Renewable Energy

U.S. Supreme Court upholds Virginia ban on uranium mining

The largest-known U.S. uranium deposit will remain firmly under ground after the Supreme Court on Monday upheld Virginia's moratorium on mining the radioactive metal, rebuffing a challenge backed by the Trump administration to the ban.

By Andrew Chung

WASHINGTON, June 17 (Reuters) - The largest-known U.S. uranium deposit will remain firmly under ground after the Supreme Court on Monday upheld Virginia's moratorium on mining the radioactive metal, rebuffing a challenge backed by the Trump administration to the ban.

In a 6-3 decision, the justices affirmed a lower court's ruling that threw out a lawsuit brought by Virginia Uranium Inc and other owners of the massive deposit valued at billions of dollars on private land in southern Virginia. The company contested the state's authority to enact the ban enacted in 1982, saying the state policy should have been preempted by federal law.

Virginia Uranium is a subsidiary of Vancouver, British Columbia-based Virginia Energy ResourcesVUI.V.

The dispute focused on whether the federal Atomic Energy Act of 1954, which regulates the development of nuclear energy, preempts Virginia's mining ban under the U.S. Constitution's so-called Supremacy Clause, which holds that federal law generally trumps state law. President Donald Trump's administration had backed the company's challenge to Virginia's law.

The case thrust Virginia into the center of a national debate over uranium mining. It pitted the rights of states - specifically to control their natural resources and protect the environment - against federal law and the need to maintain access to raw materials critical for nuclear weapons and power plants.

The ruling could entice other states to restrict the availability of source materials or create financial barriers to nuclear energy development, potentially reducing uranium production.

At the center of the dispute is the uranium deposit located beneath a privately owned estate in Virginia's Pittsylvania County, near the North Carolina border. Virginia Uranium was seeking to exploit the deposit, valued at about $6 billion.

The Atomic Energy Act gives the federal Nuclear Regulatory Commission the sole power to regulate radiation safety standards for milling uranium ore and disposing of waste byproducts known as tailings, key steps in the production of nuclear fuel. But it does not cover conventional uranium mining on non-federal land.

Justice Neil Gorsuch, who announced Monday's ruling from the bench, said, "The federal government has no authority to regulate mining itself, and the AEA does nothing to withdraw that regulatory power from the states."

Virginia had the support of several other states concerned about protecting states' rights, including Indiana, Texas, Massachusetts and Oregon.

While uranium remains a vital resource for electricity and national defense, Virginia enacted its ban on uranium mining amid concerns about environmental and public safety hazards.

Virginia Uranium touted the economic benefits for Virginia, saying it could create more than a thousand jobs annually and pump billions of dollars into the local economy.

The company emphasized uranium's critical importance in nuclear weapons and powering U.S. nuclear submarines and aircraft carriers, noting that most uranium used in the United States is imported, including from "geopolitical rivals" such as Russia.

The plaintiffs, also including Cole Hill LLC and Bowen Minerals LLC, sued Virginia in 2015. The Richmond, Virginia-based 4th U.S. Circuit Court of Appeals in 2017 upheld a trial judge's ruling to toss out the lawsuit.

(Reporting by Andrew Chung; Editing by Will Dunham)

((andrew.chung@thomsonreuters.com; 646.223.8022; 646.407.9441 mobile\))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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