12/14/2011 07:13 EST | Updated 02/13/2012 05:12 EST

Saskatchewan MP's bill would allow foreign ownership of uranium mines

OTTAWA - A Saskatchewan MP has introduced a bill in Parliament that would, if passed, allow foreign companies to purchase and own Canadian uranium mines.

"Lifting foreign ownership limits on uranium mines will not pose a national security threat nor risk Canada’s non-proliferation commitments," Brad Trost, who represents Saskatoon-Humboldt, said Wednesday.

"Uranium will remain a highly regulated commodity; licences will still be required to mine and export it."

Current regulations cap foreign ownership of uranium mines at 49 per cent.

Trost said foreign investment in uranium mining is focused in northern Saskatchewan, but ore deposits have also been identified in Nunavut, Northern Ontario and northern Quebec.

The Conservative government said in its throne speech in March 2010 that it wanted to "ensure that unnecessary regulation does not inhibit the growth of Canada’s uranium mining industry by unduly restricting foreign investment," Trost pointed out.

The commitment was repeated in its throne speech in June, he added.

Saskatchewan is currently the largest uranium-producing region in the world and accounts for about 30 per cent of annual world uranium production.

There are currently three uranium mining operations in the province: Eagle Point, McArthur River and McClean Lake, according to Saskatchewan Ministry of Energy's website.

Trost, a former exploration geophysicist, also told the House that the current and past Saskatchewan governments support changing the foreign ownership rules because it would increase jobs in the province.

It's the second time Trost has tried to get the bill passed — his first attempt was in 2009. The bill is set to receive second reading when the House resumes sitting in the new year.

It's not the first time there's been talk of opening up the uranium mining sector.

The federal government's Competition Policy Review Panel was mandated to review Canada's competition and foreign investment policies. In a June 2008 report, the panel recommended liberalizing foreign ownership in the uranium mining sector.

The report said the action is tied to the objective of Canada moving up the value chain from mining and first-stage processing by securing greater rights in nuclear fuel production through international negotiation.

The issue came to forefront in 2010 when Ottawa rejected Australian mining giant BHP Billiton's hostile takeover bid for Saskatoon-based fertilizer producer PotashCorp (TSX:POT) — a deal that would have been the biggest takeover in Canadian history.

Saskatchewan Premier Brad Wall opposed the bid partly on the basis that Canada's strategic interests would be put at risk if it sold most of its potash industry to an international company.

But Wall has said he would support a foreign company owning 100 per cent of a uranium mine, arguing that the situation would be different than the potash deal.

The premier has also stressed that uranium giant Cameco (TSX:CCO), which is also based in Saskatoon, would not be up for grabs even if the ownership rules are changed.

Cameco was created in 1988 by the merger of two Crown corporations — Saskatchewan Mining Development Corporation and the federal Eldorado Nuclear Limited. Cameco's website says it accounts for about 16 per cent of the world's uranium production.

(CJME, The Canadian Press)