Czech government rejects Uran proposal

Uranium explorer Uran Ltd went into a trading halt today after press reports that the Czech government had rejected its proposal to acquire and expand the Rozna uranium mine.

The Rozna proposal was part of Uran's strategy of building its uranium mining interests in eastern Europe.

The company formally submitted a proposal earlier this week to acquire an interest in Rozna, which is the only operating uranium mine in Europe.

The Czech Industry and Trade Ministry was reported as rejecting the proposal, saying the country could do the job on its own.

State-owned enterprise Diamo now gets 300 tonnes of uranium per year from the Rozna mine, which has reserves in place until about 2012 and may have more, subject to exploration.

"The offer by Uran Limited is interesting, but we will secure mining and exploration of deposits with our own forces," Industry and Trade Minister Martin Riman said in a statement.

"I had asked Diamo to prepare a document for the government, compiling the options of extending mining uranium and securing exploration work."

The ministry said Uran had offered 640 million crowns ($A37.58 million) for getting rights to mine on current and future stopes and a 50 per cent share of revenues from the mine.

It had also proposed a narrower option for half the price, it said.

Both Prime Minister Mirek Topolanek and Riman have said they are in favour of prolonging uranium extraction beyond the planned Rozna mine closure in 2008.

The final decision is up to the government, which is expected to discuss it by the middle of 2007.

The Czechs have been gradually closing down uranium deposits since the end of Communism in 1989 as world demand dropped.

But a rally in uranium prices in recent years has made the sector economically viable again, Diamo has said.