Rio Tinto, an Anglo-Australian multinational and one of the world’s largest metals and mining corporations, said it will sell its 69 percent stake in a Namibian uranium mine to China National Uranium Corp (CNUC) for up to $106.5 million.
China, which seeks to bolster supplies, is targeting nuclear power as an alternative to fossil fuels and already owns stakes in Namibian uranium production. The country was an obvious buyer of the shares in the Rossing mine- the world’s longest-running open pit uranium mine that has been operating since 1976, and has produced more uranium than any other mine.
An industry source told Reuters that private equity and China had shown interest in acquiring the mine. The Iranian Foreign Investment Company holds a legacy 15 percent stake that goes back to the original funding of the mine, which could have been a problem for some potential buyers.
The other shareholders are the Namibian government (3 percent), the Development Corporation of South Africa (10 percent) and individual shareholders (3 percent).
Jean-Sebastien Jacques, Rio Tinto’s Chief Executive revealed that the company will work with CNUC “to ensure a smooth transition and ongoing sustainable operation at Rossing”. Considering Rio Tinto’s exit from thermal coal in 2018, the current sale is also in line with the global miner’s disposal strategy. The company is also trying to sell some of its aluminium assets.
The transaction is subject to merger approval from the Namibian Competition Commission, with expected completion in the first half of 2019.