Uranium company fights Quebec moratorium

23 April 2013

A company that has invested CAD120 million ($117 million) in a Quebec uranium project has launched legal action in response to a moratorium on uranium exploration and mining imposed by the provincial government.

Strateco Resources has served Quebec's minister of sustainable development, environment, wildlife and parks Yves-Francois Blanchet with a notice for damages and interest set at an initial CAD16 million (US$15.6 million), which it says represents the loss in its market capitalisation since the announcement earlier this month that no permits for uranium exploration or mining would be issued in Quebec until an independent study into its environmental impact had been completed.

Further, the company's legal counsel has informed Blanchet that the company holds him "liable for damages caused by his misconduct up until this time" and has "given instructions" for the start of legal proceedings to obtain "compensatory and punitive damages."

The province of Quebec has at least 40,000 tonnes of indicated or inferred uranium deposits including Strateco's Matoush, with indicated resources of 5600 tU at 0.81% uranium and inferred resources of 6320 tU at 0.375%. In October 2012, the Canadian Nuclear Safety Commission (CNSC) granted Strateco a licence for advanced exploration activities at the project in northern Quebec, including the excavation of an exploration ramp and construction of surface facilities. However, various groups continued to push for a moratorium on uranium exploration and mining in Quebec.

The ongoing debate prompted CNSC president Michael Binder to publicly decry the lack of scientific basis behind the proposed moratorium, but despite Binder's outspoken comments Blanchet subsequently declared that no exploration or exploitation of uranium would be allowed in the province until the completion of studies by the provincial environmental assessment agency (Bureau d'audiences publiques sur l'environnement du Québec, BAPE) including public hearings. The studies are expected to begin this year, with a final report and recommendations presented to the government in 2014.

Strateco says that the moratorium has left it in a position where it would be unlikely to be able to maintain its facilities at Matoush or cover the associated costs of keeping the project in a viable state while it awaits a court ruling. It has therefore also requested that the Quebec Superior Court grants it a safeguard order and compels the government to pay it a monthly sum to cover the shortfall between the company's available cash and the sums required to cover basic costs to sustain the Matoush project.

Strateco has also amended a writ for mandamus, a legal filing in which it had originally asked the Quebec Superior Court to order the minister to make a decision on the issuance of permits, to ask the court to order the issuance of permits.

Strateco president and CEO Guy Hébert described the government's position as contrary to environmental legislation and said that the company was therefore asking the court to exercise their discretionary powers and order the government to authorise the project. "The government is taking part in an illegal decision," he said.

In seeking legal redress, Strateco is mirroring the actions of several US companies who are seeking to overturn the withdrawal of federal lands from uranium mining around the Grand Canyon.

Researched and written
by World Nuclear News