chinese to bid for uranium in africa

An article out today re chinese keen to but uranium companys


Chinese to bid for uranium in African mines

Barry FitzGerald
May 5, 2011

CHINESE state-owned CGNPC Uranium has confirmed it still wants to bid for London-listed Kalahari Minerals, owner of a 43 per cent stake in ASX-listed Namibian uranium developer Extract Resources.

But the Chinese group wants to reduce its planned offer by 7 per cent to take account of the sharp fall in uranium equity values that followed the partial meltdown at the Fukushima nuclear power plant after the earthquake and tsunami that hit Japan on March 11.

The prospect that CGNPC will have to extend a ''downstream'' takeover offer to Extract caused a sharp rise in the company's recently battered share price. Its shares closed 95?, or 14.2 per cent, higher yesterday at $7.63.
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Extract has asked the Australian Securities and Investments Commission to make sure the downstream offer becomes a reality. But it has yet to hear back from the regulator.

CGNPC's planned new offer, pitched at a planned 270 pence-a-share offer against the original intention for a 290 pence a share, also needs Britain's Takeover Panel to overturn a decision by its executive that the lower price bid should not proceed.

Kalahari supports the lower bid and has agreed with the Chinese to extend to June 17 the date by which an announcement on a firm offer must be made, subject to a successful appeal to the Takeovers Panel.

Kalahari shares were trading around 230 pence before the Chinese said they still intended to bid. At stake is control of Extract's Husab uranium project in Namibia, potentially the world's third-biggest uranium mine.

Watching with more than a passing interest is Rio Tinto. It owns the ageing Rossing mine next to the Husab deposit, which will take $1.5 billion to develop.

Rio Tinto is also an 11.5 per cent shareholder in Kalahari and a 14.23 per cent Extract shareholder. Rio has shown recently it is prepared to commit big dollars to Africa despite political uncertainties on resource developments.

Rio recently paid $700 million to the Guinean government to smooth over disputed ownership rights to the Simandou project in the country. And it recently acquired Mozambique coal developer Riversdale Mining.