Mega uranium has suffered from a sell off this month from a high of $8.60 to as we write around $6.86.

There were always two barriers to be overcome in Australia, the first was the central government and the second was the State government. The opposition Labour Party have voted this weekend to over turn the three uranium mines rule that was preventing any further development, so that is one barrier removed. This should be interpreted as good news but as the final decision is now with each individual state there is a certain amount of negative sentiment creeping in, as for instance the state of Queensland has not been in favour of this relaxation.

We have always known that the state Premiers hold a lot of power and progress would not be without some difficulty so the current situation should come as no surprise.

This is what we wrote on 27 July in an article entitled “A place in the sun”

“I lived and worked in Queensland many moons ago, I also played football there for a team called Southport Warriors, and so I know a little about the Aussie psyche. My bet is that they won’t let politics get in the way of a good money spinning deal and when the go-ahead arrives for uranium mining to commence, there will be some frantic action for those mining companies who already have a place in the sun”

Queensland has to decide whether or not go with go the party line or continue to oppose uranium mining. The coal miners in Queensland could play a big part in the considerations that the Premier will take into account.

However, our bet is still that they will allow uranium mining and that this current sell off will be short lived making the cheaper prices for these stocks even more attractive as an investment.