Reuters SYDNEY - China Guangdong Nuclear Power Holding Corp...

Reuters

SYDNEY - China Guangdong Nuclear Power Holding Corp (CGNPC) is expected to extend Tuesday's deadline for its ?756 million ($US1.2 billion) takeover offer for uranium miner Kalahari Minerals as it seeks clarity over changes to mining laws in Namibia which may dampen appetite for a deal.

The state-owned Chinese firm has until late Tuesday afternoon London time to either formalise its bid, extend the offer, lower the offer or walk away.

Kalahari owns a 43 per cent stake in Extract Resources, which owns the Husab uranium project in Namibia, potentially the second-largest uranium mine in the world.

Kalahari said last week it was confident it would seal a deal but that was before media reports of possible policy changes by the Namibian government which hit Extract shares.

Extract's Australian-listed shares remained in a trading halt on Tuesday pending an announcement on CGNPC's bid for Kalahari.

Analysts and one source familiar with the transaction said extending the deadline made the most sense for CGNPC as there was uncertainty over media reports Namibia may assign mining and exploration rights to a state-owned company. The government plans to brief media on the matter later this week.

"We believe that CGNPC may take advantage of the uncertainty in Namibia to either lower its bid or extend the deadline," RBC Capital Markets analyst Adam Schatzker said.

The state-owned Chinese firm made its move on Kalahari last month - days before the Japanese earthquake and the Fukushima nuclear disaster - lured by access to one of the world's biggest uranium deposits at a time when major powers are scrambling for alternative sources of power.

Kalahari's shares, however, have been badly hit by uncertainty following Fukushima's troubles, and many investors are betting the price could be cut or the deal scrapped.

The original proposal was priced at 290p a share, representing a more than 25 per cent premium to the current market value. Kalahari shares last traded in London at 229p a share.

CGNPC and Kalahari were not immediately available to comment. Extract declined to comment on Tuesday.

Rio Tinto has an 11.5 per cent stake in Kalahari, with Japan's Itochu Corp owning 13.76 per cent. Rio also owns a 14.2 per cent stake in Extract.