PERTH (miningweekly.com) – Global diversified miner Rio Tinto has signed a binding agreement with China National Uranium Corporation (CNUC) to divest of its 68.62% stake in the Rössing uranium mine, in Namibia, for up to $106.5-million.
Rio CEO Jean-Sebastian Jacques said on Monday that the transaction represented the culmination of an “extensive assessment of strategic options” for the uranium mine.
“The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focusing on our core assets, which deliver sector leading returns in the short, medium and long term,” he said in a statement.
The total consideration comprises an initial cash payment of $6.5-million, payable at completion, and a contingent payment of up to $100-million following completion of the transaction.
The contingent payment is linked to uranium spot prices and Rössing's net income during the next seven calendar years.
In addition, Rio will receive a cash payment if CNUC sells the Zelda 20 mineral deposit during a restricted period following completion.
The transaction is subject to certain conditions precedent, including merger approval from the Namibian Competition Commission. Subject to these conditions being met, the transaction is expected to complete in the first half of 2019.
“Rio Tinto has a long history in Namibia and I would like to thank the many people across Rio Tinto and the communities in which we operate who have contributed to the success of Rössing. I wish them continued success under new ownership,” said Jacques, adding that the company would work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing.
The openpit Rössing mine has been operational since 1976 and in 2017 produced 4.6-million pounds of uranium, of which Rio’s share was 3.19-million pounds.