uranium policy back on the agenda in australia.

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    (Thanks Scarva)

    Feature Story
    Date: May 12, 2005

    Uranium Policy Back On The Agenda In Australia.

    By Our Man In Oz

    After almost 30 years locked in a dark room a tiny speck of light can be seen shining under the door of Australia’s moribund uranium industry. Holding the torch is Paul Holloway, one of the country’s most senior politicians, and a man normally considered to be a class enemy of the mining sector. As Resources Minister in the government of South Australia, Holloway has previously walked the straight line painted by his left-of-centre Labor Party, with one of the key elements being a strict “three mines” policy which has meant no new uranium mines - a stance which he is now publicly questioning and calling for a change.

    Just what that change might be, or whether Holloway and his sympathetic boss, the SA Premier, Mike Rann, can sway the national council of the Labor party are two big questions yet to be answered. But, the simple fact that the call has been made, at a time when uranium is being shoved back to centre-stage in the debate about energy policy and the global environment, is an extremely interesting development.

    Not many people in Australia have yet noticed the comments by Holloway at a resources conference in Adelaide. In fact, it takes a degree of “tea leaf” reading to interpret precisely what he meant when answering a question by saying that he “agrees that national labor policy on uranium needs changing”. On its own that comment is insufficient reason to rush out and buy Australian-focussed uranium shares. A dampening factor is that Holloway did not include his remark in the formal text of his speech but delivered it during the Q&A part of his presentation.

    However, a closer look at what’s happening in SA, home to the world’s biggest uranium mine at Olympic Dam, reveals a pattern, particularly as Holloway is now the third minister in SA to question an official, and near-sacred policy, of his own party. The others are the Treasurer (finance minister), Kevin Foley, and in a less open way, Rann himself. Foley has been the most outspoken because he wants the revenue from new uranium mines. He said in early March that “I for one in the Labor Party would like nothing more than the three mines policy to be scrapped. The sooner we can find it, and dig it up, and get it out of the country the better” - there speaks a man with money on his mind.

    Rann has been more cautious, but appears to be leaning towards a push for a policy shift. He told the SA Parliament in March that “there is absolutely no doubt that there will need to be a review of federal labor party policy at the next national conference”. Whether that means Rann will put his weight behind his finance and resources ministers is not quite clear, but at least he is talking about it and is a man in the top 10 of the labor party structure.

    On the market there are signs of a slow increase in confidence that the Australian uranium logjam might break. Traders are closely watching anything emitting a whiff of uranium, though the preference remains for locally-listed stocks with assets outside the country. That reflects a view that it is still far more likely that companies such as Paladin Resources will be in production with projects in Namibia and Malawi long before anything happens on the ground in Australia - as shown in Monday’s A14 cent (13.5 per cent) jump in the Paladin price to A$1.17.

    But a look down the list of purely Australian uranium is starting to show revived interest. The newly-listed Curnamona Energy (ex Havilah Resources) added A2 cents (7 per cent) to A30 cents on Monday, and has traded as high as A38 cents since listing just two weeks ago. Cazaly Resources is another interesting measure of a changing sentiment. On Wednesday of last week (May 4) it reported the lodging of tenement applications for uranium exploration in the Gascoyne region of Western Australia, a state which does not yet echo SA’s changing mood. On that day the stock jumped from A28 cents to A32 cents. It has since slipped backwards to around A27 cents, but the May 4 reaction was interesting - and perhaps a pointer to investors reacting to the light under the uranium door.

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