Govt gives its blessings to Chinese firm to acquire Rössing

31 May 2019 Author   NYASHA FRANCIS NYAUNGWA
Mines and Energy Minister, Tom Alweendo, said Tuesday that government has no objection to Rio Tinto’s sale of its stake in Rössing Uranium Mine to a Chinese company provided it respects Namibian regulations and laws.
Rio, which is seeking to divest less profitable assets, announced last November that it was selling its 69 percent stake in the world’s longest-running open pit uranium mine to China National Uranium Corporation (CNUC) for up to $106.5 million.
The deal is still expected to be completed in the first half of this year.
Asked whether the sale would be cleared, Alweendo told the Windhoek Observer that: “We have no objection to the sale provided that the buyer abides by what’s expected of him by our laws.”
Chinese companies already own stakes in several Namibian uranium mines or exploration companies including in Langer Heinrich Mine, which was placed under care and maintenance early last year, and Husab Mine, which is said to be the world’s biggest uranium mine at full production.
Addressing concerns among Namibians that China will bring in foreign nationals to replace local employees, CNUC Vice President, Li Youliang, told a public hearing last week that was not the case.
“There is no intention to replace local Namibian employees with foreign nationals solely as a result of this transaction,” Li told the hearing in the coastal town of Swakopmund.
“In fact, CNUC has a strong commitment to maintain the current level of local employees.”
Rio Tinto is selling its stake in Rössing to CNUC in a deal dependent on approval from the Namibian Competition Commission.
Government holds a three percent stake in Rössing and 51 percent of voting rights. The Iranian Foreign Investment Company also holds a legacy 15 percent stake that goes back to the original funding of the mine, which could have deterred some potential buyers.
The other shareholders are the Development Corporation of South Africa (10 percent) and individual shareholders (three percent).
China is targeting nuclear power as an alternative to fossil fuels.
Rössing has been operating since 1976 and has produced more uranium than any other mine. It employs around 1,000 workers and can carry on producing until 2025.
The sale agreement comprises an initial cash payment of $6.5 million, payable at completion, and a contingent payment of up to $100 million following completion.
The contingent payment is linked to uranium spot prices and Rössing’s net income during the next seven years.
While China is a big source of uranium demand, the market has languished as Western countries turn away from nuclear energy plants and trade tensions between the United States and China generally disrupt the commodities market. This email address is being protected from spambots. You need JavaScript enabled to view it.
 
 

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