27 November 2018

Namibia: Chinese Buy Stake in Rössing Uranium Mine

Mining giant Rio Tinto this week announced that it has entered into a binding agreement with China National Uranium Corporation Limited (CNUC) for the sale of its entire 68.62 percent stake in Rössing Uranium Limited, owners of the Rössing mine in Namibia.

The total consideration comprises an initial cash payment of $6.5 million, payable at completion, and a contingent payment of up to $100 million following completion, according to a statement issued on Monday by Rio Tinto.

According to the statement the contingent payment is linked to uranium spot prices and Rössing's net income during the next seven calendar years.

In addition, Rio Tinto will receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion. The total consideration is subject to a maximum cap of $106.5 million.

Rio Tinto chief executive,Jean-Sebastien Jacques in the statement said Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing.

Meanwhile the transaction is subject to certain conditions precedent, including merger approval from the Namibian Competition Commission. Subject to these conditions being met, the transaction is expected to complete in the first half of 2019.

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