PRIME Minister Julia Gillard's backflip on uranium sales to India gave the ASX-listed uranium sector a much-needed lift early last week. But as BHP Billiton chief executive Marius Kloppers pointed out on Thursday, the proposed lifting of the ban on Australian uranium sales to India will not magically create a bigger market for the radioactive stuff that our producers and explorers can look to fill.

India's uranium needs are being met at present and its supply options have already expanded in recent times, with both the US and Canada having already jumped the gun on uranium sales to the world's second most populous nation.

 

BHP is looking to give the go-ahead next year to the first-stage expansion of its Olympic Dam copper/uranium/gold mine in South Australia. But again, Kloppers' point was ''there is no bigger market for us as a result of this''.

 

So, last week's rise in the ASX-listed uranium sector was misguided - until Friday, that is. On Friday, Rio Tinto, which has uranium mines at Ranger in the Northern Territory and in Namibia, made another serious bet that uranium prices would rise in the long term.

 

Rio upped its bid for Canadian uranium explorer Hathor Exploration, owner of the high-grade Roughrider uranium deposit, from $C4.15 a share to $C4.70 ($A4.55) a share after Canadian uranium heavyweight Cameco came back with a $C4.50-a-share offer, having started the bidding war in August with an opening offer of $C3.75 a share. Hathor closed on Friday at $C5.06 a share, which puts it at a 90 per cent premium to its August share price just before the initial bid from Cameco. So, the market is saying the battle is not necessarily over with Rio's latest offer.

 

Now, Roughrider is not the world's biggest uranium deposit. But it does have a fantastic grade. Even so, both Rio and Cameco are clearly demonstrating by their actions (Rio also recently pumped more than $340 million into its majority-controlled ERA, owner of Ranger) that they believe uranium prices will recover at some stage.

 

Uranium prices plunged by 30 per cent in response to Japan's Fukushima nuclear disaster in March, with subsequent safety closures in Japan and the adoption of an anti-nuclear stance by Germany reducing operating plants worldwide from 443 to an estimated 425 plants at one point.

 

Operating plant numbers have slowly been rebuilding, and expectations that the high-growth nuclear power plans of China and India remain intact has returned uranium prices to $US53.50 a pound.

 

The general consensus is that $US60 to $US65 a pound is achievable in the next two years. But the shoot-out between Rio and Cameco for Hathor's Roughrider would not be pinned on those sorts of numbers. Their longer-term expectation must be for something higher again, given the industry remains in supply deficit and is as vulnerable to supply disruptions as any other sector of the mining industry.

 

So, sentiment to the uranium sector is on the improve - which is just as well for those investors who were holding ASX-listed uranium producer sand explorers when the Fukushima disaster hit. The values of most are still 50 to 70 per cent below pe-Fukushima levels.

 

IT IS a source of amusement to many in the mining industry that economists would have you believe that the two-speed economy that the resources investment boom has created is a bad thing.

 

More often than not, a miner will point to an economic basket case like Greece and ask the question, is it not better to be ''suffering'' the distortions of a two-speed economy than having to deal with a no-speed economy?

 

The funny thing is that mining is one area that Greece can turn to in its effort to begin paying its way in the world.

 

After many years of frustrating miners with uncertainty on permitting new mines, the Greeks have all of a sudden got a whole lot more friendly. Canada's European Goldfields found that back in July when it secured

all-important environmental clearance for the development of both its Olympias (4.1 million ounces) and Skouries (3.9 million ounces) gold projects.

 

But today's interest is the plan of ASX-listed Glory Resources (ASX: GLY). It struck a deal with Tony Sage's Cape Lambert (ASX: CFE) to acquire the Sapes gold project in north-eastern Greece for $46.5 million in cash and shares back in August.

 

Cape Lambert picked up Sapes as part of its $135 million acquisition of the collapsed CopperCo back in June 2009. It's turned out to be a nice acquisition too, with Cape Lambert pulling in $250 million from selling off bits and pieces of the old firm.

 

Glory - which endeared itself to Sage by adopting a name that his Perth soccer club also goes by - is now raising a minimum of $42.5 million from the issue of 170 million shares at 25¢ each to fund the Sapes acquisition.

 

Its task goes a whole easier with the news that another Canadian company keen on Greece's gold potential, the $C10 billion Eldorado Gold, has put its hand up as a cornerstone investor for 19.9 per cent of Glory. Eldorado is waiting on environmental clearance for its Perama Hill project, 20 kilometres from Sapes.

 

Glory is hopeful it will secure the required permits for Sapes in time to meet a 2014 start-to-production target. Because of CopperCo's previous ownership, and that by other former notable Australian companies over the years, Sapes is well known in this market.

 

Its initial 510,000 recoverable ounces of gold at an average grade of 15 grams a tonne tells you that if it was anywhere but Greece, it would have been in production a long time ago. But, as noted earlier, Greece is no longer in a position where $100 million investments like that required to get Sapes into production can be left on the shelf.

 

Glory has been making its way as a platinum/copper/nickel explorer in Canada ahead of the Sapes deal.

 

The Canadian play is worth watching as a second phase of drilling is about to start at the Onion Lake tenements. But it is Sapes that is the near-term game-changer, with Glory to boast attractive resource/reserve/production multiples compared with other ASX-listed gold stocks - on Sapes being developed, that is.