October 17, 2018 / 4:35 PM / a month ago

EXCLUSIVE-Spain rejects Berkeley uranium mine in confidential report

(Adds statement from company, investor)

By Belén Carreño

MADRID, Oct 17 (Reuters) - Spanish authorities have rejected granting a building permit to Berkeley Energia to open the European Union’s only open-cast uranium mine near Salamanca, a confidential report seen by Reuters showed.

A failure to move ahead with the mine would be a blow for the Australian mining company, which is listed in Britain, Spain and Australia and operates no other projects.

The 12-page report, issued on July 16, is non binding but it makes it politically difficult for the small northwestern village of Retortillo, where the mine is projected to open, to issue the permit.

If the municipality was to disregard the report, it may also pave the way for lawsuits.

Local authorities told Retortillo in the report that the permit sought by Berkeley did not meet legal requirements because the company did not own all the land needed for the project, which also lacked key technical information and had to be first authorised by the central Spanish government.

It was not clear when the report was shared with Berkeley or the municipality since being issued three months ago. Berkeley’s Chief Executive Paul Atherley declined to comment on the timing on a call with Reuters.

He reiterated that there were “two outstanding items” that needed to be resolved before Retortillo could give its permission, and that the company had already responded to these.

“We look forward to a response from the CSN (Spanish nuclear authority) and the government on the claims that have been made that they are going to deny the permits for the mine,” he said.

Berkeley also said this week that the timing of the licence award remained uncertain, was outside of the company’s control and it was unlikely to be received imminently.

Two sources familiar with the matter had told Reuters on Tuesday the Spanish government had decided not to deliver the permits necessary to open the mine. Berkeley shares fell nearly 29 percent before they were suspended from trading.

The price of uranium, used in nuclear power generation, fell heavily following Japan’s Fukushima disaster of 2011 and has struggled to recover, but prices have rallied this year.

One Asia-based investor in Berkeley who declined to be named said: “Permit risk on this project has been something that the company has always been upfront about to shareholders.”

“Until such time as we hear official confirmation from quoted government sources, we view this as an opportunity to add to our positions to benefit the bull market developing in clean base load power supply.” (Reporting by Belen Carreno, additional reporting by Melanie Burton, writing by Julien Toyer Editing by Paul Day and Jane Merriman)

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