Monday, November 26, 2018

Rio Tinto: Rössing Uranium Has Sold Its Entire Stake To China

Rio Tinto sells its stake in Rössing Uranium to Chinese miner up for $106.5 million.
The Global miner Rio Tinto says it sold its entire stake in Rössing Uranium to China National Uranium Corporation for up to $106.5m. The sale of the 68.62% stake in Rössing Uranium, which owns the Rössing mine in Namibia, ends a period of extensive strategic assessment, the miner said in a statement on Monday. “The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focusing on our core assets,” Rio Tinto CEO Jean-Sébastien Jacques said. The deal is subject to certain conditions, including approval by the Namibian Competition Commission. The Rössing Uranium mine is located 12 kilometres from the town of Arandis, 70km inland from the coastal town of Swakopmund in Namibia's Erongo region. 

Rossing Uranium Mine
Rössing Uranium opencast mine near Arandis in Namibia:Rio Tinto
Under a binding agreement Rio Tinto announced today, the total consideration comprises an initial cash payment of USD6.5 million, payable at completion, and a contingent payment of up to USD100 million following completion linked to uranium spot prices and Rössing's net income during the next seven calendar years. Its chief executive, J-S Jacques, said Rio Tinto was focused on strengthening its portfolio and focusing on its core assets. "Rio Tinto has a long history in Namibia and I would like to thank the many people across Rio Tinto and the communities in which we operate who have contributed to the success of Rössing. I wish them continued success under new ownership. Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing," he said. Rössing, the world's longest-running opencast uranium mine, has been in operation since 1976. It has a nameplate capacity of 4500 tonnes U3O8 per year. Its 2017 production was 4,652,000 pounds U3O8 (1789 tU) of which Rio Tinto's share was 3,192,000 pounds. By the end of last year, the mine had supplied a total of 132,610 tonnes U3O8 to the world.

Rio Tinto is the majority owner of Rössing Uranium Limited. The Namibian government has a 3% shareholding but, the government has a ''big say'' in terms of decision making and voting rights. The Iranian Foreign Investment Company (IFIC) is a passive legacy investor in Rössing Uranium, holding a 15% stake that goes back to the early 1970s in the financing of the mine. The Industrial Development Corporation of South Africa (Shiva Uranium) owns 10%, while local individual shareholders own a combined 3%. The Chinese company China National Nuclear Corporation (CNNC) that owns the Geology & Mining Department has 25 %  stake in Namibia's Langer Heinrich uranium mine, currently under care-and-maintenance. Subject to conditions, including merger approval from the Namibian Competition Commission, the transaction is expected to be completed in the first half of next year.


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