Namibian uranium supplier faces Chinese takeover bid

9 March 2011
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9 March 2011 | Lindsay Clark

Mining firm Kalahari Minerals has recommended shareholders accept a proposed takeover by state-owned Chinese nuclear firm China Guangdong Nuclear Power HoldingCorporation (CGNPC).

Uranium miner Extract Resources, listed on the Namibian stock exchange, is 43 per cent owned by Kalahari and will be affected if the merger goes ahead.

Documents detailing the proposed merger released by Kalahari, which is controlled from the UK, said: “Based in Shenzhen within [China], CGNPC is a state owned nuclear power producer with material interests in nuclear fuels procurement and production.”

It added CGNPC’s main business is to manage supply of nuclear fuels and establish an interest in and support development of commercial resources and reserves of natural uranium – the substance used to produce nuclear power.

“Extract Resources is developing the Husab Uranium Project, strategically located within a 50km radius of several world class uranium deposits,” the document said.

“Given China’s emphasis on diversifying energy sources and its intended increase in nuclear generating capacity, [CGNPC] is committed to supporting development of new supply capacity in the natural uranium market in China.”

Extract Resources’ independent directors said they would consider the implications of the proposed take over of Kalahari, which is valued at £756 million (US$1.2 billion) by the offer.

Uranium supply is likely to become constrained in the next few years as the UK and US, as well as China, enter into nuclear power capacity building programmes.

Companies are already moving to secure supply. In May 2010, Japanese manufacturer Toshiba, which builds nuclear power stations, announced a $100 million (£62 million) investment in USEC, a supplier of enriched uranium.

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