"Uranium stocks soar"Uranium stocks soar after Labor decision
April 30, 2007 - 6:24PM
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The share prices of several Australian uranium hopefuls have soared following a decision by federal Labor to scrap its 25-year ban on new uranium mines.
The ALP national conference voted on the weekend to shelve the 25-year ban, but Queensland Premier Peter Beattie and Western Australian Premier Alan Carpenter remain steadfast in their opposition to uranium mining.
Uranium miner Energy Resources of Australia Ltd added 74 cents, or 3.02 per cent, after the news to close at $25.22.
Several explorers also made significant gains, including Nova Energy Ltd, which put on 15 cents to $4.05, PepinNini Minerals gained eight cents to $2.73, Deep Yellow Ltd gained four cents to 67.5 cents and Toro Energy Ltd picked up three cents to $1.28.
Toro managing director Greg Hall said the overturning of the ban was a significant step and was likely to put pressure on the Queensland and West Australian governments to evaluate their fierce opposition to uranium mining.
"You've got to have both the state and federal levels of politics agreeing, so it's very significant that the federal labour policy is now to allow uranium mines to proceed," he said.
"I think it will put pressure on QLD and WA.
"They have to go through their state processes and that might take some time."
Mr Carpenter has previously said uranium mining in WA would not happen while he was premier.
The Minerals Council of Australia (MCA) said the historic shift in Labor's national policy would be little more than a token gesture if there were not fundamental changes made to state legislation.
MCA chief executive Mitch Hooke said the opposition by some state governments was anachronistic and inconsistent with a modern, national approach to uranium mining.
Australia has 40 per cent of the world's known uranium resources but only three mines - Olympic Dam and Beverley in South Australia and the Ranger mine in the Northern Territory.
Mr Hall said the policy change would provide investors and companies with added confidence when putting money into their projects, and made Australia's uranium industry more attractive to foreign investment.
"It most certainly gives the confidence in investing in the future," he said.
"My experience with talking with overseas investors is they have been a little confused with the policy.
"This has clarified the situation and may make us more attractive for investment."
Australia's uranium sector has already sparked interest from a number of foreign outfits including Mega Uranium Ltd, Hong Kong-based investment bank Crosby Capital Partners and French nuclear giant Areva.
A surging uranium price, which has more than doubled over the past 12 months to $US113 per pound, has also helped to renew interest in uranium.
Brokerage Goldman Sachs JBWere said the outlook for the uranium price in the sort term remained robust as primary mine supply suffered from production issues and secondary supply was reduced.
© 2007 AAP