Paladin Energy that owns Langer Heinrich Uranium mine in the Erongo Region has sold a 25 percent ownership stake in the mine to the Chinese Uranium Corporation Ltd , a wholly owned subsidiary of Chinese National Nuclear Corporation (CNNC) for U$190 million (about N$2 billion). The off take component of the agreement will allow CNNC to purchase its pro-rata share of product at the prevailing market spot price. This also offers an opportunity for Paladin to benefit by securing additional long-term off take arrangements with CNNC , at arm's length rates, from Paladin's shares of Langer Heinrich's production. CNNC has also agreed to pay a U$20 million non-refundable deposit to Paladin. The General Manager for International Affairs of Paladin Energy , Gregory Walker , made the announcement yesterday in Swakopmund after the the transaction was concluded in Australia on Sunday. He says the Namibian government has already been formally informed about the agreement, which will be of great significance to the future development of the country. According to Walker, Paladin Energy was already looking for a strategic investor to join the Uranium giant, Langer Heinrich. "We are pleased that the negotiations were successfully concluded last Saturday, which resulted in a transaction taking place in Beijing China ," Walker explained. According to him this is a very positive and strategic development for Langer Heinrich and Namibia as the company was looking forward to bring a partner on board for investment that would level the current debt of the company. "The past three years were extremely difficult for the uranium industry as uranium prices went through dramatic difficulties due to the Fukshima incident of March 2011 . We have seen mine closures and mines going on maintenance. It has been without a doubt the toughest times for the uranium industry. However, we want to make sure that the company remains robust until uranium prices recover with the deal we just concluded," Walker said. He went on to say that the industry still remains unsure when uranium prices would recover, but they now have the financial backing to hold on until such time. "But in clearer terms this strategic partnership has two aspects, one is to make money but also to concentrate on somebody that is a significant player in nuclear energy. We all know that China is a dominant force in this department as they have a sizable demand for nuclear energy. There is no doubt that China is a one of the biggest players in terms of nuclear energy, since they have plans to set up at least five nuclear power stations this year alone. This is an indication of the connection of China and the importance uranium would play for their energy supply," Walker went on to say. Although the boards of Paladin and CNNC approved the transaction, the finalisation of the agreement is still subject to the approval of the regulatory authorities in China and Namibia . CNNC is a major force in the Chinese national nuclear technology industry and boast a full range of nuclear-technology industries, while they also play an important role in developing nuclear power and rohsselated power plants. The joint venture is said to be representing a formidable partnership focused on advancing global uranium production and is also expected to increase uranium prices, as well as the long-term growth and development of the globally important mining operation at Langer Heinrich.
Most Popular Stories
- Koch Brothers Step up Anti-Obamacare Campaign
- FDIC Sues Big Banks Over Rate Manipulation
- Vybz Kartel Convicted of Murder
- FDIC Accuses Big Banks of Fraud, Conspiracy
- Stocks Close Lower Ahead of Crimea Vote
- U.S. Consumer Sentiment Falls in Early March
- Ulta Shares Look Good on Strong Q4
- Is Malaysian Airlines Flight 370 in Andaman Sea?
- Jittery Investors Dumping Russian Stocks
- SoCalGas Reaches Record Spend on Diversity Suppliers