Extract Says Namibia Uranium Mine to Continue After New Policy
May 02, 2011, 12:50 AM EDTBy James Paton
May 2 (Bloomberg) -- Extract Resources Ltd., aiming to develop the world’s third-largest uranium mine, is “confident” its project in Namibia will continue even as the government proposes to give all mining permits to a state-owned company.
“Extract continues to have regular and positive consultation with the government of Namibia,” the Perth-based company said in a statement today to the Australian stock exchange.
Extract fell 20 percent in two days in Sydney last week after reports that uranium, copper, gold and coal would face Namibian legislation, giving the state exclusive exploration and mining rights. Namibia’s cabinet said in an April 29 statement that it supported the proposal to issue all permits to the African nation’s state-owned mining company Epangelo.
Extract also halted its shares in Sydney before an announcement about China Guangdong Nuclear Power Group Co.’s proposal in March to acquire Kalahari Minerals Plc for 756 million pounds ($1.26 billion), according to a separate statement today.
Kalahari’s biggest asset is a 43 percent stake in Extract, developer of the $1.7 billion Husab uranium project in Namibia. China is seeking access to a uranium venture that Extract expects will become the largest producing asset after Cameco Corp.’s McArthur River mine and the unfinished Cigar Lake mine.
Kalahari Acquisition
China Guangdong said March 7 that its bid depended on the Australian Securities and Investment Commission granting an exemption allowing the company to hold more than 20 percent of Extract. With Kalahari owning 43 percent of the explorer, Australian rules would normally require China Guangdong to make a bid for all of Extract, Patersons Securities Ltd. said in March.
The Kalahari offer should proceed only if Extract holders receive the same terms and are “not disadvantaged in any way,” Extract said in a March 9 statement.
Extract, whose shares declined 29 percent in Sydney trading this year, closed at A$6.68 on April 29.
Shares of uranium explorers and producers tumbled after the March 11 earthquake and tsunami in Japan amid concerns that the crisis at the Fukushima Dai-Ichi nuclear power station would prompt countries to delay plans to build more reactors.
Husab is about 7 kilometers (4.4 miles) from London-based Rio Tinto Group’s Rossing mine and about 30 kilometers from Perth-based Paladin Energy Ltd.’s Langer Heinrich project.
Extract said the proposed changes to Namibia’s minerals policy wouldn’t “adversely affect” its exploration licenses or the Husab mining license application lodged on December 10.
Husab, currently the world’s fifth-largest uranium deposit, is expected to produce 15 million pounds of uranium oxide a year and begin in 2014, Extract said in April.
Namibia, the world’s fourth-largest uranium producer and biggest miner of offshore diamonds, is considering legislative changes to ensure its citizens receive more benefit from the southern African nation’s mineral wealth, Finance Minister Saara Kuugongelwa-Amadhila said March 9.
--Editors: Amit Prakash, Indranil Ghosh
To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.
