The Namibian (Windhoek)

Namibia: Govt to Get More of Rössing

GOVERNMENT intends lapping up more shares in Rössing Uranium to boost its stake in the mine after the Kern Trust, part of the minority Namibian shareholders, decided to sell its interest.

Deputy Finance Minister Calle Schlettwein last night said he was aware of the "principle" of the proposed transaction, but that he couldn't say by how much the deal would up Government's shareholding in Rössing Uranium.

Government already owns 3,38 per cent of Rössing Uranium. The biggest shareholder is Rio Tinto with 68,6 per cent, followed by state-owned Iran Foreign Investment Company (IFIC) with 15 per cent and the Industrial Corporation of South Africa with 10 per cent.

The remaining shares - about 3 per cent - belong to Namibians related to the 13 individuals associated with the discovery of the uranium deposit.

Sources close to the deal said the Kern Trust wants N$38,34 a share, which means that Government will have to pay just over N$206 767 for the package of 5 393 shares it has been offered.

The trust intends to sell nearly 135 000 different class shares, for which it wants about N$5,2 million in total. Should the other shareholders in Rössing decline their offers, Government will be able to buy their shares too.

Although the Ministry of Mines and Energy didn't make allowance for the N$206 767 in its current budget, sources said that Cabinet has given Mines and Energy Minister Isak Katali the green light to take the money out of his Minerals Development Fund.

"Government has the desire to increase its shareholding in Rössing Uranium on a pro rata basis," a source said.

"Nuclear fuel minerals are regarded as strategic minerals for Namibia and it is therefore imperative for Government to raise its pro rata shareholding in the company."

Besides strategic importance, a bigger stake in Rössing will also boost Government coffers in dividends once Rössing manages to turn its ill fortune of the past years around.

From 2007 to 2009 alone, Rössing paid Government more than N$23 million in dividends. Financial woes stopped the company from declaring dividends recently. Last year, Rössing Uranium suffered a net loss of N$471 million.

Government also has its eye on Iran's controversial 15 per cent share in Rössing Uranium. Foreign Affairs Minister Utoni Nujoma led a high-ranking delegation to Tehran in December to discuss Rössing Uranium's full compliance with the United Nations sanctions against companies in which IFIC has shares.

Katali told The Namibian earlier this year shed more light on the proposal, indicating that Government "is willing to take over the Iranian shares but we can only do it if they agree to it".

In terms of the proposed agreement the Namibian Government, if Iran agrees, will take over in trust all future acquisitions and or investments in Rössing Uranium for the duration of UN Security Council sanctions.

Uranium is classified as a strategic mineral in Namibia, which means that state-owned Epangelo Mining Company holds the exclusive exploration and mining rights.

Epangelo recently missed out on its chance to get a stake in Bannerman Resources' Etango uranium project. Bannerman agreed that Epangelo could buy 5 per cent in Etango, provided it came up with about N$32 million. In addition, the company said Epangelo could buy another 5 per cent once Government granted Bannerman Mining Resources Namibia (BMRN), a subsidiary of Bannerman Resources, a mining licence.

Bannerman said the deal was off as "the parties have been unable to complete a mutually acceptable agreement reflecting the commercial substance of the term sheet".

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