Bloomberg News

Canada Should End Most Uranium Ownership Curbs, Wall Says

March 26, 2013

Canada should eliminate foreign- ownership limits for uranium companies such as Cameco Corp. (CCO) except in cases where a state-owned company is the bidder, Saskatchewan Premier Brad Wall said.

“Let’s open it up for other companies around the world that want to expand here and create jobs,” Wall said in an interview yesterday at his office in the provincial capital of Regina.

The change would apply rules for the uranium industry similar to those laid out last year by Prime Minister Stephen Harper, when he said he would block most further foreign purchases of majority stakes in Canadian oil-sands producers by state-owned enterprises. That policy was announced after Harper approved Cnooc Ltd. (883)’s $15.1 billion takeover of Nexen Inc. (NXY) and Petroliam Nasional Bhd.’s C$5.2 billion ($5.1 billion) takeover of Progress Energy Resources Corp. Current rules limit most foreign ownership of uranium projects to minority stakes.

“Why not apply that Cnooc ruling on oil sands to uranium?” Wall said, adding that Harper has already worked to open up markets in China and India for the element used in nuclear power stations.

Cameco, the world’s third-biggest uranium producer, is based in Saskatoon, about 260 kilometers (160 miles) north of Regina. Wall cited London-based Rio Tinto Group (RIO) as a company that could benefit from relaxed foreign ownership rules, and said a budget his government presented last week had a plan to reduce royalties paid by the industry.

‘Net Benefit’

Canada’s foreign-ownership rules should keep the “net benefit test,” Wall said, despite criticism from opposition lawmakers that it’s too vague. The law allows policy makers to reject foreign purchases of Canadian firms if they don’t provide a net benefit to the country. Wall relied on that language to lead opposition to BHP Billiton Ltd. (BHP)’s $40 billion hostile takeover bid for Potash Corp. of Saskatchewan Inc., which was blocked in 2010.

“There is something enabling about being able to define what net benefit was for us, and we did,” Wall said.

Melbourne-based BHP Billiton remains “one of our best corporate citizens” after the Potash rejection, Wall said. The company moved its Canadian office to Saskatoon from Vancouver and is advancing work on its Jansen Lake potash mine in the province, Wall said.

“The Jansen Lake project is proceeding in earnest, they have been very open and honest to deal with,” he said.

France’s Areva FP (AREVA) has also made a good contribution to the province and for that reason should have its uranium investments exempted from any future restrictions on state-owned companies, Wall said.

“We would like to see Areva grandfathered in that, because they have been here a long time,” Wall said.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; Chris Wellisz at cwellisz@bloomberg.net


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