CANADIAN group Uranium One have pointed to economic challenges as a key factor behind the closure of their sole Australian project in South Australia’s far north-east, announced late last week.

Speaking with ABC News late last week, senior vice-president Kuzma Otto said commodity prices and high production costs had played significant roles in the decision to move the Honeymoon uranium mine into care and maintenance.

“The sentiment is not positive towards uranium now in the short-term but we believe that in the medium- to long-term it will improve,” he said.

Mineral resources and energy shadow minister Martin Hamilton-Smith said added pressures were founded in regulation costs.

“The mining industry in South Australia is under pressure from Labor’s high taxes, ‘buggered’ WorkCover system, red and green tape, and poor labour productivity,” he said.

“As a result of Labor’s failure, investment and productivity in mining has plummeted.

“Mineral exploration expenditure halved in the past twelve months falling from $90 million to $44.6 million in the June quarter.”

The decision will see staff levels fall from 100 to 10 at the site, which has been in production since 2008.