An environmental group Roanoke River Basin Association has opposed Virginia Uranium’s plan to mine deposit in border of the US state of North Carolina.
Virginia Uranium planned to mine the deposit in Pittsylvania County in the center of the Roanoke River Basin.
The company estimates its value at $7bn to $10bn.
The group is opposed to the company’s proposal to end a 29-year ban on uranium mining by the state of Virginia.
The group said a study that concluded mining operations could harm local water supplies supply if a hurricane or tropical storm causes massive flooding.
About 350,000 North Carolina residents rely on the basin as their water supply while the region already supplies 65 million gallons a day to Virginia Beach.
Kerr Reservoir upstream of Lake Gaston would trap up to 90% of radioactive waste, while the remaining 10% could enter the lake, according to the study.
It would take up to two years to completely flush radioactive contaminants downstream, according to businessweek.com.
The company said it would apply to the government to end the ban in 2012.