PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2021

PROPERTY, PLANT AND EQUIPMENT.

PROPERTY, PLANT AND EQUIPMENT

4. PROPERTY, PLANT AND EQUIPMENT

	Net Book Value of Property Plant and Equipment at December 31, 2021
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		4,462		28		4,490
Construction in progress		1,017		—		1,017
Total	$	14,451	$	28	$	14,479

	Net Book Value of Property Plant and Equipment at December 31, 2020
(thousands of dollars)	Alabama		Corporate		Total
Mineral rights and properties	$	8,972	$	—	$	8,972
Other property, plant and equipment		—		13		13
Construction in progress		—		—		—
Total	$	8,972	$	13	$	8,985

Construction-in-progress at December 31, 2021 of $1.0 million primarily relates to construction activities related to the Phase I of the Coosa Plant. The $4.5 million increase in other property, plant and equipment relates to the purchase of the two buildings in October 2021 and the land grant received from local municipalities in July 2021 that will be used to support the Coosa Plant.

Impairment of Property, Plant and Equipment

No impairment charges were recorded on the Company’s graphite assets for the year ended December 31, 2021. The Company recorded the following impairment charges for the year ended December 31 2020, related to its former uranium projects and processing facilities.  

	For the year ended December 31,
	2020
	(thousands of dollars)
Kingsville Dome project	$	101
Rosita project		1,161
Cebolleta/Juan Tafoya project		3,938
Total Impairment	$	5,200

Estimates and assumptions used to assess recoverability of the Company’s long-lived assets and measure fair value of its mineral properties are subject to risk uncertainty. Changes in these estimates and assumptions could result in the impairment of the Company’s long-lived assets. Events that could result in the impairment of the Company’s long-lived assets include, but are not limited to, decreases in the future mineral prices, decreases in the estimated recoverable minerals and any event that might otherwise have a material adverse effect on its costs.

Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of uranium properties upon acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of minerals that will be obtained after taking into account losses during processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups.

The Company reviews and evaluates its long-lived assets for impairment on an annual basis or more frequently when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. On September 1, 2020, the Company signed a binding LOI to sell its U.S. uranium assets to enCore Energy Corp. At September 30, 2020 an interim impairment review was performed in anticipation of the sale of Westwater’s uranium business to enCore. As a result, $5.2 million in impairment expense related to the Company’s long-lived uranium assets in south Texas and New Mexico was recognized in the third quarter of 2020.

Land Addition

On June 22, 2021, AGP entered into incentive agreements with the State of Alabama and local municipalities for the siting of the Coosa Plant. The incentive agreements provide certain tax credits and incentives under the Alabama Jobs Act in connection with the construction of the processing facility. Additionally, in connection with and in contemplation of the incentive agreements, on July 23, 2021, AGP entered into a land lease with the Lake Martin Area Industrial Development Authority. The lease provides AGP rights to approximately 70 acres to construct and operate its commercial

graphite processing facility in Coosa County, Alabama. The lease has a term of 10-years, a nominal lease payment, and transfer of title to AGP at the end of the lease term. Further, the lease provides AGP the option to purchase the land for a nominal amount during the term of the lease. The incentive agreements and the lease are accounted for by the Company as a government grant; whereby the Company realized the fair value of the land of $1.4 million as an increase to Property, Plant, and Equipment with a corresponding obligation recorded in Other long-term liabilities in the consolidated balance sheet at December 31, 2021. The land represents a non-depreciable asset on the Company’s consolidated balance sheet. The corresponding obligation recorded in Other long-term liabilities on the consolidated balance sheet will be amortized to other income over the life of the Coosa Plant once placed in service.