China National Nuclear Corporation (CNNC) has agreed to buy a 25% stake in Paladin's Langer Heinrich uranium mine in Namibia, entitling it to a corresponding share of the project's output.
|Langer Heinrich (Image: Paladin)
Australia's Paladin Energy and CNNC subsidiary China Uranium Corporation Limited signed an agreement on 18 January under which Paladin will sell a 25% joint-venture equity stake in the Namibian mine to CNNC for $190 million. The agreement was signed by Paladin CEO John Borshoff and director-in-general of CNNC's department of geology and mining Du Yunbin.
The offtake component of the agreement will allow CNNC to purchase its pro-rata share of Langer Heinrich's uranium output at the prevailing market spot price. The agreement also allows for Paladin to sell some of its share of the mine's production to CNNC under additional long-term offtake arrangements.
Completion of the transaction is dependent on certain Chinese regulatory approvals, including from the National Development and Reform Commission. Paladin said it expects these approvals to be obtained by mid-2014. It added that the government of Namibia has been formally informed about the agreement.
Paladin said that "having this highly respected member of the Chinese nuclear power industry participating in Langer Heinrich is a very significant and positive development for both the company and for Namibia."
Borshoff commented, "Paladin has now established an important strategic long term relationship with CNNC, which will become a major participant on a global scale in the nuclear electrification industry. This is the next key step in building our company and has far reaching positive implications both for Paladin and CNNC."
CNNC currently operates a fleet of nine nuclear power reactors in China with a combined capacity of 6018 MWe. However, it has plans to greatly increase this over the coming decades.
Yunbin added, "We treasure this valuable business opportunity with Paladin. In accordance with CNNC's open, inclusive, cooperative and win-win corporate principles we are looking forward to having further prosperous cooperation with Paladin."
The Langer Heinrich mine began production in 2007 and has already undergone two stages of expansion. Its current design capacity is for 5.2 million pounds U3O8 (2000 tU) per year, but Paladin anticipates producing 5.7 million pounds U3O8 (2192 tU) during the current financial year through optimizing measures. The company said that the mine is capable of being expanded further to some 8.5 million pounds U3O8 (3269 tU) per year. The mine's operating life is currently put at 20 years.
This is not the first Chinese investment in Namibian uranium mining. In 2012, China General Nuclear (CGN) acquired majority ownership of the Husab uranium mine through its purchase of former owner Extract Resources.
Researched and written
by World Nuclear News