Atlas Minerals said Tuesday it will close its Atlas Moab Mill uranium milling operation near here, and begin a six- to seven-year effort to return the area to its natural condition.

The company, a division of Atlas Corp., has owned and operated the Moab mill since 1962 when Atlas Minerals Division was formed. For 20 years under Atlas, the mill processed uranium, vanadium and copper but was placed on standby status in 1984.Atlas closed its uranium operations last September when, the company said, it became clear that the depressed domestic uranium industry was not going to soon recover.

Atlas maintained the mill, at what it said was a cost of $1.5 million to $2 million per year, anticipating federal legislation that may have made the industry more profitable.

But a company spokesman said recent court decisions have made it apparent that the condition of the industry is not likely to improve in the near future.

Richard R. Weaver, president of Atlas Corp., said the company is reviewing plans with the Nuclear Regulatory Commission (NRC) and hopes to start decommissioning the mine and reclaiming the site within a year.

"Although we regret the economic conditions that made the closure a necessity, our goal now is to complete responsible and safe decommissioning and reclamation of the mill," said Weaver.

Weaver said changes in federal reclamation requirements require the company and the NRC to review the reclamation plan. He said the current NRC-approved plan for reclamation of the mill consists primarily of reshaping and covering the pile of uranium tailings, a by-product of uranium milling, which covers 130 acres of the 400-acre mill site.

He said the current plan will take six to seven years to complete and cost about $6 million. A surety agreement, which includes a non-cancellable letter of credit in the amount of $6 million, has been reached with the NRC to assure federal authorities that Atlas will complete the reclamation.

Tailings will be reclaimed in place on the mill site, covered with soil and rock, and planted with self-sustaining vegetation. Reclamation is designed to control radon gas emanation and to protect against erosion on the pond for at least 1,000 years.

"The reclamation will take place under federal oversight and will not be considered complete until it has received NRC approval," said Robert T. Exby, vice president-finance for Atlas Minerals and the executive in charge of the Atlas Moab operations.

Exby said decommissioning of the mill facility will begin as soon as Atlas gains final NRC approval. The first steps involve dismantling, decontaminating and salvaging buildings, fixtures and equipment. Eventually the mill site will be recontoured and revegetated with plants suitable to the Moab climate and soil conditions.

Atlas recently won an award for its reclamation work in arid areas of Colorado. Atlas said it plans to sell or reclaim all of its remaining Utah mines before 1990.

"Atlas has played an important and responsible role in the Moab community for more than 25 years," Weaver said. "We are determined to continue that legacy through complete and safe reclamation of the Moab Mill and tailings impoundment."

Atlas said it has shifted its primary emphasis to gold exploration and production. In its fiscal year ended June 30, Atlas produced 46,300 ounces of gold from its Gold Bar Mine and Mill in Eureka, Nev. The company said it plans to increase its rate of gold production 75 percent to more than 80,000 ounces a year beginning next January.