Itochu Buys Stake in Australian Miner
“Itochu Corp. said Friday it has struck a deal with London-listed Polo Resources Ltd. to buy a roughly 10% stake in the owner of one of the world’s largest undeveloped uranium deposits. Itochu’s acquisition of Polo’s stake in Extract Resources Ltd. gives it a major advantage over North Asian rivals in the race to secure offtake from the Rossing South mine in Namibia once it begins production.
Australia’s Extract has been in talks for several months with potential partners in the development of Rossing South, which it says has the potential to produce 15 million pounds of uranium oxide a year. That would make it the world’s second-largest uranium mine. Itochu is buying Polo’s entire 9.2% stake, plus a 1.1% interest from a related party of Polo, in a transaction valued at about 15 billion yen (US$169 million) in total.”
Source: Wall Street Journal, July 9, 2010
- Itochu, a Japanese industrial conglomerate, basically buys 10.3% of Rossing South mine in Namibia, the worlds largest undeveloped (known) uranium deposit.
- The company tries to secure a long term supply of uranium for the Japanese nuclear power industry. Japan is one of the countries with the highest capacity of nuclear power generation in the world.
- Uranium deposits and uranium exploration companies are becoming increasingly attractive acquisition candidates as the US government and large energy companies seem to agree that the next generation of nuclear energy (fast breeder reactors that do not produce nuclear waste and that do not have the potential of explosive reactions) is the most likely cure for the world’s fossil energy addiction in the long term.
- The main producers of uranium are Canada, Australia, Russia, Namibia and Kazakhstan. This spread of deposits makes the production of uranium host to much less geopolitical issues than oil production.
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