Czechs should boost uranium mining-draft paper

* New sites potentially much richer than current one

* Future uranium prices seen higher

* Reccomendation comes as Czechs eye nuclear expansion

By Roman Gazdik

PRAGUE, Dec 12 (Reuters) - The Czech Republic should expand uranium mining to boost energy security and capitalize on likely future price rises for the material used to make nuclear fuel, an industry ministry policy document showed on Monday.

Once one of the world's top ten uranium producers, the Central European country of 10.5 million significantly cut production at its mines after the collapse of the Communist regime in 1989.

The Czech Republic's only active mine at Rozna in the eastern part of the country is scheduled to close down as soon as 2014. It has potential reserves of more than 1,000 tons.

The ministry's draft commodity strategy obtained by Reuters recommends extending mining at Rozna and exploring other sites, including potentially much richer locations in the north-west of the European Union nation.

Currently, the only operating uranium mine of similar size in the European Union is in Romania.

"The Czech Republic must consider opening some of the more promising sites to be able to provide long-term feedstock for nuclear power, which is an absolutely fundamental part of the Czech energy portfolio," the draft said.

"It is desirable in terms of energy security to have the plans for the completion of the Temelin and Dukovany nuclear power plants... supported by exploting a domestic source of uranium."

Industry ministry officials estimated the total retrievable reserves at 56,000 tonnes in the Czech Republic, which currently produces around 250 tonnes of uranium annually and represents half a percent of the global total.

Kazakhstan, Canada and Australia are the world's top producers while the Czechs rank at number 14, according to World Nuclear Association.

The draft recommendation comes as the Czech Republic has riled neighboring Germany and Austria with its nuclear expansion plans in the wake of Japan's Fukushima disaster.

Toshiba Corp unit Westinghouse, France's Areva and an alliance of Russia's Atomstroyexport and Czech company Skoda JS are bidding to build the new reactors for state-owned utility CEZ.

This makes it critical to have an affordable supply of nuclear fuel, Czech officals said in their draft paper, predicting that prices for the commodity will rise in the mid-term as more nation expand their nuclear fleets.

"It is realistic to expect fluctuations in the global uranium market, especially with regard to the large shift to the use of nuclear energy," they said. "This is particularly evident in many former developing countries, whether they operate nuclear power plants or are preparing to." (Reporting by Roman Gazdik; editing by Michael Kahn and Keiron henderson)