In-situ leach uranium mining

In-situ leach uranium mining in Australia - Beverley, Beverley-Four Mile, Honeymoon etc.

Controversies involving Heathgate and General Atomics and its CEO Neal Blue

In-Situ Leach (ISL) Uranium Mining Method Far From 'Benign'

Beverley Four Mile - Friends of the Earth (Australia) submission. 2009 (Word file)

Beverley Four Mile - Friends of the Earth (Adelaide) submission - information regarding ISL mining (PDF)

2002-03 Senate Inquiry - chapter regarding Beverley and Honeymoon ISL mining

A refresher on who’s behind one of our uranium mines

Jim Green, The Punch, 2 August 2012

The story behind the corporation that owns the Beverley uranium mine in north-east South Australia is scarcely believable.

Heathgate Resources − a 100 per cent-owned subsidiary of General Atomics (GA) − owns and operates Beverley and has a stake in the adjacent Beverley Four Mile mine. Over the years GA CEO Neal Blue has had commercial interests in oil, Predator drones, uranium mining and nuclear reactors, cocoa, bananas and real estate.

Radioactive spills and gas leaks at a uranium processing plant in Oklahoma led to the plants closure in 1993. The plant was owned by a GA subsidiary, Sequoyah Fuels Corporation, and processed uranium for use in reactors and for use in depleted uranium munitions. A nine-legged frog may have GA to thank for its dexterity. A government inquiry found that GA had known for years that radioactive material was leaking and that the radioactivity of water around the plant was 35,000 times higher than US laws permitted.

In 1992, a leak at the Oklahoma plant forced the evacuation of a building only two weeks after federal inspectors allowed it to resume operating. Later that year, the company announced that the plant would be closed after it had been ordered to temporarily shut down three times in the previous six years.

The shenanigans at the Oklahoma plant − documented by the World Information Service on Energy − include the disposal of low-level radioactive waste by spraying it on company-owned grazing land, and the company’s attempt to reduce the amount of property tax it paid on the grounds that radioactive contamination reduced the value of the land.

Fortune Magazine recounts one of the controversies surrounding GA / Heathgate’s uranium ventures in Australia. When uranium prices increased in the mid-noughties, the company was locked into long-term contracts to sell yellowcake from Beverley at earlier, lower prices.

Heathgate devised plans to renegotiate its legally-binding contracts. Customers were told that production costs at Beverley were higher than expected, that production was lower than expected, and that a failure to renegotiate contracts would force Heathgate to file for bankruptcy.

However former employees said that Blue had allegedly directed Heathgate to increase its production costs. Customers were not told that bankruptcy was unlikely since GA had agreed to continue providing Heathgate with financial assistance. Two of Heathgate’s Australian directors consulted an attorney who advised them that the plan could be considered a conspiracy to defraud. They left the company.

Exelon, one of Heathgate’s uranium customers, sued. The lawsuit was settled for about $41 million. Because of the increased uranium price, Blue ended up well in front despite the cost of the settlement with Exelon − more than $200 million in front by some estimates. Blue was unrepentant: “It made more sense to, in essence, just pay the fine.”

GA / Heathgate has employed at least one private investigator to infiltrate environment groups in Australia. The infiltrator, known as Mehmet, had previously infiltrated green groups as part of an undercover police operation before he moved into the private sector to set up his own security company, Universal Axiom. He also provided personal protection to visiting GA executives. When asked about the company’s tactics, a Heathgate spokesperson said the company was privately owned and had a policy of not responding to media questions.

People who worked at Friends of the Earth at the time − around the turn of the century − say they were highly suspicious about Mehmet from the get-go. His activities might have been laughable and pathetic except that he provided exaggerated information to police about the likely attendance at a protest at the Beverley uranium mine in May 2000. That led to an excessive police presence at the protest and police brutality against environmentalists and local Aboriginal people. An online video clip details this brutality. Heathgate applauded the police action (in a 2000 media release which is no longer available online). After a 10-year legal case, 10 people were awarded a total of $700,000 damages.

Heathgate’s record at Beverley has been substandard. At least 59 spills have been documented at the mine. The company sells uranium to nuclear weapons states (all of which are in breach of their disarmament obligations under the Nuclear Non-Proliferation Treaty), to at least one country with a recent history of secret nuclear weapons research (South Korea), and to countries which refuse to ratify the Comprehensive Test Ban Treaty.

Heathgate’s activities at Beverley have been extremely divisive among Adnyamathanha Traditional Owners. Some Adnyamathanha Elders have formed an Elders Group as a separate forum from the Adnyamathanha Traditional Lands Association. Enice Marsh said: “There have been many attempts over the past 10 years to try and bring greater accountability to what’s happening in Native Title, and to stop the ongoing assault on our Yarta (country). Many of us have tried with very little resources, limited understanding of the legal system and environmental laws, and despite a mountain of bullying, lies and deceit from mining companies, lawyers, and self-inflated thugs in our own community who dare to call themselves ‘leaders’.”

Is it any wonder that many intelligent, reasonable Australians still hate the uranium mining industry and hate it with a passion?

Jim Green is the national nuclear campaigner with Friends of the Earth.

The predator

By Barney Gimbel, Fortune Magazine, October 31, 2008

Neal Blue, CEO of defense contractor General Atomics, has transformed the way the U.S. military fights wars. But it is his take-no-prisoners approach to business that has made him infamous.

It's hard to pin down exactly when Neal Blue decided to start building weapons. It was probably in the early 1980s, around the time he bought much of Telluride, Colo., but before he began mining uranium and sometime after he gave up growing cocoa and bananas in the Nicaraguan jungle.

Back then Blue was a Denver oilman and real estate investor who happened to spend a lot of time thinking about how to defeat communists. He was particularly interested in seeing the overthrow of the Soviet-backed Sandinistas, who had recently seized control of Nicaragua. He had known the Somozas, the ousted ruling family, from his cocoa and banana days, and, well, he hated Reds.

Crippling the regime, Blue figured, was simple: just send GPS-equipped unmanned planes on kamikaze missions to blow up the country's gasoline storage tanks. "You could launch them from behind the line of sight," he recalls matter-of-factly, "so you would have total deniability."

Blue pauses, leans back in his white-leather swivel chair, and quickly adds that he had nothing to do with any of the Reagan-era operations there - nor, of course, did he launch his own attack. We are sitting in his small, sunny office near San Diego, not far from the Navy's so-called Top Gun Academy.

Behind him unfolds a rambling campus of 1950s-futuristic buildings, home to General Atomics Technologies Corp., parent of one of the most important defense companies in the world and the centerpiece of Blue's privately held - and secretive - business empire. Over the course of his five-decade career he's built a sprawling global business that spans four continents and enriched his family. But he has also made enemies and infuriated customers.

Blue is one of the last of the old-school industrialists, a breed that is all but extinct in professionally managed, post-Sarbanes-Oxley corporate America - a modern-day Howard Hughes (minus that whole starlet-dating, obsessive-handwashing part).

Through a combination of entrepreneurial instincts, bold legal maneuvers, and all-out bullying, Blue and his younger brother, Linden, have assembled assets worth billions of dollars (it's all private, so no outsider knows exactly how much), including an environmental cleanup firm in Germany, extensive uranium mines in Australia, real estate in Colorado, substantial oil and gas interests in Canada, and an airplane de-icing company in Iowa.

But General Atomics is best known for manufacturing one of the most important tools in modern warfare: the Predator, an unmanned spy plane that commanders in Iraq and Afghanistan credit with helping them fight insurgents. (The Pentagon recently announced that the Predator would increasingly take over the hunt for Osama bin Laden.)

"I once asked Neal how he does it," says Harold Agnew, the former director of Los Alamos Scientific Laboratory, who sits on GA's board. "And he said, 'My golden rule is to always buy straw hats in the winter.'"

Blue is a razor-sharp businessman, and interviews with dozens of Blue's associates and sparring partners suggest that he will do anything to maximize profit - even if it means violating agreements. And while some who have locked horns with him simply shrug their shoulders and move on, a few have taken him to court for breach of contract, fraud, and racketeering.

Blue admits to breaking contracts but won't comment on the rest. In Telluride, not far from where he grew up, the town even seized much of his land after a bitter fight with residents.

"I have used his house there periodically," says David Goldberg, Blue's friend and longtime business advisor, "and I have always advised my guests never to sit on the porch for fear of being 'duly rewarded' by the passing populace." (Translation: Duck and cover.)

Neal Blue is 73 years old but could easily pass for 50, thanks to his boyish face and fit build. Although shy in public, he's a good storyteller and speaks with authority about everything from John Locke to nuclear physics. Conversations can easily turn into often mind-bending monologues that last hours - a phenomenon some of his employees call "Blue-speak."

Blue's father was a real estate investor, and his mother the first woman to be Colorado's treasurer. He was a born opportunist. One high school friend remembers that during a public-speaking class he unabashedly played to the teacher's Catholic faith: When Blue was to practice giving an award, he presented a national championship trophy to the University of Notre Dame. When he had to talk about great architecture, he picked the Vatican.

"Everyone in the class would just roll their eyes," says Norman Augustine, former chairman of Lockheed Martin, who grew up with him in Denver. "But Neal got an A, and the rest of us didn't. That was vintage Blue."

It was also vintage Blue, friends say, to finance a road trip from France to India with his Yale buddies by selling articles to the New York Times and persuading Chrysler to donate a Dodge station wagon.

Blue outdid himself the following summer when he and Linden decided to fly a small plane over the Andes Mountains. It didn't matter that they didn't yet know how to fly. "Those were just details," Blue says with a wry smile.

That exploit, which was featured on the cover of Life magazine in 1957, laid the groundwork for the Blue brothers' future. After hearing that cocoa farming was a way to make money quickly, the brothers arranged financing to buy a slice of Nicaraguan jungle on the Caribbean coast, built an airstrip, and started planting.

While that venture failed, they had more success investing in sugar plantations, petroleum, and real estate. Neal was always looking for those straw hats. One morning in mid-1985 he read in the Wall Street Journal that Chevron (CVX, Fortune 500) was looking to sell some of the assets of newly acquired Gulf Oil. Sensing a bargain, he called Goldberg, his trusted advisor.

Soon Goldberg and the Blues flew to San Diego to look at an odd research entity that came with Gulf Oil. Founded as the nuclear think tank for General Dynamics (GD, Fortune 500), the unit, called General Atomics, had lost direction after being sold and resold to various oil companies. It built small nuclear reactors and pioneered a gas-cooled reactor for power generation - a technological coup but a commercial failure. The company also ran the country's largest fusion reactor.

"Neal was exceedingly unimpressed by it," says Goldberg. "But he was smart enough to spot it as a terrific real estate opportunity.... And he was smart enough to realize it might even be a place where he could do something with his ideas of transforming military doctrine."

Blue has long believed that when it comes to innovation, the military is almost always wrong. The armed forces are always buying overpriced technology designed for the last war. During his first days at General Atomics in 1986, Blue gathered the company's employees and laid out his vision: General Atomics would be remade in the image of the Hughes Aircraft Corp., back when its founder was still running it.

And like Howard Hughes, who often used his companies as vehicles for pursuing his obsessions, Blue soon announced that the company would begin research on his pet project: unmanned aerial vehicles. The company's employees, mostly engineers and nuclear physicists, were shocked.

Blue had originally conceived the aircraft as kamikaze strike weapons or as cheap cruise missiles, but after the Pentagon put out a call for an unmanned surveillance plane in 1993, Blue changed his mind. To execute his vision, he hired Tom Cassidy, a retired Navy admiral and commander of the service's elite Top Gun Academy. (When the producers of the Tom Cruise movie needed a gruff admiral for a bit part, they cast him.)

Cassidy's team stuck to off-the-shelf parts, using cameras made for traffic helicopters and a Bombardier engine originally designed for snowmobiles. He named it the Predator.

Air Force officials were initially unmoved: After all, many of them were former pilots - and no pilot has ever picked up a girl in a bar by bragging he flew a remote-controlled plane. More important, the Air Force was sinking hundreds of millions into a next-generation fighter jet, the F-22.

But the Predator was cheap (the original Predator cost a mere $10 million per plane) and scarily effective at providing intelligence. It was quiet and could fly for a full day at 25,000 feet, recording and relaying real-time video to commanders on the ground. Current versions even shoot Hellfire missiles.

Although the first Predator was launched during the mid-1990s Balkans conflict, it wasn't until the wars in Iraq and Afghanistan that military commanders integrated it into their arsenals.

"It is difficult," says Dyke Weatherington, the Pentagon's deputy director of unmanned warfare, "for us to keep up with the demand for these from the field."

While GA refuses to disclose its revenue or profits, the aeronautics business, which operates as a separate company, has sold more than $2.4 billion worth of drones and other equipment to the U.S. military in the past decade.

There are many sides of Neal Blue. There is the charming side he shows to reporters - military innovator, gutsy entrepreneur, and learned scholar. And there is the relentless side known only to his customers and the people who survive working for him.

ConverDyn, a uranium-processing subsidiary that GA co-owns with industrial giant Honeywell, recently sued Blue (that's right, his own company sued him) and described his business practices as "fraudulent, malicious, and willful and wanton."

This and other related lawsuits highlight Blue's unique blend of questionable conduct and business foresight. He got into the sugar business in the early 1970s before it hit its all-time high. He invested in natural gas when prices were controlled, and he minted money after it was deregulated.

And he recognized that uranium was a commodity that was so "out" that it had to be "in" one day. During the 1980s he bought tracts of land in the Australian outback when mining uranium there was banned. He gambled that a new administration would rewrite the laws to his advantage, then patiently waited a decade to be proven right.

In 2001, when Blue started producing the radioactive metal, it sold for approximately $8 a pound on the spot market. Three years later the price had about doubled, but Blue was locked into long-term contracts to sell much of the metal to utilities at close to 2001 prices.

Realizing the company was losing a tremendous opportunity, his subordinates allegedly devised a plan. An internal memo prepared by General Atomics' uranium subsidiary, Heathgate, in March 2004, recommended canceling or restructuring the contracts. The memo presented four options for backing out of the various deals, ranging from an intentional failure to deliver to allowing the subsidiary to file for bankruptcy.

Blue's company chose a controversial middle ground. It would approach customers and ask for concessions, saying its cost of production was higher than expected and that the mine was producing less than it had anticipated. Some customers were handed documents confirming those assertions and suggesting that if the contracts weren't renegotiated, Heathgate would have to file for bankruptcy.

What the companies weren't told was that, according to former employees, Blue had allegedly directed the company to increase its costs. Plus the company couldn't immediately go broke, since GA had agreed to continue providing Heathgate financial assistance - another fact conveniently left out of reports to customers.

Many of Blue's longtime employees saw this as tantamount to railroading customers. Two of Heathgate's Australian directors, Mark Chalmers and David Brunt, were so worried about the legality of what they were doing that they consulted an outside attorney. That lawyer advised them that implementing the plan could be considered a "conspiracy to defraud and the commission of at least one criminal offense by each director, which would be very difficult to defend." Soon Chalmers and Brunt were no longer employed by Heathgate.

Most customers agreed to renegotiate. But as the price of uranium continued to skyrocket - it had reached over $40 by early 2006 - Heathgate again told its customers that it was experiencing higher than expected production costs, lower than anticipated volumes, and did not have enough uranium to fulfill its orders.

The lawsuits allege that these contentions were grossly exaggerated. That year, Blue's executives told Chicago-based Exelon (EXC, Fortune 500), a $19-billion-a-year utility, that Heathgate would not deliver any uranium unless Exelon released them from the rest of the contracts. When the company refused, Heathgate and GA informed it that they would make no more deliveries. Exelon sued.

But Blue figured that didn't matter. He says the most they could sue him for was the "maximum liquidated price," or the amount of uranium times the price in the contract. In the meantime he could sell that disputed metal on the spot market for prices that peaked last year at nearly $140 a pound.

Exelon's lawsuit against General Atomics' parent company was settled in the spring for about $41 million, according to Exelon's SEC filings. The amount Blue made selling that same uranium on the spot market? More than $200 million, by some estimates.

While Blue won't discuss the specifics of the case - the settlement agreement is confidential - he doesn't seem concerned by the allegations in the lawsuits. In fact, he is utterly unrepentant.

"If you're a profit-center manager, you look at what are your contractual obligations," Blue says. "It's not your obligation to give as much as possible from your company to someone else.... It made more sense to, in essence, just pay the fine."

One afternoon this past summer, Blue pulled up in his brand-new silver Volkswagen outside one of his company's manufacturing facilities north of San Diego. It was 85 degrees, and he was wearing a short-sleeved blue dress shirt and dark-gray pants. Inside the warehouse were row upon row of remote cockpits for Predators.

From takeoff to landing, the Predator can be controlled with a joystick by a pilot sitting in a trailer thousands of miles away. But the original Predator "cockpit" looked more like a computer console than the deck of a fighter jet.

The new prototype Blue was here to inspect aimed to fix that. Indeed, it looked like a cross between a high-end videogame and the multimillion-dollar simulator airlines use to train pilots. But the system was buggy, and the video was so jittery that it hurt your eyes to look at it.

Blue's face dropped. "This shouldn't be like this," he snapped at a young programmer who was demonstrating the machine. His voice rose. "This is totally unacceptable. Wouldn't you agree? What is your problem? Why can't you get this stuff right?"

The pressure of GA's success - and the challenges Blue is facing in his other operations - may be taking a toll. The aeronautics business has grown so fast that it has apparently experienced production problems.

Northrop Grumman (NOC, Fortune 500) recently beat it out for a $1.6 billion contract to produce drones for the Navy. According to a recent report by the Government Accountability Office, the Navy had "substantial doubt" that the company would deliver the drones as promised. The Predator maker says the GAO report references "select instances of past performances," and it has since increased resources and staffing.

"That's just part of the capitalist world, which has provided so much to so many," Blue says. "But I suppose the fundamental essence of our portfolio, aside from some measure of economic balance, is 'Okay, how do you make a difference?' And in my case, it is in developing transformational technologies that could change the world. The rest of all this doesn't really matter."

It is a prime example of Blue-speak - a measured but completely unremorseful response that belies the sharp elbows and strong-arm tactics Blue often uses to achieve his goals. And it is perfectly in keeping with his stubbornly old-fashioned brand of doing business.

As Howard Hughes said, "Once you do consent to some such concession, you can never cancel it and put things back the way they were." He didn't have an heir, but Neal Blue sure comes close.