Bloomberg News

Rio Tinto Accepts Guangdong Nuclear Offer for Kalahari Stake

January 31, 2012

(Updates with China Guangdong stake in second paragraph.)

Jan. 31 (Bloomberg) -- Rio Tinto Group agreed to sell its 11.1 percent stake in Kalahari Minerals Plc to China Guangdong Nuclear Power Co., which is seeking control of the world’s fourth-largest uranium deposit.

The acceptance boosts Guangdong Nuclear’s holding in London-based Kalahari to about 40.5 percent, short of a 50 percent threshold that would trigger a A$2.2 billion ($2.3 billion) takeover bid for affiliated Australian uranium explorer Extract Resources Ltd. Kalahari owns 43 percent of Extract. The state-owned Chinese company said Jan. 20 it had received acceptances for 29.4 percent of Kalahari.

At stake is Extract’s Husab project in Namibia, 7 kilometers (4.4 miles) from Rio Tinto’s Rossing uranium mine, the third-biggest producer of uranium. Rio also owns a 14.2 percent stake in Perth-based Extract.

“A decision about whether to accept any Extract offer will be taken in due course in light of any recommendation provided by the board of Extract,” London-based Rio, the world’s third- largest mining company, said today in a statement from its Namibian unit.

Guangdong Nuclear must make a cash offer for Extract within four weeks of winning more than 50 percent of Kalahari at a price of A$8.65 a share, according to Australian regulators. Extract closed unchanged at A$8.55 in Sydney today.

Deadline on Feb. 2

Guangdong Nuclear’s offer for Kalahari, scheduled to close on Feb. 2, is conditional on gaining acceptances of more than 50 percent.

Hong Kong-based APAC Resources Ltd. said Jan. 12 it has accepted the offer with regard to its 13.1 percent stake in Kalahari.

Rio originally purchased 24.8 million shares in Kalahari on Sept. 8, 2008, according to a Kalahari statement three days later. Kalahari shares closed at 32.75 pence that day. Guangdong Nuclear has agreed to buy Kalahari for 243.55 pence a share. It rose 0.1 percent to 242.25 pence by the close of trading in London today.

--Editors: John Viljoen, Randall Hackley

To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net; Chamwe Kaira in Windhoek at ckaira@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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