Canadian government approves overseas ownership

Tuesday, 23 June 2015

The Canadian government has approved Australian majority ownership of the proposed Michelin uranium mine, in an exception to Canadian legislation on overseas ownership in commercial mining operations.

Michelin base camp in winter (Image: Paladin)

Australian uranium producer Paladin Energy owns the Michelin project in Newfoundland and Labrador through its wholly owned Canada-based subsidiary Aurora Energy. It commenced exploration at the site in the summer of 2012 after the Nunatsiavut Assembly lifted a moratorium on the development of uranium projects on Labrador Inuit lands.

Under Canada's Non-Resident Ownership Policy (NROP), non-resident mining companies can own 100% of an exploration project but a minimum of 51% resident ownership is required before the first stage of commercial production. Resident ownership levels of less than 51% can be permitted for individual projects if it can be clearly demonstrated that the project is in fact Canadian-controlled, and the government can grant exemptions to the policy in cases where it can be demonstrated clearly that Canadian partners cannot be found.

An announcement from Canada's minister of natural resources Greg Rickford of the government's approval of Paladin's application for majority ownership noted that Paladin had satisfied the conditions for an exemption and demonstrated that there were no Canadian partners that would be interested in leading the development of the proposed project. The proposal is supported by the governments of Newfoundland and Labrador, Saskatchewan and Australia, as well as Canada's uranium mining sector, the ministerial statement noted.

The decision follows a five-month appraisal process by the Canadian authorities in which Paladin was questioned on its achievements, technical abilities, environmental performance, commodity knowledge and social responsibility, particularly its relation to the local communities and its standing with the Nunatsiavut government, which manages the Labrador Inuit Lands. The project was also subject to a national security review.

Paladin noted that the granting of an exemption from the NROP would allow it eventually to proceed to production at Michelin with the possibility of introducing a minority joint venture partner. Managing director and CEO John Borshoff said that the ownership exemption was vital for the project's progress. "With the inevitable market improvement ahead, this exemption allows us to develop a uranium mine at our Michelin Project in Labrador when the uranium price is at an appropriate level and after obtaining all necessary approvals and consents," he said. "I sincerely thank the Canadian Government for this historic decision and, more importantly, the trust those authorities involved have shown in Paladin which we take very seriously", he added.

The entire Michelin project area, approximately 140km north east of the town of Happy Valley-Goose Bay, is estimated to contain measured and indicated mineral resources of 100.8 million pounds U3O8 (38,770 tU) and inferred resources of 39.8 million pounds U3O8 (15,310 tU), with 84.1 million pounds U3O8 (32,350 tU) of measured and indicated resources and 22.9 million pounds U3O8 (8808 tU) in the Michelin deposit itself. Paladin believes that the surrounding area is highly prospective for further uranium discoveries.

Any proposal to develop a mine at Michelin will be subject to environmental and community impact assessments by the Canadian Nuclear Safety Commission and other relevant authorities.

Researched and written
by World Nuclear News