Key words: CGNPC, Extract Resources, uranium

China Guangdong Nuclear Power Corp. launched a A$2.2 billion bid for Australian uranium developer Extract Resources February 14, after having acquired Extract’s largest shareholder, London-listed Kalahari Minerals, earlier this month.

The expected move has China Guangdong subsidiary Taurus Minerals making an unconditional all-cash offer at A$8.65/share for each Extract Resources share.

China Guangdong Nuclear Power Corp.’s takeover of Kalahari Minerals was completed February 2, making Cgnpc the largest shareholder, via Kalahari, of Extract Resources and its Husab uranium project in Namibia.

Located near Swakopmund on the west coast of Namibia, Extract Resources’ Husab uranium project is said by Extract to be the fourth largest uranium-only deposit in the world, with measured resources of 84 million pounds uranium and indicated resources of 274 million lb in just two of the project’s five zones.

Husab is located near Rio Tinto’s Rossing uranium mine in Namibia and there have been reports of Rio Tinto possibly entering into an operations contract or other joint arrangements with Cgnpc to help bring the massive Husab project into operation.

According to Cgnpc’s takeover offer for Kalahari, an agreement in principle has been reached with Namibia’s state-owned Epangelo Mining Co. for Epangelo to take a possible 10% equity stake in Swakop Uranium, the Namibian subsidiary of Extract Resources.

Namibia, which is currently discussing a draft nuclear fuel cycle policy, is the world’s fourth largest uranium producing country, after Kazakhstan, Canada and Australia. It has ambitions to take greater benefit of its mineral resources and, in particular, its uranium resources.

The country is trying to promote technology transfer agreements with nuclear companies and wants to add downstream value-added enterprises, such as uranium enrichment to its mining operations.

Namibia is laying the legal and infrastructural groundwork for building its own nuclear power plants in the future and the draft nuclear fuel cycle policy is meant to undergird those efforts.

Currently, the country imports about 60% of its electrical power requirements.

In May, 2011, Namibian Energy & Mines Minister Isak Katali alarmed international investors with statements saying that Epangelo should have exclusive control over strategic minerals, which includes uranium.

Source: http://www.i-nuclear.com