Here's why the Berkeley (ASX:BKY) share price is tanking today

This comes after the clean energy company released an update earlier today.

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The Berkeley Energia Ltd (ASX: BKY) share price has tanked more than 50% in early trade.

Shares in the energy company have tumbled after the company released an announcement earlier today.

The Berkeley share price was down more than 50% after hitting an intra-day low of 31 cents. At the time of writing shares in Berkeley have recovered slightly, to be down around 41% for the day.

Lets take a look at what Berkeley announced and why investors are dumping shares in the company.

Berkeley share price tanks on Permitting Update

Earlier today, Berkeley released a permitting update regarding the company's proposed Salamanca uranium mine.

According to the release, the Spanish Nuclear Safety Council (NSC) issued an unfavourable report for the construction of the uranium concentrate plant as a radioactive facility, citing safety concerns.

Berkley expressed its disappointment in not receiving any official notification from the NSC. Instead, the company highlighted that the outcomes of the NSC board meeting were published on the regulator's website.

Berkeley commenced the application process for approval of the Salamanca mine in 2016. The company highlighted that more than 120 previous permits and favourable reports have been granted for the project.

In the release, Berkeley noted that the company intends to defend its position and will immediately consider a range of legal options available.

Berkeley highlighted that the NSC is the only pending approval required to commence full construction of the Salamanca mine.  

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Berkeley is a London-based, clean energy company that is listed on both the London and Australian Stock Exchange.

The company's main operations have been focused on starting production at its wholly-owned Salamanca uranium project in Spain.

As noted previously, Berkeley has submitted more than 120 permits to bring its Salamanca mine into production.

Today's permitting update was the last approval the company required to commence construction of the uranium concentrate plant and its classification as a radioactive facility.  

In 2016, a definitive feasibility study (DFS) showed that the Salamanca project had the potential for low-cost production. Production costs at Salamanca have been estimated at a total cash cost of US$15.06 per pound.

However, approval of Berkeley's Salamanca mine has been controversial in the region due to the harmful environmental impacts.

Motley Fool contributor Nikhil Gangaram 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 Bruce Jackson.

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