Canada approved Australia’s Paladin Energy Ltd. to hold a majority stake in a planned uranium mine in Newfoundland and Labrador, a decision that may open the door for other foreign investors seeking supplies of the nuclear fuel.
The government granted an exemption under its Non-Resident Ownership Policy, which for more than two decades has stipulated that uranium mines must be at least 51 percent Canadian-owned when they start production. The move allows Paladin to proceed with development of the Michelin project, the company said in a statement Monday.
Exemptions under the policy are allowed where Canadian partners can’t be found. The government said Paladin demonstrated that this was the case with Michelin.
“This is a historic decision that could have implications for all uranium companies and projects in Canada,” said David Sadowski, an analyst at Raymond James Ltd. in Vancouver. Chinese nuclear utilities have said in recent months they’re considering the acquisition of a Canadian uranium project to meet their future needs, he said in a note Monday.
Paladin will start its summer exploration program at Michelin in July. It said the the area surrounding the project, located 140 kilometers (87 miles) northeast of the town of Happy Valley-Goose Bay, may hold additional uranium deposits.
Paladin shares closed unchanged in Toronto at 28 Canadian cents.