Spanish regulatory changes unlikely to affect uranium mining plans

18 May 2021

Uranium mining company Berkeley Energia Limited noted on 14 May that, following a meeting of the full Parliament in Spain, an amendment was approved to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals (e.g. uranium). Under this amendment, no new applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would be accepted once the law entered into force. However, existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation. The new law will enter into force the day after its publication in the Official Spanish State Gazette.

Berkeley currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including a valid 30-year mining licence for the Salamanca mine. With more than 120 previously granted permits and favourable reports by the relevant authorities at the local, regional, federal and European Union levels, the Authorisation for Construction for the uranium concentrate plant as a radioactive facility ("NSC II") is the only pending approval required for Berkeley to begin full construction of the Salamanca mine. Berkeley said it is continuing to engage with the relevant authorities to advance the approvals process for the Salamanca mine.

The uranium project is being developed in an historic mining area in western Spain, about three hours west of Madrid. In July 2016, Berkeley published the results of the Feasibility Study that confirmed that the Salamanca project has one of the lowest production costs, with a high capacity to generate cash flow after the tax burden, at a time in the uranium cycle in the one at its lowest point. The project has a net present value of $531.9 million with an internal rate of return of 60% based on a discount rate of 8%.

The results of the final feasibility study show that, after the first 10 years, the project is capable of producing an average of 4.4 million pounds of uranium a year at direct costs of $13.30/lb. During production, it will have total cash costs of $15.06/lb average cost, which is a clear advantage over the current spot price of $20/lb and $41/lb for long-term contracts.

In August 2016, the first structural work began on the site. Work began on the diversion of the highway and improvement of the power line, prior to the start of the main constructions. After obtaining the necessary financing for the construction of the mine, in July 2018 the company entered the London stock market and the Madrid, Barcelona, Bilbao and Valencia parks, becoming the only mining company listed on the Spanish market. Berkely says that, when the project is in production it will create 450 direct jobs and up to 2,000 indirect jobs in a community hard hit by long-term unemployment. 

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