rossing sweats on extract's response

Rossing sweats on Extract's response - by Toivo Ndjebela

08 June 2010

WINDHOEK Namibia's leading uranium exporter, Rossing Uranium, is still keeping its fingers crossed in anticipation of a favourable answer on its proposal to Extract Resources to co-develop the Rssing South uranium deposit, currently owned by the Australian company.

Rossing's Manager for Corporate and External Affairs, Jerome Mutumba, told New Era upon inquiry that his company is still awaiting a response from Extract regarding the proposal by the Namibia-based company to link up with Extract to develop what is believed to be one of the country's largest uranium deposits.

This, despite media reports that Kalahari Minerals, which owns over 40 percent of Extract, has flatly dismissed any possibilities of joining forces with Rssing to develop the Rossing South deposit.

New Era understands that there have been no outright answers from either Extract or its parent company Kalahari, but mining giant Rio Tinto, which owns Rossing Uranium, is apparently still pushing for the deal to go through.

"We haven't got an answer for our proposals yet but we hope everything will eventually go through," Mutumba told New Era.

Rossing Uranium, the country's oldest uranium mine, whose projected lifespan stretches to 2016, is fast running out of quality grade uranium ore and is salivating at the possibility of a deal with Extract, which would help it export quality uranium and extend its lifespan.

It is against this background that Rio Tinto, on behalf of its Namibian subsidiary, made submissions to Extract for a possible joint venture, which would see uranium from Rossing South being transported seven kilometers to the Rossing Uranium plant for processing. In its submissions, Rio Tinto argued that a joint venture between Rossing Uranium and Extract on the Rossing South project would save the latter's capital expenditure on the project.

Kalahari Minerals executive chairman Mark Hohnen was quoted by The Southern Times as saying that Extract, in a reaction to Rossing Uranium's proposal, should "consider whether it's in the best interests of its shareholders and the Namibian people" to join forces with the Namibian-based company.

Hohnen hinted at the time that Kalahari would flex its majority share muscles in Extract to block any possibilities of co-developing the project with other partners.

The status quo seems to remain the same, with Mutumba yesterday admitting that "there is no new development in this regard".

The Rossing South Project is not expected to produce any uranium until at least 2014, but, while there is no concrete answer from Extract with regard to the proposed joint venture, Rio Tinto would hope to increase its shares in the Australian company to stand a better chance to seal the proposed deal.

Rio Tinto currently has an equities stake of about 15 percent in Extract, not enough to influence critical decisions such as those of entering partnerships on multi-billion-dollar projects.


http://www.newera.com.na/article.php?articleid=11333