korea preparing to bid for a stake in ext, page-29

Marketplace News
05.02.10
Koreans keen on Rssing South


A CONSORTIUM of Korean companies led by Korea Electric Power Corp (Kepco) is preparing to bid for a stake in Extract Resources Rssing South, with the potential to become the second biggest uranium mine in the world within the next five years, the Dow Jones Newswires reported yesterday.
The agency based the report on two people familiar with the matter.
State-run utility Kepco, Korea Hydro and Nuclear Power Co, and Korea Resources Corp are looking to take a stake of around 15 per cent in Rssing South, one of the persons said.
According to the Dow Jones Newswires, the consortium is working to submit the bid by a deadline of March 18, and the outcome is likely to be known a few months later.
The source, who preferred to remain anonymous, didnt disclose the likely value of the Korean consortiums offer.
Another person confirmed Kepco and Korea Resources Corp are in talks over a possible joint bid, but membership of the consortium hasnt been finalised.
The person didnt mention a possible involvement by Korea Hydro & Nuclear Power Co. Extract, based in Western Australia, appointed the Australian unit of Rothschild in May last year to undertake a strategic review of its options for the development of the Rssing South deposit. In November, Extract said it had received extensive interest from a number of parties seeking to participate in the projects development, but hadnt ruled out developing the project by itself. It wanted potential bidders to state how they could help bring a mine into production quickly and efficiently.
Extract says Rssing South - located six kilometres south of Rio Tinto Rssing Uranium mine has the potential to produce 15 million pounds of uranium oxide a year. That would make it the worlds second-largest uranium mine.
Rio Tinto owns nearly 15 per cent of Extract and analysts think it is also likely to be in talks over potentially partnering in the development of Rssing South, especially if there is scope for sharing infrastructure at the Rssing Uranium mine. David Wood, director of Rothschild Australia Ltd., didnt disclose any identities of potential bidders when contacted by Dow Jones Newswires, but said large groups were among those that had approached Extract in past months about a partnership.
He confirmed parties were working toward a milestone in mid-March, adding Extracts management was open-minded about whether a miner or a uranium consumer would make the best partner if it opted to sell down part of its interest.
The Dow Jones Newswires also quoted Extract Resources Chairman Steve Galloway at the Mining Indaba in Cape Town, saying has been approached by a number of institutions asking to participate in the funding of its planned Rssing South mine.
Extracts wholly-owned subsidiary Swakop Uranium plans to have the mine in production by the end of 2013. It can be ramped up to full production within 18 months after that, Swakop Uranium Chief Executive Officer Norman Green told The Namibian recently.
Namibia is currently the fourth biggest uranium producer in the world. it plans to be the third biggest by 2015.
Concerns about climate change have thrust nuclear power, which relies on uranium as a fuel, back into the spotlight as a potential source of emissions-free energy. Asian countries like China plan to accelerate programs to build reactors and European nations like Sweden are ending moratoriums on new nuclear plants.
In contrast to some renewable energy sources, nuclear technology is already commercial.
Supporters say plants dont require huge amounts of land compared to wind farms or biofuels plantations, and that safety continues to improve.
South Korea and Japan - Asias current nuclear heavyweights - are planning additional plants, and many countries, including Vietnam, Thailand, and Indonesia, want to join the nuclear club.
China and South Korea have also said they plan to establish strategic stockpiles of uranium. The growing demand for feedstock has combined with diminishing secondary supplies of uranium from sources like decommissioned nuclear weapons to put pressure on existing and new mines to bridge the gap.
South Koreas government has set a series of targets to secure the uranium needed for nuclear power plants.
It wants the countrys uranium self-sufficiency ratio to rise to 25 per cent by 2016 and to 50 per cent by 2030 from 6,7 per cent in 2010 through the acquisition of overseas mines. In December, Kepco signed a deal with Frances state-controlled nuclear group Areva SA to partner in the operating company of the Imoureran uranium mine in Niger.
That agreement gave Kepco the right to offtake ten per cent of the production of the mine for the duration of its operations, with the uranium used exclusively in South Korean nuclear power plants.
South Korea is also exporting nuclear power technology. A Kepco-led consortium received a US$20,4 billion contract in December to build four nuclear power plants in the United Arab Emirates.
The Ministry of Knowledge Economy said in mid-January it is targeting overseas contracts for ten nuclear power plants by 2012 and 80 plants by 2030.
This would make it the worlds third-largest exporter of nuclear power plants and account for 20 per cent of new nuclear power construction projects globally by 2030, the ministry said.
Own Report and Dow Jones
Newswires


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