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re: next target now you can see why we didnt go up with the price of u.





By Angela Macdonald-Smith

Dec. 21 (Bloomberg) -- Australian uranium miners with advanced projects in South Australia and Queensland states will be best placed to benefit from a potential change in the Labor Party's ban on new uranium mines, ABN Amro Holding NV said.

South Australia's Premier Mike Rann supports the expansion of uranium mining, while Queensland Premier Peter Beattie has said he will abide by the decision due to be taken at the party's conference in April, ABN said in a Dec. 19 report.

Australia has about 38 percent of the world's known uranium reserves while accounting for only 23 percent of production, partly due to the policy of the Labor Party, which governs in all the nation's eight states and territories. Labor is in opposition at a federal level.

``We believe a change in policy would lead to a re-rating of the Australian uranium explorers and potentially to further consolidation of the sector,'' ABN said in the report. ``In our view, those explorers with advanced projects will be in the best position to benefit from a potential change in policy.''

Australia's state and territory governments limit uranium mining to three sites: Energy Resources of Australia Ltd.'s Ranger mine in the northern Territory; BHP Billiton's Olympic Dam mine and Heathgate Resources' Beverley mine, both in South Australia. Heathgate is owned by San Diego-based General Atomics.

SXR Uranium One Inc. was in September awarded a license by the South Australian government's environmental agency to commercially mine the Honeymoon deposit. The company, based in Toronto, said in August it decided to go ahead with the project.

PepinNini, Mega

PepinNini Minerals Ltd., based in Sydney, has a potential project in South Australia, while Canada's Mega Uranium Ltd. and Perth-based Summit Resources Ltd. are among companies with potential projects in Queensland, ABN said.

Labor's Environment Minister Peter Garrett opposes a change in the party's policy, while new Labor Leader Kevin Rudd has ``openly supported'' a change, ABN said. Western Australian Premier Alan Carpenter ``remains firmly opposed to uranium mining,'' it said.

The debate in the Labor Party comes after the release last month of an independent report for the federal government, carried out by former Telstra Corp. Chief Executive Ziggy Switkowski, that recommended Australia open more uranium mines and begin enrichment. Uranium is used to power plants that produce 16 percent of the world's electricity.

Uranium spot prices surged 9.9 percent to a record $72 a pound earlier this week after an auction of 260,000 pounds of the radioactive metal by a Texas producer. Uranium prices have soared this year on concern supplies will lag behind demand from nuclear power plants.

Price Gains

The price may rise to $90 a pound by mid-2007 and to $115 a pound by late 2008, Resource Capital Research, an equity research company, said last week. Some 251 new nuclear power reactors are under construction, proposed or planned worldwide, compared with 442 in operation, it said.

Resource Capital named Tournigan Gold Corp., Uranex NL, PepinNini, Berkeley Resources Ltd., WildHorse Energy Ltd., Energy Metals Ltd., Forsys Metals Corp. and Laramide Resources Ltd. as companies with advanced projects that could advance rapidly in 2007.