Uranium Mining Returns to Labrador: Moratorium Lifted
COMMENTARY—ProspectingJournal.com—Uranium is, slowly, coming back onto the radar for Canadian miners. The recent tiff with Rio and Cameco over Hathor Exploration in Saskatchewan gave a much needed boost to market awareness, as has the continued circulation of news regarding China’s plans to increase nuclear capacity four-fold over the next decade. And with the now “normal” nature of the stock market being that of a headline-driven fear play, uranium investors should take at least some consolation in the fact that uranium news has contained some positive swings.
After a three year hiatus, a significant portion of Labrador has re-joined the nuclear hunt. The Nunatsiavut Assembly has announced a lift on its three-year uranium mining moratorium on Labrador Inuit Lands (LIL). When asked why, Nunatsiavut’s Minister of Lands and Natural Resources, Glen Sheppard, said “We imposed this moratorium in April of 2008 to give us sufficient time to ensure we make an informed decision . . . The general consensus from beneficiaries and other stakeholders is that the moratorium should be lifted to allow any proposed development to proceed to environmental assessment.”
It was put in place to allow the government to establish a lands administration system and to develop an Environmental Assessment Act. While the ending of the moratorium hasn’t exactly come at an opportune time (as far as the market sentiment is concerned), the stress-relief for miners is well-deserved.
Of course uranium mining companies are thrilled, citing significant benefits for the region. Crosshair Energy Corporation owns two projects in the area. Although 92% of Crosshair’s Labrador property falls outside the Labrador Inuit Lands, as the company is quick to point out, the moratorium has significantly impacted the market value of all companies that operate in Labrador.
The biggest player, Paladin Energy, is now set to ramp up activity. Its subsidiary Aurora Energy claims that its Labrador-based Michelin project could extend for 17 years, employing more than 400 individuals. Having uncovered a significant uranium deposit in 2006, Aurora’s exploration has been on the backburner since the 2008 shutdown. Not surprisingly, uranium exploration plunged 95 % in Newfoundland and Labrador during the moratorium.
Crosshair, along with a handful of juniors and interested majors, is now looking to Paladin to make the first move by resuming exploration and development work in the new year. With the Nunatsiavut Environmental Protection Act set to come into force on or before March 9, 2012, expect interest in this area to heat up, as Asian demand for uranium fuels the wobbly recovery and conservative majors make strategic moves to invest in key deposits.