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Virginia Uranium seeks public subsidy to cover long term damage

Virginia Uranium is seeking a public subsidy to cover the risks associated with their venture. This could result in a scenario not unlike the recent public bailout that covered the sub-prime loan risks taken by mortgage banks.

Uranium offers short-term boost, long-term risks, Star-Tribune Peter Hairston  January 4,   The long-awaited National Research Council, or NRC, report on uranium mining in Virginia concludes, as one could expect, that there are benefits and risks to uranium mining.

The potential public benefits to the Pittsylvania County region have been estimated and extensively publicized. What has not been given due attention in the NRC report or in public discourse is the allocation of the public risks in relation to the potential private benefits.

When this is considered in light of the basic, conservative principles of free market economics, it is clear that current uranium mining plans will result in the public bearing the principal risks, while the mining company gains the principal profits.

First, as legitimate capitalists, Virginia Uranium Inc.’s investors are seeking a good return on their investment.

As an economic entity, Virginia Uranium is not concerned about jobs or other benefits to Pittsylvania County other than to further its business goals by using positive public relations and legislative influence.

If these investors could identify an investment with higher potential returns elsewhere, they would invest their money elsewhere.

Further, Virginia Uranium is 30 percent owned by a foreign corporation that has options to purchase a larger ownership share, so a substantial part of these profits will go outside our country……

business method used to address otherwise unmanageable risks is to set up a separate corporate entity that engages in no other business activity and has few assets.

If a large liability occurs the corporation can declare bankruptcy so any harmed parties and creditors will be left with only the few assets of the incorporated entity, while the community will incur the potentially huge costs of ill health, spoiled groundwater, lost real estate values, and other disruptions.

Meanwhile, executive salaries and investor dividends that have been paid are untouched.

We should ask ourselves why uranium mining in Pittsylvania County is being pursued only by a private start-up corporation with undisclosed assets and with 30 percent backing from a foreign corporation, oddly named “Virginia Energy Resources Inc.,” with its foreign stock currently valued at a meager 17 cents per share.

Thirdly, in our free market economy we assign a monetary value to risk via the sale of insurance: if risks are low (such as having a safe driving record), insurance cost is low; if risks are high, insurance is more expensive; and if risks are too high, insurance is unobtainable.

Thus in a fair economy, Virginia Uranium should purchase insurance to cover the risks to the public associated with their mining operation.

However, as the NRC report points out, uranium mining and tailing storage risks last for 1,000-plus years.

I sincerely doubt uranium mining in an area with the population density of Pittsylvania County would show a positive investment return if the business operation had to buy even 30 years of insurance coverage against the predicted worse case economic impact of $11 billion.

Without real insurance, any statement that mining risks are low and can be addressed is strictly an empty promise with no backing.

These three points define the key economic fact underlying the currently proposed uranium mining operation: the primary financial returns go to Virginia Uranium and its foreign investor, while the primary risks are borne by the public.

In a nutshell, Virginia Uranium is seeking a public subsidy to cover the risks associated with their venture. This could result in a scenario not unlike the recent public bailout that covered the sub-prime loan risks taken by mortgage banks.

Similarly, Pittsylvania County could realize a near-term economic boost, but only by passing along uranium mining risks to our children, grandchildren, and future generations…..  http://www.wpcva.com/opinion/article_a58be9bc-36e1-11e1-ba22-0019bb2963f4.html

January 5, 2012 - Posted by Christina Macpherson | Uranium