Energy, Toro Rise as State Uranium Mining Ban May End

By Jason Scott

Sept. 8 (Bloomberg) -- Energy & Minerals Australia Ltd. and Toro Energy Ltd. led gains by uranium explorers in Western Australia on optimism the Liberal Party may win government after the weekend's state election and allow mining of the nuclear fuel.

Energy & Minerals, a Perth-based company, rose 41 percent to 49.5 cents at the 4:10 p.m. Sydney time close on the Australian stock exchange. Paladin Energy Ltd. closed 8.6 percent higher, while Toro surged 23 percent.

The Liberals may form a coalition with the National Party, prompting an end to the ban on uranium mining, said David Black, professor emeritus in history and politics at Perth's Curtin University of Technology. Neither the incumbent, anti-uranium Labor Party nor the Liberals have won enough seats to form a majority government. Vote counting continues today.

``Toro and Energy & Minerals are going very well today because of the way the election result looks to be heading,'' Macquarie Group Ltd. resources analyst Len Eldridge said in Perth. ``Should the Liberals get in, it would be positive from a mining and exploration point of view.''

Western Australia has as much as 10 percent of the world's known uranium reserves, worth about A$40 billion ($33 billion), according to an estimate from the federal government last year. While Australia has almost 40 percent of the world's known low- cost uranium reserves, it supplies less than a quarter from three mines in South Australia state and the Northern Territory.

BHP, Uranex

BHP Billiton Ltd.'s Yeelirrie resource and Toro's Lake Way/Centipede project are probably the most advanced in the state, while Uranex NL and Energy & Minerals have earlier-stage projects, according to analyst John Wilson at Sydney-based Resource Capital Research Pty.

Australia is the world's second-largest uranium producer. The nation's federal ruling Labor Party last year dropped its 27-year- old ban on new uranium mines, while allowing state governments to retain the power to reject mining proposals. Queensland and Western Australia ban uranium mining.

Western Australian Liberal leader Colin Barnett said Sept. 4 he would support uranium mining and lift the ban should he win the election.

Cameco Corp., based in Saskatoon, Canada, in July agreed to buy a majority stake in the Kintyre exploration project in Western Australia from Rio Tinto Group for $346.5 million.

Mega Uranium Ltd., another Canadian mining company, said Carpenter's pledge to legislate against mining the metal may lead it to sell its entire Australian asset portfolio, the Australian newspaper reported Aug. 29. The Toronto-based company said it had been prepared to invest as much as A$200 million.

To contact the reporters on this story: Jason Scott in Perth at Jscott14@bloomberg.net;