In Australia, a U-turn on uranium - Yahoo! News

SYDNEY (AFP) - Australia's multi-billion dollar uranium industry is gearing up for expansion amid signs the Labor Party could drop its 22-year-old ban on new mines.
The dusty red outback contains the world's largest known reserves of yellowcake.
But since 1984, the left of centre party, which opposes nuclear power, has restricted the number of mines to just three.
Although Labor is not in federal government, it controls all the state authorities across Australia which are responsible for granting mining and exploration licenses.
Mining interests complain the policy has put a stranglehold on the industry and allowed Canada to outpace Australia in supply, despite having substantially smaller reserves.
Amid surging global demand for nuclear fuel and a government review of the nuclear industry, opposition leader Kim Beazley last week called on his Labor Party to drop the policy.
"I believe the real issue is what we do with the uranium we mine, not how many places we mine it," said Beazley, adding he would introduce the strongest export safeguards in the world if he won office.
The issue will dominate Labor's annual convention in April, and has already split the party with several key figures vowing to oppose the ban being lifted.
But Beazley's call for a U-turn last Monday sent ripples through the share market and caused a wave of optimism in the uranium industry.
Paladin Resources, which is sitting on 20,000 tonnes of uranium at Manyingee and Oobagooma in Western Australia, jumped 5.5 percent to 4.21 Australian dollars (US 3.20 dollars) on the day.
Shares in Toro Energy, which holds an exploration license in South Australia, shot up 14 percent to 86 cents.
Uranium Exploration Australia, which has more than a dozen exploration licenses across three states, raced up 12.5 per cent to 31.5 cents.
Fat Prophets senior resources analyst Gavin Wendt said the share movement was speculative and noted the premiers of Queensland and Western Australia opposed the ban being lifted.
"There is still a lot of uncertainty," he told AFP.
But industry players saw Beazley's announcement as a major step forward that would lend further confidence to the sector and see a fresh injection of capital to fund exploration.
"I believe it is a significant turning point," Stephen Biggins, managing director of explorer Southern Gold, told AFP.
The industry is ripe for expansion.
Australia has 39 percent of the world's known reserves of uranium that can be recovered for less then 40 US dollars a kilogram. Canada has 17 percent, followed by Kazakhstan with 16 percent.
Global demand for uranium is surging as countries turn increasingly to nuclear power.
China alone has announced plans to build 28 new nuclear reactors and this year signed a deal to import 20,000 tonnes of uranium from Australia a year from 2010 -- double Australia's current exports of the nuclear fuel.
Demand has seen the spot price for uranium ore rise from around 10 US dollars a pound in 2003 to more than 45 US dollars.
But Labor's policy of restricting the number of mines has meant vast deposits of yellowcake remain untapped and demand is outstripping supply.
There are only three uranium mining operations in Australia: the giant Olympic Dam mine controlled by BHP Billiton in South Australia; the Ranger mine in the Northern Territory run by Energy Resources of Australia and General Atomics' Beverley mine in South Australia.
They produced a combined total of 10,592 tonnes of U3O8 in 2004, approximately 22 percent of global production, according to GeoScience Australia. In the same year, Canada accounted for 29 percent of production.
A change in Labor's policy would help unlock massive deposits.
According to the Uranium Information Centre, there are some 25 major deposits and prospective mines across the country, many of which face opposition from either Labor state governments, traditional Aboriginal land owners, or both.
In Western Australia, for example, where state Premier Alan Carpenter opposes a policy change, Rio Tinto is sitting on 36,000 tonnes of uranium in Kintyre, while BHP Billiton owns the 52,500 tonne Yeelirrie deposit.
Neill Arthur, executive chairman of Uranium Exploration Australia, said it was difficult to predict whether the party would back Beazley.
"I think it is a significant change of intent," he told AFP. "But he has to take the rest of the caucus with him."