Uranium miners press Ottawa to change Cold War rules

[Oscar]

Uranium miners press Ottawa to change Cold War rules

[ http://www.theglobeandmail.com/report-o ... le9869929/ ]

ROD NICKEL WINNIPEG — Reuters

Published Monday, Mar. 18 2013, 7:28 AM EDT
Last updated Monday, Mar. 18 2013, 7:30 AM EDT

Two of the world’s biggest uranium miners, Rio Tinto PLC and Areva SA, 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., 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 per cent of any uranium mine. There are no ownership restrictions on foreign participation in exploration.

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Ottawa has restricted foreign ownership of uranium mines since 1970, driven by concerns about weapons proliferation, and efforts to change the rules have waxed and waned over the years.

A 2008 report recommended Canada liberalize the policy for countries that are open to Canadian investment.

“It was more than thought about - they were heading down this direction,” said Saskatchewan Premier Brad Wall.

But foreign control of Canadian resources became a hot political potato in 2010, and Ottawa blocked BHP’s bid for Potash. A review of uranium policy was halted, leaving Wall puzzled. Natural Resources Minister Joe Oliver said on March 4 that the government has no plans to change its policy.

Wall said Ottawa’s curbs on state-owned investment in oil sands companies could provide a model for changes to the Non-Resident Ownership policy (NROP) in the uranium sector.

“We said perhaps this (approach) is a good replacement for NROP, because obviously uranium is very much a strategic resource as well for our country,” said Wall, who opposed the BHP bid for Potash Corp because he feared it would cut potash prices and government royalties.

Unlike Potash Corp, Cameco is protected from takeover by Canadian law.

Areva, in which the French government owns a controlling stake, could be grandfathered in but other state enterprises would be blocked, he said.

But the pleas may fall on deaf ears in Ottawa, where the opposition New Democratic Party (NDP) also wants to keep a lid on foreign uranium investment.

“I think Canada is more than fair despite the fact that we have some restrictions in some key strategic sectors, and if you asked the Canadian public, I think they would be inclined to say we have to be very careful,” said Peter Julian, the NDP’s energy and natural resources critic.

Saskatchewan argues that it matters little who owns its uranium mines as long as they are not state-owned enterprises.

Opening the door to foreign miners only makes sense, considering that Canada has negotiated new market access to energy-hungry China and India, Wall said.