Hungary's government is looking at a possible relaunch of uranium production near the Southern city of Pecs, state news agency MTI reported Tuesday citing the city's mayor.

The government has started a social, technological and environmental inquiry into the feasibility of restarting production, Zsolt Pava said at a press conference in Pecs.

The restart idea reemerged due to a rise in the price of uranium, state secretary responsible for climate and energy, Pal Kovacs said at the event.

Should the inquiry find that production can be made in an environmentally friendly, profitable manner, the government will consider restarting mining operations, Mr. Kovacs said.

Government-owned Mecsek-Oko and Mecsekerc signed a cooperation agreement with Australia's Wildhorse Energy (WHE.AU) earlier this year to exploit the area.

Uranium mining in the region halted in 1997 after low prices made production unprofitable.

Write to Marton Eder at marton.eder@dowjones.com

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