China poised for uranium monopoly
Chinese state-owned enterprises will dominate Namibia's uranium-mining sector if Rio Tinto's sale of the Rössing mine goes through.
With the anticipated acquisition of 68.62% shareholding in Rössing Uranium Limited by China National Uranium Corporation Limited (CNUC), Chinese state-owned companies will dominate Namibia's uranium-mining sector.
If this acquisition goes through, Chinese state-owned companies will own the majority shareholding in the biggest uranium mines in the country, which are the Husab mine, Rössing, Langer Heinrich and Trekkopje.
The China General Nuclear Power Corporation (CGN) and China-Africa Development Fund hold the majority shares in Husab. CNNC, of which CNUC is a subsidiary, holds 25% shares in Langer Heinrich.
The Erongo regional coordinator of the Mineworkers Union of Namibia (MUN), George Ampweya, yesterday said the union was shocked to hear about the planned acquisition, as the Rössing management had not engaged it at any point.
“This development was done in isolation. The company has continuously created the impression that the sale would not go through.
“We have only heard about this through the media. We do not know what ramifications there will be for the Rössing workers. We hope this will be a fair and equitable process; we hope it will be done in a professional manner,” Ampweya said.
He said the MUN's Arandis branch hoped to engage with the Rössing management regarding the future of the workers.
The minister of mines and energy, Tom Alweendo, had not responded to questions by the time of going to press.
The deal
CNUC is a subsidiary of the China National Nuclear Corporation (CNNC), a state-owned entity that has been in talks with Rio Tinto over the Rössing acquisition.
Rio Tinto yesterday announced that CNUC will buy its shares for US$106.5 million (about N$1.5 billion at the current exchange rate).
According to the announcement CNUC will pay an initial US$6.5 million (about N$90 million) in cash and a contingency payment of up to US$100 million (N$1.4 billion) after the sales agreement has been finalised.
The contingency payment is linked to uranium spot prices at Rössing's net income during the next seven years.
Rio Tinto will also receive a cash payment if CNUC sells the Zelda 20 Mineral deposit during a restricted period following completion.
The transaction is subject to certain conditions, including a merger approval by the Namibian Competition Commission.
Rio Tinto stated that subject to these conditions being met, the transaction was expected to be completed in the first half of 2019.
The competition commission had not responded to questions before going to press.
Rio Tinto's chief executive officer, Jean-Sébastian Jacques, said the sale followed an extensive period during which the company considered how to move forward and strengthen its core activities across the globe.
“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 the new ownership. Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing,” Jacques said.
CATHERINE SASMAN
If this acquisition goes through, Chinese state-owned companies will own the majority shareholding in the biggest uranium mines in the country, which are the Husab mine, Rössing, Langer Heinrich and Trekkopje.
The China General Nuclear Power Corporation (CGN) and China-Africa Development Fund hold the majority shares in Husab. CNNC, of which CNUC is a subsidiary, holds 25% shares in Langer Heinrich.
The Erongo regional coordinator of the Mineworkers Union of Namibia (MUN), George Ampweya, yesterday said the union was shocked to hear about the planned acquisition, as the Rössing management had not engaged it at any point.
“This development was done in isolation. The company has continuously created the impression that the sale would not go through.
“We have only heard about this through the media. We do not know what ramifications there will be for the Rössing workers. We hope this will be a fair and equitable process; we hope it will be done in a professional manner,” Ampweya said.
He said the MUN's Arandis branch hoped to engage with the Rössing management regarding the future of the workers.
The minister of mines and energy, Tom Alweendo, had not responded to questions by the time of going to press.
The deal
CNUC is a subsidiary of the China National Nuclear Corporation (CNNC), a state-owned entity that has been in talks with Rio Tinto over the Rössing acquisition.
Rio Tinto yesterday announced that CNUC will buy its shares for US$106.5 million (about N$1.5 billion at the current exchange rate).
According to the announcement CNUC will pay an initial US$6.5 million (about N$90 million) in cash and a contingency payment of up to US$100 million (N$1.4 billion) after the sales agreement has been finalised.
The contingency payment is linked to uranium spot prices at Rössing's net income during the next seven years.
Rio Tinto will also receive a cash payment if CNUC sells the Zelda 20 Mineral deposit during a restricted period following completion.
The transaction is subject to certain conditions, including a merger approval by the Namibian Competition Commission.
Rio Tinto stated that subject to these conditions being met, the transaction was expected to be completed in the first half of 2019.
The competition commission had not responded to questions before going to press.
Rio Tinto's chief executive officer, Jean-Sébastian Jacques, said the sale followed an extensive period during which the company considered how to move forward and strengthen its core activities across the globe.
“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 the new ownership. Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing,” Jacques said.
CATHERINE SASMAN
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