Greenland lift for uranium junior

A small Australian company has benefited from Greenland’s decision to relax its hardline stance against uranium mining.

Shares in ASX-listed junior Greenland Minerals and Energy soared by close to 10 per cent on Monday, after the Greenland government last week eased its opposition to the uranium sector.

After decades of ‘‘zero tolerance’’ towards uranium mining, the government narrowly voted to allow some mining in a bid to boost its economy.

Despite the decision being closely fought and the company still needing to apply for licences before any mining begins, the local market responded warmly to the policy change by lifting the stock by 3¢ to 35¢.

The rise continues a rally that began at 27¢ before the policy change being announced on Friday morning Australian time.

The stock is now testing its highest share price for the year, which was set in February.

While much of Greenland is above the Arctic circle, the company’s flagship Kvanefjeld project is just below the circle in the south of Greenland.

Company managing director Roderick McIllree welcomed the move and said he now hoped to push ahead with environmental and social approvals and ultimately a mining licence application.

‘‘The company now looks forward to continuing discussions on the Kvanefjeld project with Greenland stakeholders and regulators in order to finalise the development strategy of what is emerging as a world-class mining opportunity in Greenland,’’ he said.

The ASX-listed company is not the only mining aspirant in Greenland, with miners from the UK and China also eyeing a share of the nation’s mineral wealth.

The change of stance in Greenland is a rare bright spot for the uranium industry, which remains in the doldrums more than 30 months after the Fukushima nuclear crisis destroyed investor confidence in uranium.

Despite many predicting the sector would see some improvement in 2013, the spot price for uranium fell even further to about $US34 a pound in July and August.

The spot price has improved marginally in recent weeks to be fetching about $US35.25 a pound on Monday.

The continuing weakness in the uranium price has kept other local uranium stocks such as ERA, Toro Energy and Paladin Energy under pressure. Paladin has particularly struggled as low uranium prices have undermined its revenue streams and its attempts to sell a stake in its flagship Langer Heinrich mine in Namibia.

The predicament has some Paladin shareholders agitating for leadership change ahead of the company’s annual meeting in Perth in November.

Meanwhile, Toro’s attempts to lure major investors to help it develop Australia’s next uranium mine at Wiluna in WA have been made harder by the low uranium price.