Queensland premier reverses aversion to uranium mining

The likelihood of uranium mining in Australia got a boost on Friday as the premier of one its most important states Queensland — reversed his strong opposition to uranium mining.

The country has been under a moratorium that has limited the number of uranium mines in the uranium rich continent to just three.

But Queensland Premier Peter Beattie says he will now support uranium mining after a report showed uranium mining would not threaten Queensland’s coal industry. He had previously expressed concerns that increased uranium mining would threaten the coal industry.

Beattie is expected to support an end to his Labor Party’s no new mines policy at the partys national conference next month on the condition that it is only sold to countries that have signed the non-proliferation treaty.

The news is a particular boon to Paladin Resources who last year acquired 50% of the Valhalla/Skal project in the state. Paladin is currently attempting to acquire the other 50% by taking over Summit Resources, but the two companies are locked in a legal battle over Paladins acquisition of the first 50% of the project

In total Queensland is estimated to have $3 billion worth of uranium in the ground.

The move comes shortly after the state government introduced legislation banning nuclear facilities — a fact that has some environmental groups in the region complaining of state hypocrisy.

But the move has met with the support of the federal Industry Minister Ian Macfarlane, who said it was in the best economic interest of Queensland. The minister also called on the premier of Western Australia to drop his opposition to uranium mining.

If the ban is ended, Paladin says the Valhalla/Skal project would be free from the development restrictions it is currently under.

The company has estimated that the project could reach production by 2012 two years later than what joint venture partner Summit has said.

Paladin shares climbed 4% or 34 to $8.78 on 2.9 million shares traded in Toronto on March 23.