Chinese companies upping uranium stakes
29 October 2009
Australia's Foreign Investment Review Board (FIRB) has approved two separate investments by Chinese companies in Australian uranium exploration companies.
The China Uranium Development Company (CUD), a subsidiary of China Guangdong Nuclear Power Co (CGNPC), agreed in September to acquire up to 70% of Energy Metals, subject to various conditions including the approval of the Australian and Chinese governments. According to Energy Metals, CUD has now received notification of approval from FIRB and has also recently announced the extension of its offer to 4 December.
Energy Metals notes that the offer still remains conditional on approval from Chinese regulators plus acceptance by 51% of existing shareholders. In a letter to shareholders, Energy Metals managing director Lindsay Dudfield urged shareholders to accept the offer in the absence of any superior proposals. "Energy Metals has received no proposals since the announcement of the CUD offer. Our view is ... that it is in the best interests of all Energy Metals shareholders to partner with China Guangdong Nuclear Power Co by accepting the CUD offer," he said.
Energy Metals has nine projects in Australia's Northern Territory and Western Australia, including the relatively high uranium Bigrlyi project in Northern Territory, which is a joint venture with Paladin Resources' subsidiary Valhalla Uranium (42.1%) and Southern Cross Exploration (4.2%). Most of the projects contain uranium mineralisation discovered by major companies in the 1970s.
Chinese miner buys in to junior
Meanwhile, Chinese state-owned mining company Hebei Mining's acquisition of a 14.9% stake in junior mining company Raisama has also been approved by the FIRB. The 4.5 million new shares and 2.5 million existing shares bought by Heibei for 25 cents each represent a total investment of A$1.75 million ($1.59 million) in the currently unlisted Sydney-based company.
"The Hebei provincial government currently has plans to build at least three nuclear reactors and is selectively securing strategic interests in uranium exploration companies internationally that it believes have the best potential to meet the province's growing need for uranium," Raisama told its shareholders.
Raisama describes itself as an "emerging uranium development company" and holds six prospective Australian uranium projects in Western Australia and South Australia plus a share of a prospective project in the Kyrgyz Republic, all at the exploration stage. Its flagship prospect is the Sunday Creek project, located some 30 km from the Kintyre uranium deposit in Western Australia and the site of limited exploration in the 1970s.