Uranium not so hot with Labrador Inuit

The week ended April 12, the 15th trading week of 2008, was punctuated by a setback for uranium explorers in Canada, as the Labrador Inuit government banned uranium mining for three years on the Labrador Inuit Lands portion of the Central Mineral Belt.

• The move is largely symbolic, as even the most advanced uranium exploration project there — Aurora Energy Resources’ Michelin discovery — is many years away from any mine development. However, it does amply show the unease that even the thought of uranium mining generates in the minds of ordinary folk, and lays out another way for local activists to stop or slow mine development.

In pushing forward with its three-year moratorium, the Nunatsiavut government explained that, while it will work with any uranium explorers within its jurisdiction, it doesn’t yet have the ability to judge the impact of a large-scale development. It hopes to have the tools to do that by the time the moratorium expires.

•With Inco and Falconbridge disappearing so easily into foreigners’ hands, apparently there is a limit to what assets Canadians are willing to sell to strangers. This week the federal government stepped in to block the $1.3-billion purchase by Alliant Techsystems of Edina, Minn., of the space business of Canada’s MacDonald Dettwiler and Associates.

The two prizes that MDA offers are the Radarsat 2 remote-sensing satellite that allows for monitoring of Canada’s Arctic, and the iconic Canadarm robotic limb used on the International Space Station and the space shuttle.

Alliant still has a month to come up with new arguments as to how the proposed acquisition would provide a “net benefit” to Canadians. However, the deal looks dead, since it would invariably weaken the federal government’s ability to exert sovereignty over vast stretches of the Arctic that are being contested by the Americans, among others.

This will be the first foreign takeover rejected by the federal government since the Investment Canada Act was adopted in 1989.

• In exploration, TSX-listed Aussie junior Centamin Egypt has boosted the measured and indicated resource at its technically impressive Sukari gold project in Egypt by 9%, to 8.1 million oz. gold. Using a 0.5-gram gold cutoff, there are now 172 million measured and indicated tonnes grading 1.69 grams gold per tonne, plus 63 million inferred tonnes grading 1.7 grams gold, for another 3.5 million contained ounces gold.

Total drilling at Sukari now exceeds 325,000 metres in 1,350 holes.

• Bob Friedland’s Ivanhoe Mines unveiled a surprise $217- million sale of its 42% stake in China-focused subsidiary Jinshan Gold Mines, to Chinese gold mining giant China National Gold Group. While Ivanhoe will direct some of the funds to gold and copper ventures in China, much of the cash will undoubtedly be eaten up by its flagship Oyu Tolgoi copper-gold project in Mongolia, where Ivanhoe and partner Rio Tinto are burning through US$30-40 million per month as they await final project approval from the government.

• GFMS released its global supply and demand figures for the gold industry, noting that global mine production in 2007 declined by 0.4% year-on-year. All regions except for Asia recorded declines, with Africa registering the greatest drop of 932,000 oz. gold. Total cash costs soared 25% from 2006 levels, though average global cash margins actually rose to US$300 per oz. gold due to the rising gold price.

• Showing that it’s more difficult for an energy-intensive miner to profit from the commodities boom, U. S. aluminum giant Alcoa kicked off earnings season by announcing its first-quarter profits were more than halved to US$303 million as revenues slipped half a billion to US$7.4 billion. Alcoa blamed surging energy cost, a weaker greenback and softening aluminum demand from its top industrial customers, even though aluminum prices stayed near all-time highs around US$2,800 per tonne.

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