UPDATE 1-Canada says no decision yet on revising uranium policy

Fri Dec 2, 2011 8:02pm GMT

Quotes

   

* Resource minister says reviewing policy, but no decisions

* Foreign miners, Chinese companies want policy change

* Rio Tinto in takeover deal with Canadian uranium explorer

(Adds background)

By Julie Gordon

TORONTO, Dec 2 (Reuters) - Canada is reviewing a policy that restricts foreign ownership of uranium mines, but there has been no decision on revising those rules at this time, Natural Resources Minister Joe Oliver said on Friday.

Canada is the world's second largest producer of uranium and home to the highest grade uranium mines in the world.

"We've been looking at it, but I can't say that there's been any decision on it at this point," Oliver told a Reuters editorial board in Toronto.

Foreign ownership of operating uranium mines in Canada is currently restricted to 49 percent under federal policy.

The policy does not effect exploration stage projects.

"I know there's an interest on the part of foreign companies in seeing it change, and that includes companies in China," Oliver said. "But that's the policy at the current time."

The foreign ownership restrictions could end up being an issue for Anglo-Australian miner Rio Tinto (RIO.AX), which is in the midst of a C$654 million ($643 million) takeover of Canada's Hathor Exploration HAT.TO. [nN1E7AL0GJ]

Hathor owns numerous exploration projects and is developing the Roughrider deposit in the uranium-rich Athabasca region of Western Canada.

Under current policy, Rio will have to find a domestic partner before it can start producing uranium from Roughrider, or any other Canadian project.

Analysts believe that Rio, one of the largest mining company in the world, plans to use Hathor as a foothold to gain access to more projects in the Athabasca basin. That would add to the pressure on the Conservative government to revise ownership restrictions.

China is also a factor, as the resource hungry nation looks for uranium to fuel the dozens of nuclear reactors it plans to build over the next decade.

Currently, Canadian uranium production is dominated by Canada's Cameco Corp (CCO.TO), while France's Areva (AREVA.PA) holds stakes in numerous projects in the region.

Last year, the government indicated it was reviewing its policy to ensure that unnecessary regulation would not inhibit growth by "unduly" restricting foreign ownership.

But, in October, Oliver said there was no appetite at that time to move forward with changes to foreign ownership rules.

($1=$1.02 Canadian)

(Additional reporting by David Ljunggren and Jeffrey Jones; editing by Peter Galloway and Rob Wilson)

((julie.gordon@thomsonreuters.com)(+1 416 941 8136)(Reuters Messaging: julie.gordon.reuters.com@reuters.net)) Keywords: CANADA MINISTER/MINING

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