Canada is the world's largest uranium producer, accounting for about 22% of world output in 2009.
Non-Resident Ownership Policy on the Uranium Sector sets out the current federal government policy on non-resident ownership of uranium mining sector. Pursuant to this policy, foreign ownership of uranium mining projects in Canada is effectively capped at 49%. There are two exemptions to the limit for foreign ownership and they are granted when it is clearly established (i) that the project is ‘Canadian-controlled’ as defined under the Investment Canada Act (“ICA”) or (ii) that Canadian partners cannot be found.
Pursuant to s.26(1) of the ICA, “a Canadiancontrolled entity” is defined as “where one Canadian or two or more members of a voting group who are Canadians own a majority of the voting interests of an entity” or “the entity is not controlled in fact through the ownership of its voting interest by one non-Canadian or by a voting group in which a member or members who are non-Canadians own one-half or more of those voting interests of the entity owned by the voting group”. Pursuant to s.26(6) of the ICA, where two persons own equally all of the voting shares of a corporation and at least one of them is a non-Canadian, the corporation is not a Canadiancontrolled entity.
Like the telecom sector, the government's move to liberalize uranium mining sector comes after the Competition Policy Review Panel recommendation in 2008 to liberalize non-resident ownership on uranium mining, subject to new national security legislation; and securing market access benefits for Canadian participation in uranium resource development outside of Canada, or access to processing technology. The liberalization of ownership on Canadian uranium for Korean investors appear inevitable since Korea already has liberalized its policy with respect to foreign ownership of Korean uranium mining sector. We also note that Canadian TSX-V listed company, Oriental Minerals Inc., presently has uranium mining interests in Korea.
Along with liberalizing the uranium sector, the government said that it would “untangle the daunting maze of regulations that needlessly complicates project approvals” in Canada's broad resource sector. The plan is to replace them with “simpler, clearer processes” that would provide “improved environmental protection” and greater certainty to industry.
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