SWAKOPMUND – Rio Tinto will accelerate the closure of its Rössing Uranium mine to June 2020 if the N$1.5 billion sale of the mine to China National Uranium Corporation (CNUC) is not approved by the Namibia Competition Commission (NaCC).
The mine has about 1000 employees and a lifespan stretching to 2025.
These were the sentiments of Werner Duvenhage, the managing director of Richards Bay Minerals, who spoke on behalf of Rio Tinto during a consultative stakeholder meeting, held by the NaCC regarding the proposed sale of Rössing Uranium to CNUC.
Rio Tinto is selling its 69 percent share in Rössing Uranium mine to CNUC for N$1.5 billion if the competition watchdog approves the deal. The Namibian government holds a three percent stake in Rössing but possesses the majority (51 percent) of voting rights. The Iranian Foreign Investment Company holds a 15 percent stake in Rössing.
The Industrial Development Corporation of South Africa owns 10 percent in the mine, while local individual shareholders own a combined three percent.
Duvenhage says Rio Tinto cannot continue sustaining a loss-making business hence the decision to wrap up operations early if the sale is rejected.
“Thus we want a decision to be made as soon as possible so that everyone affected and involved in this transaction can plan ahead for their own future,” Duvenhage remarked.
Duvenhage, during the meeting, also explained that there is no second buyer that can be considered if the current deal do not materialise. “There is not second option as all of the potential buyers did not meet the criteria for the sale. We have been looking for an investor for the past five years that will continue operations as Rio Tinto had been doing. CNUC are our best option as they qualified in terms of the criteria used to identify a suitable buyer,” he said.
He noted while Rössing made a profit of N$160 million in the previous financial year, it had a negative cash flow for years and spends more than what it makes.
CEO of NaCC and secretary to the Commission, Vitalis Ndalikokule indicated that they will compile a final report that will be submitted to the board of commissioners with final recommendations.
“The commission may approve the deal with recommendations, however, the final decision will be communicated to the relevant parties within 30 days as required by the Competition Commission Act,” he said.