RPT-Czechs extend uranium mining as prices rise

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The Czech government agreed on Wednesday to extend uranium extraction at the country's sole mine, which had been due to close in 2008, as rising prices have swung state mining firm Diamo into profitability.

"The government has decided to prolong uranium mining indefinitely or for a time period over which it will be profitable and will do without state subsidies," Trade and Industry Minister Martin Riman told a news conference.

The Czechs have been gradually closing down uranium deposits since the end of Communism in 1989 as world demand dropped and the industry lost money.

However, the rally in uranium prices in recent years has made the sector economically viable again, according to the country's sole miner Diamo.

The government's plan calls for Diamo to report each year on the profitability of mining, officials have said.

Proceeds will be used for geological research, which could lead to expanding production after 2012, Industry and Trade Ministry spokesman Tomas Bartovsky said.

Diamo now ships 300 tonnes of uranium per year from its Rozna mine in Dolni Rozinka in the eastern Czech Republic.

The government only decided on the Dolni Rozinka mine on Wednesday, but the company mines an additional 40 tonnes per year as a result of an environmental clean-up at the Straz pod Ralskem mine.

Key customers are power firm CEZ and Germany's Urangesellschaft.

Diamo has also said that there were 115,000 tonnes of uranium at the northern Czech Hamr mine. That shares a deposit with Ralsko, which had been closed but could potentially be reopened if it gets the nod from politicians.

The deposit compares with the total of 110,000 tonnes of uranium mined in the country since 1945, including busy years when the Czechs supplied the Soviet Union.

Keywords: CZECH URANIUM/

[PRAGUE/Reuters/Finance.cz]