RIO Tinto believes it makes sense for both takeover target...

RIO Tinto believes it makes sense for both takeover target Extract Resource’s massive Husab mine and its Rossing mine in Namibia to be developed in tandem.

There has been speculation that Extract has also been linked to talks with Rio over Husab.

Rio owns a 14% stake in Extract, with its Rossing uranium operation neighbouring the Husab property.

However, Rio Tinto energy chief executive officer Doug Ritchie went some way to answering the rumours after telling reporters at the Mining Indaba conference developing the projects simultaneously made sense and it had been in talks for some time.

“It physically makes sense and financially obviously there would be benefits in not duplicating,” Ritchie told Bloomberg.

“You don’t end up with two uranium mines with processing facilities sitting next door to one another.”

In the meantime, China’s Taurus Mineral recently reached 89.5% ownership of Extract’s largest shareholder Kalahari Minerals, triggering a $A2.2 billion bid for the Australian company.

Extract managing director and CEO Jonathan Leslie refused to be drawn into comment on the proposed downstream offer at the conference.

“They have announced they are obliged to make a bid for Extract by the first of March and for obvious reasons I won’t be talking anymore about this,” Leslie said.

He said Husab would go onstream at the right time with the supply gap emerging in the uranium sector when the project came into production.

“There is no question that new supply is needed to meet demand,” he said.

“Husab is well positioned to meet that demand. If Husab was in production today, it would be the second largest uranium mine in the world.

“There is an experienced team that is ready to press the go button.

“In terms of timing Husab is forecast to come into production at a time the uranium supply gap is due to widen.”