China Chases African Uranium Mine in Nuclear Energy March

China’s leading uranium supplier will buy a majority stake in an African mine from global giant Rio Tinto for up to $106.5 million, as Beijing moves to replace more of its traditional coal-generated power with cleaner sources like nuclear and natural gas.

China National Uranium Corp. Ltd. (CNUC) will purchase Rio’s 68.62% of Rössing Uranium Ltd. for an initial cash payment of $6.5 million, followed by up to $100 million in additional payments based on uranium spot prices and the mine’s performance over the next seven years, Rio said in a statement on Monday. Rössing operates the world’s longest-running open pit mine for uranium, the main material used to generate nuclear power. The mine has been in business since 1976, and has produced the most uranium of any single mine.

China currently has 46 operating nuclear power plants and another 11 under construction, accounting for about 4% of the nation’s total power, according to the International Atomic Energy Agency. The nuclear energy buildup is part of a broader push that has also seen the country aggressively develop new power-generating capacity from natural gas and renewable sources like wind and solar, in an effort to wean itself from heavily-polluting coal.

China National Uranium did not post a formal announcement of the deal on its website. But Rio Tinto said the sale “represents the culmination of an extensive assessment of strategic options.”

“The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focusing on our core assets, which deliver sector leading returns in the short, medium and long term,” said Rio Tinto Chief Executive Jean-Sébastien Jacques. “Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing,” he added.

The deal is expected to close in the first half of next year.

Contact reporter Yang Ge (geyang@caixin.com)