Exclusive: Spain rejects Berkeley uranium mine in confidential report

The Retortillo spa is seen near the site of a planned open-cast uranium mine by Australian mining company Berkeley Energia outside the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

MADRID (Reuters) - Spanish authorities have rejected granting a building permit to Berkeley Energia <BKY.AX> to open the European Union's only open-cast uranium mine near Salamanca, a confidential report seen by Reuters showed.

A failure to move ahead with the mine would be a blow for the Australian mining company, which is listed in Britain, Spain and Australia and operates no other projects.

Graffiti is seen on a road sign at the entrance to the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkeley Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

The 12-page report, issued on July 16, is non binding but it makes it politically difficult for the small northwestern village of Retortillo, where the mine is projected to open, to issue the permit.

If the municipality was to disregard the report, it may also pave the way for lawsuits.

Local authorities told Retortillo in the report that the permit sought by Berkeley did not meet legal requirements because the company did not own all the land needed for the project, which also lacked key technical information and had to be first authorised by the central Spanish government.

A sign in favour of a planned open-cast uranium mine by Australian mining company Berkeley Energia which reads "Yes to the Mine, to Jobs, to the Future" is seen in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

It was not clear when the report was shared with Berkeley or the municipality since being issued three months ago. Berkeley's Chief Executive Paul Atherley declined to comment on the timing on a call with Reuters.

He reiterated that there were "two outstanding items" that needed to be resolved before Retortillo could give its permission, and that the company had already responded to these.

"We look forward to a response from the CSN (Spanish nuclear authority) and the government on the claims that have been made that they are going to deny the permits for the mine," he said.

Eugenia Gonzalez wears a pin that reads "Stop Uranium" outside her house near the site of a planned open-cast uranium mine by Australian mining company Berkeley Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

Berkeley also said this week that the timing of the licence award remained uncertain, was outside of the company's control and it was unlikely to be received imminently.

Two sources familiar with the matter had told Reuters on Tuesday the Spanish government had decided not to deliver the permits necessary to open the mine. Berkeley shares fell nearly 29 percent before they were suspended from trading. [L8N1WX1DM]

The price of uranium, used in nuclear power generation, fell heavily following Japan's Fukushima disaster of 2011 and has struggled to recover, but prices have rallied this year.

A Berkely sign is seen near the planned site of an open-cast uranium mine by Australian mining company Berkely Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

One Asia-based investor in Berkeley who declined to be named said: "Permit risk on this project has been something that the company has always been upfront about to shareholders."

"Until such time as we hear official confirmation from quoted government sources, we view this as an opportunity to add to our positions to benefit the bull market developing in clean base load power supply."

A sign reading "Danger Explosive Materials" is seen near the site of a planned open-cast uranium mine by Australian mining company Berkely Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

(Reporting by Belen Carreno, additional reporting by Melanie Burton, writing by Julien Toyer; Editing by Paul Day and Jane Merriman)

Graffiti is seen on a road sign at the entrance to the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkely Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

A cyclist passes by a building with graffiti reading "Funeral Homes Now, Mine on the Way" at the entrance to the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkely Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

A sign in favor of a planned open-cast uranium mine by Australian mining company Berkely Energia which reads "Yes to the Mine, to Jobs, to the Future" is seen in a field in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

An abandoned building with graffiti referring radioactivity is seen at the entrance to the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkely Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

Crosses left by anti-mine supporters that used to read "No to the mine, yes to life" are seen near the site of a planned open-cast uranium mine by Australian mining company Berkeley Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

Raquel Romo, 44, a member of the "Stop Uranium" group, poses near a sign that reads "Stop Uranium. No to the mine, yes to life" outside her parent's house near the site of a planned open-cast uranium mine by Australian mining company Berkeley Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

A dog wanders in the empty streets of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkeley Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

A man takes a walk in the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkeley Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

The offices of Australian mining company Berkeley Energia are seen near a planned open-cast uranium mine in Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera

Graffiti that reads "No to the mine, go away" is seen next to a "No trespassing" sign near a site of a planned open-cast uranium mine by Australian mining company Berkeley Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

An empty playground is seen in the village of Retortillo, site of a planned open-cast uranium mine by Australian mining company Berkeley Energia, near Salamanca, in Retortillo, Spain, October 17, 2018. REUTERS/Susana Vera

An area that has been cleared of trees is seen at the site of a planned open-cast uranium mine by Australian mining company Berkeley Energia in the village of Retortillo, near Salamanca, Spain, October 17, 2018. REUTERS/Susana Vera