MELBOURNE – Rio Tinto PLC (RIO) said Monday it has agreed to sell its minority stake in Extract Resources Ltd. (EXT.AU), but remains open to jointly developing the Australian uranium explorer's Husab project in Namibia with new owner China Guangdong Nuclear Power Corp. and partner China-Africa Development Fund.
The mining company's Rossing uranium unit in a statement said it had agreed to sell its holding of 35.7 million shares, roughly 14.2% of Extract.
"We believe that a joint development of the Husab project with Rossing would bring benefits to the shareholders of both Rossing and Husab, the local community and Namibia," said Chris Salisbury, managing director of Rossing.
China Guangdong and CAD Fund have offered A$8.65 a share for Extract, valuing it at roughly A$2.2 billion. The Chinese companies' bidding vehicle, Taurus Resources, by last week had already grabbed a more than 64% interest in Extract.
The takeover secures control of Extract's Husab uranium project in Namibia, which promises to become one of the world's largest uranium mines and neighbors Rio's operating Rossing uranium mine. Mining and power companies are seeking uranium supplies to meet an expected rise in demand from China, India and other countries with plans to build fleets of nuclear power stations.
Rio and Extract said a year ago they had discussed a possible combination of the Rossing mine and Husab project.
