Rio Tinto has entered into a binding agreement with China National Uranium Corporation (CNUC) for the sale of its entire 68.62 per cent stake in Rössing Uranium Limited, owners of the Rössing mine in Namibia, for up to $106.5 million.
|The view of the open pit and surrounding landscape at Rössing Uranium, from the ‘Hill Jim’ viewpoint. Image source ©Rio Tinto|
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. The contingent payment is linked to uranium spot prices and Rössing’s 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 total consideration is subject to a maximum cap of $106.5 million.
The transaction represents the culmination of an extensive assessment of strategic options considered by Rio Tinto in relation to Rössing.
Rio Tinto chief executive J-S Jacques said the sale of Rio Tinto’s stake in Rössing demonstrated the company’s commitment to strengthening its portfolio and focussing on core assets, which deliver sector leading returns in the short, medium and long term.
“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. Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing.”
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.
Rössing has the world’s longest-running open pit uranium mine. Operating since 1976, the Rössing business has produced the most uranium of any single mine. Rössing produces and exports uranium oxide from Namibia to nuclear power utilities around the world.
In 2017, the Rössing mine produced 4,652 klbs and Rio Tinto's share of mined uranium was 3,192 klbs.