SYDNEY (XFN-ASIA) – Australian uranium mining hopefuls now have more chance moving into production after the Australian Labor Party (ALP) dropped its longstanding ‘no new uranium mines’ policy at its national conference during the weekend, analysts said.
They said the ALP’s move saw support for uranium stocks during today’s trading session and particularly stocks which have deposits in South Australia and The Northern Territory where there is no opposition to new uranium mining at a state level.
Policy opposing new uranium mines was dropped at the federal level ahead of national elections this year as opinion polls give the party the best chance of winning power in more than a decade from the conservative government, led by Prime Minister John Howard, which came to power in 1996.
Australia holds 40 pct of the world’s known uranium reserves but falls behind Canada in production because the ALP has capped the number of mines at just three since 1984.
These are BHP Billiton’s Olympic Dam project in South Australia, Rio Tinto controlled Energy Resources of Australia Ltd’s Ranger mine in The Northern Territory and US-based General Atomics’ Beverley mine in South Australia.
It is now up to individual states, which are all ruled by ALP governments, to endorse uranium mining at a state level.
ABN Amro resources analyst Warren Edney said uranium mining hopefuls with projects in South Australia and The Northern Territory will benefit most in the near-term.
Edney said the South Australian government has already relaxed to opposition to new uranium mines which hosts the already producing world-class Olympic Dam uranium project and the next uranium mine likely to be developed – the Honeymoon project owned by Toronto-listed sxr Uranium Inc.
He said the Northern Territory government last year handed over power to approve new mines to the federal government which puts companies with uranium projects in Australia’s top end in the position to contemplate development now that the ALP has dropped its opposition.
‘It is a move forward in that the ALP has said yes they will allow uranium mining but they have also allowed the states to choose, so what it does is free up the federal government to go ahead and allow uranium mining in the Northern Territory without going against ALP policy,’ Edney said.
‘In South Australia, there’s really no change as they have been letting people go down the track to development which will allow Honeymoon to go ahead.’
Edney said there are other projects in the South Australia and The Northern Territory that have already had feasibility studies down, which may now move ahead to development.
But governments in the other two states where there are known uranium deposits are maintaining their opposition.
‘There’s more uncertainty with Western Australia and Queensland though there would be bigger upside say in Western Australia if the government there changes its mind,’ Edney said.
The Australian Uranium Association welcomed the ALP’s decision to remove its prohibition on the development of new uranium mines.
The association executive director Michael Angwin said for the first time in 30 years, there is broad-based political support for the expansion of uranium exploration, mining and exports.
‘This will help build the confidence of the industry to invest and grow,’ Angwin said.
ABN Amro’s Edney said the ALP’s policy change saw support for uranium stocks with projects in the Northern Territory during today’s trading session.
He said stocks to benefit included Deep Yellow Ltd, which has a deposit in The Northern Territory, Nova Energy Ltd, which has uranium interests in South Australia, Western Australia and The Northern Territory and PepinNini Minerals Ltd which has deposits in South Australia.
China’s Sinosteel Corp Ltd is acquiring a 60 pct interest in PepinNini’s uranium assets.
Edney said uranium stocks have the potential to be re-rated following the ALP’s ending its no new mines policy.
‘As their Canada peers are trading on higher (net present value) multiples to those companies with deposits in South Australia and the territory are likely to trade more in line with those,’ Edney said.
‘Overall, it provides a bit more confidence that if you have a deposit there’s more chance of it being turned into a mine.’
At 3.00 pm here Deep Yellow was trading up 0.045 aud or 7.09 pct at 0.68, Nova Energy was up 0.20 or 5.13 pct at 4.10 and PepinNini was up 0.14 or 5.28 pct at 2.79.
(1 usd = 1.21 aud)
bruce.hextall@xfn.com

SYDNEY (XFN-ASIA) – Qantas Airways Ltd said it has signed an agreement with the Vietnamese government to purchase a 30 pct stake in Pacific Airlines, Vietnam’s second largest carrier.
Australia’s flag carrier said the stake is expected to be finalized within the next few months.
Qantas chief financial executive Peter Gregg said the investment will support his airline’s budget carrier Jetstar’s growth strategy and enable an extension further into Southeast Asia.
‘Vietnam offers great growth potential for aviation. It has a large and growing domestic market and is increasingly popular as a tourist destination,’ he said.
Gregg said Qantas will work with Pacific Airlines to develop a new business plan for the carrier, which currently operates a fleet of Boeing 737-400 aircraft on domestic routes in Vietnam and international services between Vietnam and Taiwan.
‘Pacific Airlines’ strategy is to reposition itself as a low cost carrier and expand its operation both within Vietnam and internationally,’ he said.
‘We will be actively involved in the ongoing management of the company through board representation and key management appointments,’ Gregg added.