The Total amount of damages sought by United Nuclear Corp. in its lawsuit against General Atomic Corp. is about $2.25 billion. Counter-suits against UNC total about $1 billion. An incorrect figure was published in Tuesday editions of The Post.
A trial pitting a small Northern Virginia company against one of the energy industry's giants, Gulf Oil Corp., opened in Santa Fe, N.M., yesterday.
Proceedings could last two months and could shed light on allegations that an international cartel established uranium prices in the early 1970s.
United Nuclear Corp. of Falls Church has accused Pittsburgh-based Gulf of entering into an agreement with the smaller firm on the future supply of uranium - but without informing United of projected increases in uranium prices.
The case dates back to 1973 and 1974, when United signed contracts obligating it to provide General Atomic Corp., a partnership of Gulf and Scallop Nuclear Inc., with some 27 million pounds of uranium concentrate (Yellowcake) at $7 a pound. The latter is part of the Dutch Shell Group.
In August 1975, United filed a suit seeking to void the uranium sales contracts and alleging that General Atomic committed fraud by not informing the Falls Church firm of a projected boost in uranium prices - even though Gulf allegedly was aware of future price increases because of its connections to the world cartel.
United lawyers said yesterday they are seeking damages of $2.27 million. The price of uranium currently is about $42 a pound, and the contract with Gulf covers about a quarter of United Nuclear's uranium reserves.
Both companies have a large stake in the outcome of the trial, being conducted in a state district court.
Because United's contracts with Gulf called for delivery of uranium at $9 to $10 a pound, a victory for the giant oil company would have a large impact on the Falls Church firm.
Indeed, United Nuclear officers have noted that their firm's refusal to made deliveries to date has strengthened it and allowed it to rebuild a uranium production base that could not have been financed without the withholding.
In the six months ended Sept. 30, United Nuclear had record profits of $13.5 million ($2.12 a share) on revenues of $110 million compared with profits in the 1976 period of $9.5 million ($1.50) on sales of $74 million.
For Gulf, the trial offers a new forum for defense against allegations of complicity in the cartel. Gulf officers have argued in previous congressional testimony that their Canadian subsidiary was required to take part in a uranium cartel but that the U.S. market was exempted.
In their opening statements yesterday, Gulf lawyers said the United Nuclear case is nothing more than "attempt to break a contract." The contract was incorporated in a supply agreement executed at the time United Nuclear terminated a joint venture with Gulf.
The United-Gulf case is the second now on trial involving uranium supplies. In Richmond, a federal court is hearing a case involving Westinghouse Electric Corp., which is unable to supply uranium committed to electric utilities without buying the ore on the open market at today's higher prices.
In New Mexico, the issues involved include allegations of antitrust violations, fraud and a commercially impractical contract, in the view of United Nuclear.