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In an effort to encourage new investments in uranium mining, the provincial government made changes to its uranium royalty structure earlier this year.
Tim McMillan, Minister Responsible for Energy and Resources, said the new royalty structure now recognizes actual costs incurred in development and mining.
“The old uranium royalty structure, which was put in place in 2001, presented a number of challenges,” said McMillan. “It was based on assumed costs and over the last 13 years we have seen the cost of construction far exceed assumptions that were put in the old model.”
The old royalty system had a very negative effect on mining in Saskatchewan. Over the years, many development and mine projects have been placed on hold because the structure would not recognize certain actual costs.
“We corrected that system, which was no longer reflecting the true costs of building a new mine or bringing new projects forward,” said McMillan.
With the new royalty incentives, these projects may now move to development. This means Saskatchewan will soon feel the positive impact of the economic spinoff and long-term employment that comes with growth in the mining sector.
McMillan believes that the new modernized royalty structure will allow Saskatchewan to once again be a leader in the uranium market.
“As of this year’s budget, we felt it was important for Saskatchewan to regain its competitive position on the world stage in uranium,” said McMillan. “We needed to make a change and modernize our system to encourage investment now and into the future.”
McMillan feels that Saskatchewan will definitely see growth and feels that the new royalty structure improves Saskatchewan’s competitiveness with other uranium producing countries.
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