By Melissa Pistilli-Exclusive to Uranium Investing News

Canadian-based Mega Uranium [TSX:MGA] is pulling ahead of its competitors in the race to become Western Australia’s (WA) first operating uranium mine.

Vying for the title is BHP Billiton Ltd. whose Yeelirrie project is located in the midwest region of WA, near Wiluna. BHP has said it expects to begin mining at Yeelirrie in 2014; however, Mega is confident it can commence production on the Lake Maitland project in late 2011.

Mega is out-stepping BHP with the signing of a US$ 49 million joint venture agreement with Japan Australia Uranium Resources Development (JAURD).

The signing of the agreement, which will be overseen by Federal Resources Minister Martin Ferguson, will be the start of a lengthy approvals process that Mega executive VP of project development Peter McNally believes will take two years to complete.

Some in the industry might see this timeline as a bit over eager, but McNally points out that because the mineralization occurs “right at surface,” the project can be made mining-ready quite quickly. McNally also expects the mining lease application to be approved in October.

“The contenders have separated from the pretenders,” said Edward Rigg, managing director at Argonaut, a Perth-based investment house.

“In my personal view, Mega’s Lake Maitland project will be the first uranium project in operation in WA,” added Rigg. He also believes Mega will likely list on the Australian Stock Exchange soon.

Just last November, WA lifted its six-year ban on uranium mining. However, the delay in bringing uranium mines into operation has already cost the state, according to Rigg.

He is advocating for a quicker approval process to dissuade buyers from turning to other markets. “Since 2008, Asian utilities have spent $1.3 billion buying interests in uranium projects in Australia – that’s a tremendous amount of spending,” said Rigg. But, that buying interest might pass over WA if it lags in bringing mines into operation, he warns. With about 10 per cent of global known uranium reserves, WA is in a position to become a top uranium producing province.

Mines and Petroleum Minister Norman Moore also is betting on Mega reaching the finish line first and believes the Lake Maitland project “will further develop the resources sector.”

Moore also shared his enthusiasm over the involvement of Japanese companies in the Lake Maitland project. “The large investment from these companies, one a collective of Japanese electricity providers and the other the world’s second biggest uranium trading house, indicates that uranium is highly prized worldwide,” he said.

Mega’s partners are also excited about the project’s potential. JUARD president Kazuo Sakai has said he has “high expectation of abundant uranium in our project so that we can contribute to the global environment issue.”

Under the agreement, JUARD and Itochu Corporation will gain a 35 per cent stake in the project along with a secure supply of uranium for Japanese utilities companies.

“JAURD’s shareholders – power companies Kansai, Kyushu and Shikoku, will have access to uranium produced at Lake Maitland and Itochu will participate in uranium off-take arrangements,” said Mega CEO Sheldon Inwentas. The three power companies, Kansai, Kyushu and Shikoku own six nuclear power plants in Japan with a combined capacity of over 17,000 megawatts.

The Japanese government is reportedly encouraging its companies to invest in the Australian uranium mining industry as the nation aggressively seeks to secure nuclear fuel supplies.

“Japanese policy is to encourage private companies to invest and acquire interests in uranium mines,” said Hideo Morimoto, from Japan’s Ministry of Economy, Trade and Industry, who attended the signing ceremony in Perth. “The Australian and Western Australian governments have opened up uranium mining and are welcoming new investment.”

Currently, Japan has 53 commercial nuclear power plants operating with a total capacity of 48.1 gigawatts. According to Morimoto, the nation is looking to produce 40 per cent of its power from nuclear energy by 2020. Three more plants are now under construction with 12 more reactors expected to be built in the near future.

Ryuzo Saito, CEO of Itochu, one is optimistic about his company’s involvement in the Lake Maitland project and its implications for Japan’s energy security. “It is our sincere desire that our involvement in this uranium project will contribute to our national energy security by ensuring the stable supply of uranium into Japan,” he said.