nuclear reactor design and engineering.
India, which I spoke of above as gaining on China in the race to be the world’s largest producer of carbon dioxide from energy production, does not have much, if any, domestic sources of uranium, but India, at least until the end of this article, is listed as having the world’s largest reserves of thorium. India does not have much oil, nor does it have hydroelectric possibilities which are economically or politically feasible. India has, therefore, a choice: It can either surpass China in 2030 as the world’s largest importer of oil - the IEA estimates that India would need to import by 2030 the entire 2007 production of the U.S., Canada and Mexico - or it can go “nuclear” for civilian power production. If it does go nuclear, the best choice for India will be thorium. The agreements now pending between India and the U.S. for peaceful development and sharing of nuclear power technology could automatically include thorium technology if the Atomic Energy Act of 1954 is amended.
China has no known reserves of thorium, so it is going ahead, along with its fossil fuel and hydroelectric programs, with an additional vast nuclear program, larger than all of the rest of the world’s nuclear power programs put together. China has 20 new substantial-sized nuclear reactors fueled by uranium on “order.” China has also indicated that it may construct large numbers of smaller, local area-servicing, cheap reactors - the design of which is called “pebble bed” and is actually based on a commercialization of that first reactor under the football stadium in Chicago. These pebble bed reactors utilize uranium in the present design.
The Russians, it should be noted, have all the fossil fuels they will need for generations, all the uranium and nuclear reactor technology they will need, and even undeveloped hydroelectric resources! Nonetheless, Russia has designed and built test models of thorium reactors. This is because the Russians want to be able to use up the immensely expensive mammoth store of weapons-grade plutonium they made during the Soviet period. Thorium reactors can actually “burn” weapons-grade plutonium as part of their operations, and produce end products (i.e., waste) that can no longer be used for weapons. The Russians will also be able to start over as a nuclear engineering center by using a thorium reactor engineering to eliminate the bad taste the world has for those who designed and operated Chernobyl type reactors.
The technology to build and utilize thorium reactors to produce electrical energy for civilian use and to “burn up” weapons-grade plutonium has been actively promoted by the American company, Thorium Power Ltd. [OTC:THPW], which is now gaining traction in the Senate in Washington, D.C., for its core ideas. The proposal to amend the Atomic Energy Act of 1954, for example, grew out of lobbying by Thorium Power. TP is also actively working with the Russian government on reducing its weapons stockpiles in accordance with its agreements to do so in tandem with the U.S as described above.
In 2006, the USGS Commodity Report on thorium stated that no thorium was mined within the U.S., the total dollar value of thorium used in the U.S. was $1.1 million and that India has the world’s largest reserves of thorium.
The big thorium news is that USGS is about to receive professionally researched data that will allow, and require, it to update its estimate of global economically available reserves of thorium, and the update will dramatically rearrange the ordering, by the total reserves per country, in the above mentioned and currently available (dated May, 2007) USGS Mineral Commodity Summary for Thorium.
It will now be established that the United States, just in the Last Chance Mine in the Lemhi Pass area of Idaho, has more economically feasible reserves of thorium than any other nation on earth. The Last Chance Mine survey district mineralization is believed to be about 25% of the similar mineralization in the Lemhi Pass area.
The geological research study was carried out by a team led by an experienced and academically qualified associate research geologist of and for the Idaho Geological Survey. The work was focused on a region in Idaho known as the Lemhi Pass District. Beginning in the year 2000, Dr. Virginia Gillerman undertook a study on behalf of the Idaho Geological Survey, which was also a review of major studies done in the recent past (25 years ago, for example) when Idaho Power, a large regional utility undertook to examine Idaho’s Lemhi Pass Region for mineralization that might include uranium and thorium. Idaho Power was for the time very far-sighted; the company wanted to know if there were local deposits (and possibly therefore a potential local repository for waste) of uranium and thorium. Idaho Power focused its survey on a known mine, the Last Chance Mine, where these metals and others had been proven. Millions of dollars were spent before national and local politics moved the company’s focus to other projects.
Interestingly enough, as I have noted above, at the same time as the above new survey has been completed, the U.S. Congress has begun to take note of and take action upon the utilization of thorium, rather than uranium, in a revival of a U.S. national program to build new generations of nuclear reactors to provide electric power in place of fossil fuel-based electric generating plants. It cannot be overemphasized that the U.S. Senate has taken note, in particular, of the fact that thorium-based reactors can burn weapons-grade plutonium rendering it unusable for weapons use and that the waste products from thorium-fueled reactors do not lend themselves to the production of fission weapons.
Just as a review: Thorium’s fissionable isotopes were discovered at the same time as those of uranium, in 1939, but the properties of fissionable thorium did not lend themselves to the making of an atomic bomb. After the war and after the first use of both a uranium and a plutonium fission weapon, the very first civilian-use reactor at Shippingport, Pa., was designed to use thorium as a fuel, but unfortunately it was then deemed a military necessity to build only reactors that could either use or produce weapons-grade fissile products so that the country could be assured a broad production base for weapons.
Today, the wheel of time has turned once again, and it is critical that no more reactors producing or depending upon weapons-grade fissile materials be constructed anywhere in the world.
For Resource Investor readers, I now have a news flash. I have spoken to the current owners of the mineral rights to the Last Chance Mine and its surroundings in the Lemhi Pass region of Idaho; they have formed a company to develop this deposit. It is called Thorium Energy, Inc., and as of this writing it is still private. I am told that, as soon as the Gillerman report has been vetted by the USGS, Thorium Energy, Inc. will go forward with an IPO.
Ladies and gentlemen, please be aware that the economic powerhouses of China and India will suck up the world’s production of natural resources for domestic manufacturing use and domestic energy production just as they have done already with strategic metals and minerals. The U.S. can be self-sufficient and have lots left over to export of only one non-greenhouse gas-producing natural resource of energy: thorium. This is an opportunity to hedge uranium, and it is the first and, so far, only opportunity. Thorium Power is the technology play in the U.S., and Thorium Energy will be the mining play in North America. I’m going to try to get my hands on some of those shares as a hedge against uranium. What are you going to do?