LABOR has moved quickly to exploit Chief Minister Paul Henderson's decision to oppose a uranium mine near Alice Springs.

ALP Araluen candidate Adam Findlay said yesterday a vote for Labor was a vote against the Angela mine, 20km from the town.

"I've been receiving feedback very strongly while doorknocking the electorate that residents do not want a mine on their doorstep and I welcome this decision by the NT Government," he said.

The by-election was forced by the resignation of former CLP leader Jodeen Carney.

Backdown over Alice's uranium

CLP leader Terry Mills yesterday backed the Labor government's stand. The Territory Government has surrendered the right to allow new uranium mines to the Federal Government. But Canberra is highly unlikely to support the Pamela-Angela operation in defiance of the NT Government - whether Labor or CLP.

NT Chamber of Commerce head Chris Young said the decision would cost the Territory economy many jobs and hundreds of millions of dollars.

"The Government was supportive until now and we have difficulty understanding the sudden change of heart," he said.

Mr Young said business people were "cynical enough" to suspect the decision was a bid to win votes in the Araluen by-election. But Mr Henderson said Labor was an "enormous underdog" in the election and his decision had nothing to do with votes.

He said there was "overwhelming" opposition in Alice Springs to the mine. Mr Henderson said the opposition came from all sectors of the community - "not just the lefties".

The Chief Minister said a uranium mine so close to town would lead to a net loss through a drop in tourism. He also said "a significant number of people" would leave Alice.

"It's hard to get professional people to work in Alice Springs, particularly in health. "Health workers have chosen to come to Alice to improve indigenous health.

"They don't want to work in a mining town." Mr Henderson said a uranium mine would harm the town's image as the cultural heart of Australia. A survey earlier this year showed that a majority of Alice business people supported the mine. "And they still support it," Mr Young said.

He dismissed the argument that a uranium mine would harm tourism.

The Chamber of Commerce chief executive said tourists still went to Kakadu, despite Ranger uranium mine being inside the national park. He said the Government's decision sent a bad message to other potential resources investors.

Canadian mining company Cameco seems to have gone lukewarm on Angela. Regional manager Jennifer Parks said the site was mothballed in 1983.

"Some of the reasons for that are still valid today," she said. She said Angela was "fairly low-grade", not in the same league as Ranger and Nabarlek.

"We've still got to look at the economics of it." The Opposition's Matt Conlan said: "There is an overwhelming lack of goodwill in Alice Springs towards this project.

"I have been in constant communication with my electorate on this matter and believe there is no way the majority of Alice residents will support it."