WINDHOEK – The road has been cleared for China National Uranium Corporation (CNUC) to acquire the entire issued share capital of Rio Tinto Overseas Holding Limited (RTNH), after which CNUC will gain control over Rössing Uranium Limited. This was confirmed yesterday when the Namibia Competition Commission (NaCC) issued a statement saying they have approved the acquisition of Rössing Uranium Limited (RUL) with conditions.
“The commission found that the proposed transaction is unlikely to result in the prevention or substantial lessening of competition or in any undertaking acquiring or strengthening a dominant position in -the relevant market,” reads the statement issued by NaCC’s Chief Executive Officer and Secretary to the Commission Vitalis Ndalikokule.
However, Ndalikokule noted that the commission found that the proposed merger does give rise to significant public interest concerns such as employment, the bundling of tenders for outsourced services, goods, and/or products, transfer pricing and dominance of the local uranium sector. RUL is involved in mining uranium-bearing rock and processing this ore into uranium oxide for the world’s nuclear energy market, which fuels the generation of electricity.
CNUC and its parent company is active globally in various businesses, including nuclear power generation, nuclear power plant construction, nuclear fuel manufacturing, nuclear technology, uranium mining and renewable energy.
Ndalikokule pointed out that in order to safeguard employment, local procurement and maintain benefits currently derived in terms of taxes and royalties, the commission insisted that there shall be no merger specific retrenchments of employees of RUL for a period of two years. RUL shall maintain a ratio of at least 95 percent local employees to foreign employees until the expiry of the lifespan of the mine, RUL shall maintain a ratio of at least 95 percent local employees to foreign employees, at management level until the expiry of the lifespan of the mine, it shall not employ any non-Namibian person at the level of management on any basis other than on a two-year fixed term contract.
The CEO further said RUL shall not implement any changes to its 30 July 2013 Procurement Policy which will have the effect of providing for less favourable terms to local suppliers until the expiry of the lifespan of the mine. This is to benefit local Namibian SMEs for procurement of any services, goods or products below a value of N$250 000.
Ndalikokule continued that RUL shall procure a minimum of 80 percent of any such services, goods or products from companies which are majority Namibian owned and employ a minimum of 75 percent Namibian citizens.
The Rössing Uranium Mine increased its production with 17 percent in 2018 as it produced 2 479 tonnes of drummed uranium oxide compared with 2017’s production of 2 110 tonnes. However, the total mined tonnes were 24 percent below production targets following a mining slow down to curtail the impact of water supply interruptions.
According to Rössing’s Managing Director Richard Storrie, the sale of Rossing to CNUC is a positive development that provides certainty to the mine’s future. In Rössing Uranium’s Report to Stakeholders 2018, Storrie said, “The announcement of the sales transaction of the majority shareholding is seen as very positive, giving certainty to the survival of the operation at least until 2025 and potentially extending the mine life beyond that. The deal will bring an aspect of vertical integration into the Chinese nuclear market, and in particular with the strongest player in that market.”