Here's the latest update from Bloomberg (my bold).........
Korea Electric May Bid for Stake in Extract Resources (UPDATE 3 )
March 19, 2010, 3:52 AM EDT
(Adds Korea Electrics comment in eighth paragraph.)
By Shinhye Kang
March 19 (Bloomberg) -- Korea Electric Power Corp. and state-run Korea Resources Corp. may make a joint bid for a stake in Extract Resources Ltd., an Australian explorer that owns a uranium mine in Namibia, to obtain supplies of the nuclear fuel.
Were interested in the Rossing South mine in Namibia owned by Extract, Chang Joo Ok, vice president of Korea Electric Power and head of its overseas energy development team, said in an interview in Seoul yesterday. But pricing is the most important factor.
Extract Resources rose 14 percent in Sydney today after surging more than six-fold last year as investors bet more countries will embrace nuclear power. South Korea plans to add eight atomic plants by 2016 and export 80 reactors by 2030. Korea Electric emerged as a rival to General Electric Co. and Areva SA after beating them in December to a $20 billion order to build reactors in the United Arab Emirates.
Namibia is politically stable and would be a good target, said Park Young Ho, head of Africa and Middle East research at Korea Institute for International Economic Policy, a government think tank. Most attractive mines in Africa are already owned by major global companies, and it would be risky for a South Korean company to enter the market by itself. The stake purchase would be one of the safe options.
Extract Resources, 15 percent-owned by Rio Tinto Group, continues to evaluate potential partners to join its Namibian project, Chairman Steve Galloway said in an e-mail today, when asked to comment on the possible joint bid.
The South Korean group hasnt decided whether to bid for a stake in the Rossing South mine or Extract Resources itself, a Korea Resources official familiar with the plan said, declining to be named because internal discussions are still ongoing. Cho Hye Won, a spokeswoman at Korea Resources, declined to comment.
Stakes in Mines
Perth-based Extract Resources advanced the most since Dec. 23, 2008, to close at A$8.35. Korea Electric fell 0.3 percent to 38,550 won in Seoul, compared with the 0.7 percent gain in the benchmark Kospi index.
Korea Electric was chosen by Extract Resources as one of its preferred bidders last month after the utility made a non- binding offer for a stake in the uranium explorer, Chang said.
The South Korean companies will make a binding offer after conducting due diligence on the Rossing South deposit and getting approval at the end of this month from an internal investment review committee, according to Chang.
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