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Chinese suitor reopens Kalahari Minerals talks

October 14, 2011
October 9, 2011 7:28 pm

Chinese suitor reopens Kalahari Minerals talks
China Guangdong Nuclear Power has reopened takeover talks with Kalahari that could lead to a deal valuing the Aim-quoted miner at more than £650m ($1bn).
A deal had been agreed with the state-controlled Chinese company to acquire the Namibian uranium mining interests of Kalahari in March at 290p a share. But the Japan tsunami and Fukushima nuclear plant disaster prompted both sides to agree a reduced price of 270p as valuations of uranium miners fell.
Kalahari owns 43 per cent of Extract Resources, whose main asset is the Husab uranium project, located close to Namibia’s main port of Walvis Bay. The asset has been identified as the world’s fourth-largest uranium deposit.
Rio Tinto holds a 14 per cent stake in Extract as well as a 11.5 per cent holding in Kalahari. Investors expect production to commence by 2014. Husab has an estimated 367.3m pounds of uranium oxide, the key ingredient in the fuel used by nuclear reactors.
In spite of the blow to sentiment towards nuclear power generation and uranium prospecting since the Fukushima disaster, China remains determined to push ahead with a large expansion of its nuclear power industry. If completed, the move would represent one of the largest Chinese investments in a London-quoted company and the latest of a series of deals in which Chinese groups have acquired strategic mineral concessions in Africa.
But it remains unclear whether an agreed takeover of the leading investor in Husab by the Chinese nuclear plant operator could see the entire deposit fall into its hands.

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