Analysis: Uranium miners press Canada to change Cold War rules

Sun Mar 17, 2013 11:11am EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Two of the world's biggest uranium miners, Rio Tinto PLC (RIO.L: Quote) and Areva SA (AREVA.PA: Quote), are pressing Canada to change a Cold War era policy that curbs foreign ownership of uranium mines.

The campaign, backed by the Australian government, two Canadian provinces and Western Australia-based uranium producer Paladin Energy Ltd (PDN.AX: Quote), could unlock some of the world's highest-grade ore for development just as demand for the radioactive element looks to surge.

Unlike Australia, which has no restrictions on uranium-mine ownership, Canada restricts foreign companies from owning more than 49 percent of any uranium mine. There are no ownership restrictions on foreign participation in exploration.

"It's such an absurd situation," John Borshoff, managing director of Paladin, said in an interview. It's "something that is an anachronism from the Cold War".

Borshoff said the Australian government, Rio Tinto and Paladin are joining forces to lobby Ottawa, while the Canadian provinces of Saskatchewan and Newfoundland and Labrador are also pressing for change.

The push to open Canada's uranium sector comes while spirited debate about foreign investment elsewhere in the economy is underway. Ottawa last year approved a takeover of oil company Nexen Inc by China's CNOOC Ltd (0883.HK: Quote) but declared the Canadian oil sands off limits to state-owned enterprises in the future.

In 2010, as public concern grew about foreign control of resources, Ottawa blocked a hostile bid for fertilizer producer Potash Corp of Saskatchewan (POT.TO: Quote) by Anglo-Australian miner BHP Billiton PLC (BLT.L: Quote).

LOTS OF URANIUM   Continued...

A Rio Tinto logo is displayed on the front of a wall panel during a news conference in Sydney November 29, 2012. REUTERS/Tim Wimborne