Chinese swoop on Rössing
A Chinese state firm has shown interest in acquiring the majority stake in Namibia’s Rössing uranium mine.
CATHERINE SASMAN
State firm China National Nuclear Corporation (CNNC) is said to be in pole position to acquire the majority shareholding in Rössing Uranium Mine, which would see the Asian country further cementing its hold on Namibia’s uranium stocks.
Energy Intelligence (EI) reports that the Rio Tinto Group is in advanced talks with CNNC to buy its majority stake in Rössing.
Such an acquisition would mean “complete Chinese control” of Namibia’s uranium production, with China General Nuclear Power Company (CGNPC) already mining for uranium at the adjacent Husab mine.
David Outhwaite, Rio Tinto’s principal advisor on media relations, said yesterday afternoon that the group of companies “does not comment on market rumour or speculation”.
According to its 2017 annual report, Rio Tinto plans to exit the nuclear power sector by 2025. Notwithstanding such plans, it is reported that Rössing has planned phase 4 – to extend mining to 2032 – as well as phase 5 to extend the lifespan of the mine to beyond that time.
Even though plans are afoot to wind up production, the mine produces 3% of the world’s uranium output.
The current shareholders of Rössing Uranium are the Rio Tinto Group (owning 68.6% shares); the Namibian government (3%); the Iran Foreign Investment Company (IFIC) with 15% and described as a “passive legacy investor” since the 1970s; the Industrial Development Corporation of South Africa (10%); and a combined 3% held by individual shareholders.
Rio Tinto’s shareholding entitles it to 35.57% of the total voting rights; the non-controlling interests hold 64.43% in the voting rights but the Namibian government can veto votes – through its protective right - considered not in the interest of Namibia.
‘LOOKING FOR A BUYER’
The EI report indicates that Rössing has been looking for a buyer for some time now and that it is “likely to accept a very low purchase price” because its primary consideration is “less financial than reputational”.
Its reputation could reportedly suffer because the new owner would have to cull the workforce at Rössing and rehabilitate the mine after more than half a century of uranium mining.
CNNC in 2014 bought a 25% stake in Langer Heinrich for US$190 million, but in 2017 it stepped away from a proposed deal to buy the remaining 75% in the company that would have cost it US$583 million.
CNNC, like CGNPC, is a Chinese-state-owned entity. It states on its website that China has a “national nuclear strategy framework for scientific research and engineering, and a pattern of combining military and civilian applications”.
CGNPC co-owns the Husab mine alongside the China-Africa Development Fund (CAD Fund) and the Namibian government-owned Epangelo Mining.
EI reported that an acquisition of Rössing by CNNC might mean greater participation by the two mines should the Chinese government force greater “operational synergies”.
At the time of going to print the mines ministry had not responded to queries.
State firm China National Nuclear Corporation (CNNC) is said to be in pole position to acquire the majority shareholding in Rössing Uranium Mine, which would see the Asian country further cementing its hold on Namibia’s uranium stocks.
Energy Intelligence (EI) reports that the Rio Tinto Group is in advanced talks with CNNC to buy its majority stake in Rössing.
Such an acquisition would mean “complete Chinese control” of Namibia’s uranium production, with China General Nuclear Power Company (CGNPC) already mining for uranium at the adjacent Husab mine.
David Outhwaite, Rio Tinto’s principal advisor on media relations, said yesterday afternoon that the group of companies “does not comment on market rumour or speculation”.
According to its 2017 annual report, Rio Tinto plans to exit the nuclear power sector by 2025. Notwithstanding such plans, it is reported that Rössing has planned phase 4 – to extend mining to 2032 – as well as phase 5 to extend the lifespan of the mine to beyond that time.
Even though plans are afoot to wind up production, the mine produces 3% of the world’s uranium output.
The current shareholders of Rössing Uranium are the Rio Tinto Group (owning 68.6% shares); the Namibian government (3%); the Iran Foreign Investment Company (IFIC) with 15% and described as a “passive legacy investor” since the 1970s; the Industrial Development Corporation of South Africa (10%); and a combined 3% held by individual shareholders.
Rio Tinto’s shareholding entitles it to 35.57% of the total voting rights; the non-controlling interests hold 64.43% in the voting rights but the Namibian government can veto votes – through its protective right - considered not in the interest of Namibia.
‘LOOKING FOR A BUYER’
The EI report indicates that Rössing has been looking for a buyer for some time now and that it is “likely to accept a very low purchase price” because its primary consideration is “less financial than reputational”.
Its reputation could reportedly suffer because the new owner would have to cull the workforce at Rössing and rehabilitate the mine after more than half a century of uranium mining.
CNNC in 2014 bought a 25% stake in Langer Heinrich for US$190 million, but in 2017 it stepped away from a proposed deal to buy the remaining 75% in the company that would have cost it US$583 million.
CNNC, like CGNPC, is a Chinese-state-owned entity. It states on its website that China has a “national nuclear strategy framework for scientific research and engineering, and a pattern of combining military and civilian applications”.
CGNPC co-owns the Husab mine alongside the China-Africa Development Fund (CAD Fund) and the Namibian government-owned Epangelo Mining.
EI reported that an acquisition of Rössing by CNNC might mean greater participation by the two mines should the Chinese government force greater “operational synergies”.
At the time of going to print the mines ministry had not responded to queries.
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