Why did the Paladin Energy share price just crash 22%?

This uranium share is having a day to forget on Tuesday.

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The Paladin Energy Ltd (ASX: PDN) share price is crashing deep into the red on Tuesday.

The uranium developer's shares fell as much as 22.5% to 51.5 cents before they were ultimately paused from trade while fetching 53.5 cents.

Why is the Paladin Energy share price crashing?

Investors have been hitting the sell button amid reports that the Namibian government is planning to take minority stakes in mining companies operating in the southern African country.

Paladin Energy's Langer Heinrich Mine is based in Namibia. The company describes it as a proven tier one asset in the global nuclear fuel energy cycle.

It is situated in the country's Namib Desert, 80km east of the major Walvis Bay seaport, placing it within a significant uranium region. While the operation is out of action currently, it is on a pathway back to production, which management believes places it to take advantage in an improved uranium market.

Though, it looks like the government may be wanting a piece of the action according to Bloomberg. The report quotes Namibian Mines and Energy Minister Tom Alweendo, who said:

We are making a case that local ownership must start with the state, which holds ownership of our natural resources. The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay."

This follows recent developments in Chile, which saw its government announce plans to take a slice of lithium miners operating in the country.

Once again, this demonstrates why investing in low risk mining jurisdictions like Australia can be so much more attractive. Just ask AVZ Minerals Ltd (ASX: AVZ), which is fighting to keep hold of a large portion of its lithium mine in the Democratic Republic of the Congo.

Paladin Energy has yet to comment on the news but an announcement is forthcoming.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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