Rio Tinto to sell Rössing Uranium Limited to CNUC
26 Nov 2018 15:20pm
SWAKOPMUND, 26 NOV (NAMPA) - Rio Tinto has entered into a binding agreement with China National Uranium Corporation (CNUC) for the sale of Rio Tintos entire 68,62 per cent stake in the Rössing Uranium mine in Namibia.
In a media release issued on Monday, Rössing announced that the stake has been sold for up to USD106.5 million (over N.dollars 1.4 billion), which comprises an initial cash payment of USD6.5 million (about N.dollars 90 million), payable at completion and a contingent payment of up to USD100 million (over N.dollars 1.3 billion) following completion.
The contingent payment is linked to uranium spot prices and Rössings net income during the next seven calendar years.
In addition, Rio Tinto will receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion, the document stated.
According to the group, the transaction represents the culmination of an extensive assessment of strategic options considered by Rio Tinto in relation to the mine.
In the same document, Rio Tinto Chief Executive Officer Jean-Sébastien Jacques was quoted as saying the sale of the groups interest in Rössing demonstrates its commitment to strengthening its portfolio and focussing on the groups core assets, which deliver sector-leading returns in the short, medium and long term.
Rio Tinto has a long history in Namibia and it will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing, Jacques added.
The transaction is said to be subject to certain conditions including merger approval from the Namibian Competition Commission and should these conditions be met, the transaction is expected to be completed in the first half of 2019.