The Czech Republic turned down an offer by Uran Ltd., an Australian uranium explorer, to purchase a stake at the Rozna uranium mine, Europe's only operating mine for the material used as nuclear fuel.
Uran made two offers to participate in exploration and mining at Rozna, which is operated by state-owned mining company Diamo SP. The larger offer was for an investment of 640 million koruna ($29.7 million), which would have given the Australian company the rights for half of the profits at the mine, Czech Industry Minister Martin Riman said in an e-mailed press release.
Riman, who visited the mine today, said the company's involvement is not needed because the rising price of uranium means Diamo can make the necessary investments without a partner. Increasing global demand for uranium boosted prices more than 10- fold in past five years, partly as prices of gas and oil grew. That renewed investors' interest in mining of the commodity.
``The Uran offer is interesting but we will secure mining and exploration ourselves,'' Riman said. ``Because of growing prices, the mining of uranium is lucrative even without any state aid. Therefore Diamo will continue mining and exploration, with costs covered from existing returns.''
Demand for nuclear energy also increased as companies and governments work to cut emissions of carbon dioxide and curb imports of fossil fuels.
The price of uranium has doubled to $75 a pound in the past year.
Closure Reversed
The Czech mine, located in the south-east of the country, was scheduled to close in 2008, in line with a Czech government resolution. Riman said today he asked the company to prepare a document for the government on a possible continuation of mining and on exploration of new deposits. He said a detailed exploration of deposits located below the existing mine would cost 250 million koruna.
``The final decision on whether to continue in further mining and exploration will be left to the government,'' he said in the press release.
Diamo was seeking an investor to help explore new deposits at the Rozna site and already offered a participation to CEZ AS, the utility that operates Czech nuclear plants.
The Czech Republic has produced a total of 108,000 tons of the metal since beginning uranium mining in 1946, and has become the world's sixth largest producer, according to Diamo's Web site.
In 1989, the government started to phase out the industry. Diamo currently produces about 300 metric tons of uranium annually from the Rozna mine.
To contact the reporter on the story: Marek Miler in Prague at m.miler@bloomberg.net
source news : bloomberg.net
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