The much delayed project, which proposes to open up virgin mines and have a uranium processing plant (mill), awaits final clearance from the Ministry of Environment and Forests (MoEF). It has already completed the environmental impact assessment, public hearings and obtained clearances from the forest department. The estimated ore resources in the Lambapur and Peddagattu areas of the district, as per the Atomic Minerals Division (AMD), a unit of the Department of Atomic Energy (DAE), is in the range of 11.02 million tonnes. The final usable uranium output would be around 6,800 tonnes.

The UCIL mine and mill is targeted to generate about 155 tonnes per year of uranium to fuel the expanding nuclear power reactor programme, which uses natural uranium-pressurised heavy water reactors (PHWR).

In power generation terms, a typical, standard 220 MW, PHWR would require 40 tonnes of uranium fuel annually to generate electricity at high capacity factor (plant load factor in thermal power plants).

The uranium mining project is economical, but concerns raised by environmentalists and the fear psychosis among the local people is coming in the way of implementation. As per UCIL's milestones for the project, it should have gone into production this year, say company sources.The Nalgonda project attracted opposition from environmental groups on several counts — the mining would result in radiation which would have harmful impact on people and environment; the ore processing unit would lead to pollution of waters in the nearby Nagarjunasagar, a drinking water source.

Further, the initial site for the mill was in Mallapuram, which was in the Reserve Forest, under the Nagarjunasagar Tiger Reserve. Under the Indian Wildlife Act, industrial activity is prohibited within 25 km of notified sanctuary area.

UCIL officials say they have shifted the site of the mill about 50 km, which now would not create any problems. The company also organised an awareness trip for locals to Jaduguda mines, now in Jharkand, to allay fears on radiation and health hazards.

Interestingly, the mining project attracted the attention of the CPI (Maoist) (then People's War) around 2003. The strident opposition by the locals and tribals at one stage resulted in the taking away of equipment and machinery of the DAE staff who had gone to do some preliminary work. The AMD reportedly issued a plea to the Maoists to recover it.