As some of the last posts are all talking about RIO,i wanted to...

As some of the last posts are all talking about RIO,i wanted to refresh your memory concerning Areva:



http://www.bloomberg.com/apps/news?pid=206...id=aeC1LzVKhlA8

"...Areva has a leg up on the competition," said Ben Elias, a New York-based analyst with Sterne Agee & Leach Inc. "They will help utilities run their nuclear plants," as the French company also supplies uranium and disposes of nuclear waste. "That's important for Chinese and Indian clients..."

"...The moves will help the company be a nuclear-energy "champion..."


This refers to the special Areva business-model:

They supply everthing for their customers,thus having an advantage over their competitors.(which proved to be very succesful in the past)
As they make most of their money from selling the reactors (and not the uranium,which is just a small fraction in the overall costs for building a reactor) they can afford (or maybe they are forced) to offer more money for uranium resources than pure mining companies are willing to spend.


http://www.reuters.com/article/rbssIndustr...B53939720090702

"...French state-owned nuclear reactor maker Areva could look at buying mining or renewable energy assets, its CEO Anne Lauvergeon said on France's Radio Classique on Thursday..."

"...Lauvergeon said she believed the group should remain open to acquisition opportunities that exist in the mining sector, as the group needs more uranium...."


As most of the uranium,which is currently produced by AREVA is already assigned to existing reactors,they are in desperate need for new resources.

And there is a big difference between RIO and Areva.

While for RIO uranium is just one of many commodities (and i guess by far not the most important one), for AREVA it is the one and only one that matters and thus essential for their business model.

As AREVA is 95 % owned by France,the country which depends to 80 % on nuclear energy (compared to the next countries beeing the USA,Germany and the UK with "only" 25 %) they have a strong backing from the french government and especially Nikolas Sarkozy.

You can see about the increasing interest from AREVA/France about Namibia here:

http://allafrica.com/stories/200907150971.html

And last but not least there is Dattels statement:

http://www.dowjones.de/site/2009/07/extrac...r-customer.html

"...Extract's investor relations manager, Richard Henning, said Polo has indicated it bought into Extract because it saw an opportunity to create some competitive tension between Rio and "another party".
Henning said Extract doesn't know the identity of the other party..."


Conclusion:

In my eyes Areva is the the likely bidder and may be willing to pay more than others.(or more accurately more than RIO)
As they already have contracts with the Chinese ( and as said before,they are probably not willing to form a JV with RIO right now) and the Indians,they probably can depend on either of them (or both?) for paying a certain percentage of any deal that is concluded in return for safe supply for years/decades to come.

And if the offer is high enough RIO may be willing to sell as well,as they are not an investment company,but a mining enterprise.