Rio Tinto sells stake in Rossing uranium mine to China
Mining giant Rio Tinto, (ASX, LON:RIO) has agreed to sell its controlling stake in Rössing Uranium in Namibia to a state-backed Chinese company, in a deal that could bring up to $106.5 million to the world’s second largest miner’s coffers.
The Anglo-Australian miner will initially receive $6.5 million for its almost 69% stake in Rössing Uranium Limited, which owns the namesake mine, from China National Uranium Corporation (CNUC). However, Rio could end up pocketing up to $100 million more depending on the profitability of the mine and the price of uranium between now and 2025.
Rössing’s sale, which MINING.com anticipated in September, marks the end of Rio’s extensive assessment of strategic options, which included the disposal of its unwanted assets, it said in the statement.
“The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focusing on our core assets,” Rio Tinto chief executive Jean-Sebastien Jacques said.
The transaction comes only two month after a deal between Rio and another Chinese firm —China National Nuclear Corporation (CNNC) — fell through.
Last year, the company recorded a $267 million impairment on Rössing due to oversupply in the uranium market, which resulted in “structural changes to forecast pricing” as it put it at the time.
Rio also holds 68.4% of Australian uranium producer Energy Resources of Australia, and 100% of the Roughrider uranium project in Canada.
Rössing, the world’s longest-running open pit uranium mine, currently generates about 3% of the global supply of the radioactive commodity.
The mine is also owned by the Iranian Foreign Investment Company (15%), the Industrial Development Corporation of South Africa (10%), Namibian government (3%) and individual shareholders (3%).
The transaction, expected to close in the first half of 2019, is subject to certain conditions, including approval by the Namibian Competition Commission.