Paladin Energy, which owns a 75 percent stake in the mine, said Thursday that it had differed over a restructuring exercise with minority shareholder, CNNC Overseas Uranium Holdings Ltd (CNNC), which would have led to CNNC taking a majority stake.
Paladin had earlier this month announced a restructure proposal, and a potential option in favour of CNNC to acquire its majority interest in the mine.
Paladin Chief Executive Officer, Alexander Molyneux, said Thursday that the company had received notice from CNNC earlier this month, requesting that Paladin commence a process to determine the fair market value of Paladin’s share of Langer Heinrich.
Molyneux said the fair value determination process would be the first step for CNNC to acquire the majority stake.
He said Paladin has disputed the way CNNC wanted to exercise its option to increase its stake in Langer Heinrich.
The arbitration has been referred to the Singapore International Arbitration Centre.
Molyneux said CNNC’s failure to proceed with the acquisition of an additional 24 percent stake in the mine, when it was offered to them last year, and the Chinese firm’s repeated refusal to fund the working capital requirements, had put the interests of Paladin’s stakeholders at risk.
These include approximately 26,000 small shareholders, the approximately 1,000 employees, international financial institutions and sovereign-related entities.
If CNNC succeeds with its plan, this will mean that Chinese firms will own major stakes in two of the three uranium mines in production in Namibia.
Swakop Uranium, which owns the Husab Mine, is a subsidiary of CGNPC Uranium Resources Co, Ltd, while the Namibian Government-owned mining company, Epangelo, holds a 10 percent stake.
Rio Tinto owns the majority stake in Rössing Uranium, the country’s oldest uranium mine.