Aurora Energy has announced it is suspending uranium exploration in Labrador and is blaming lower commodity prices for the decision.
Ches Andersen, Aurora's vice-president of Labrador affairs, said since there's no mining underway, the parent company will mothball the Labrador operation.
"They were going to look at doing company-wide restructuring and part of that is looking at areas that are not generating revenue. We are an exploration company so obviously it's an easy one to cut," Andersen told Labrador Morning.
Andersen said a work camp and two small offices will remain open, with a few employees, but the head office in St. John's is closing.
He said exploration may start again if the price of uranium rebounds.
One active mine
Aurora's website says the company has identified a "significant resource" in the coastal Labrador region, and that it planned to carry out "continuous exploration" in order to development a mining operation.
Aurora is a member of the Paladin Energy Ltd. Group of Companies, based in Australia.
The website says the company has an active uranium mine in Namibia, and a second mine in Malawi that is currently on hold due to low prices.
Uranium is a fuel used in nuclear power plants.
Recent media reports have predicted a turnaround in the market for uranium, with prices rising by nearly 30 per cent in the past year.
One analyst, however, said the increase is more likely attributed to a correction from the lows for uranium reached in 2014.
Lifting of moratorium
The issue of uranium mining in Labrador has been a divisive one.
The Nunatsiavut government narrowly passed a controversial bill to put a moratorium on exploration in place in April 2008.
The decision to lift the moratorium was made unanimously late in 2011.
Aurora Energy once estimated that its Michelin project could create 700 construction jobs over a three-year period, and that a mine and milling operation could operate for about 17 years, employing 400 people.
The company identified a significant uranium deposit in 2006.