Posted: April 16, 2008, 4:20 PM by Jonathan Ratner
Right or wrong, opposition to uranium projects shouldn’t surprise anyone since the fear of exposure in most communities would likely be high. Take Virginia for example. The state has had a 25-year moratorium on uranium mining and exploration since 1982. It also has a least one potentially viable uranium deposit. But at the same time, it relies on nuclear energy for roughly 48% of its power.
It is this type of NIMBY (not in my backyard) legislation from governments around the globe that is again posing major challenges for miners and investors alike, Canaccord Adams analyst Wendell Zerb pointed out in a recent note.
In Canada, which was the world’s largest uranium producer last year, the Nunatsiavut Government in Labrador last week voted in favour of a three-year moratorium on mining for uranium on Inuit land. Aurora Energy Resources Inc., which was planning to begin uranium production in Labrador in 2013, took the biggest hit. TSX Venture-listed names like Crosshair Exploration & Mining Corp., Bayswater Uranium Corp., Silver Spruce Resources Inc. and Universal Uranium Ltd. also declined, but at least some of these losses have been erased since.
In Australia, the world’s second-biggest uranium producer, the new government under Kevin Rudd is aggressively pro-uranium, Mr. Zerb noted. But in a country where mining and export of the nuclear fuel have long been a subject of debate, the leading Labour Party still opposes the development of nuclear power generating.
Proposals from Ango-Australian mining giants like BHP Billiton and Rio Tinto seem to going nowhere in Western Australia, as the region’s premier is against uranium mining but is allowing exploration. TSX-listed Mega Uranium Ltd. and Paladin Energy Ltd. are exploring in both the west and in Queensland, where Laramide Resources Ltd. is also advancing its assets and where there is a uranium mining ban. Mr. Zerb said there was hope that a new government might overturn the anti-uranium policy, but pressure from coal mining unions appears to be too strong for now.
And then there’s Mongolia. It should be familiar to investors who have owned names like Ivanhoe Mines Ltd., which is working with Rio Tinto on the multi-billion dollar Oyu Tolgoi gold and copper project. Once considered to have some of the most favourable minerals laws for operators, changes in the summer of 2006 that essentially deemed all minerals the property of the state, changed things dramatically.
For Rio and Ivanhoe, they won’t move ahead until this issue is cleared up. “If a company such as Rio Tinto is not able to negotiate an equitable agreement, general consensus is that not many other companies will succeed either,” Mr. Zerb said. The situation has also impacted companies like Khan Resources Inc. and Western Prospector Group Ltd. who are also operating in Mongolia, since the government deems uranium a strategic resource.
So while each situation has its own set of factors, and reducing greenhouse gas emissions may be a perfect reason to support nuclear power, views can change pretty quickly when a uranium mine or nuclear plant is set to come to the neighbourhood.
No comments:
Post a Comment