HomeIndustry SectorsGenerationJapan nuclear crisis will not stop Husab uranium project

Japan nuclear crisis will not stop Husab uranium project

China Guangdong
Nuclear Power Group
Company “’ buying into
Kalahari Minerals
Sydney, Australia — ESI-AFRICA.COM — 05 April 2011 – Extract Resources Limited “’ the company proposing a US$1.7 billion uranium venture in Namibia “’ expects to overcome difficulties confronting the industry after Japan’s nuclear crisis, and to successfully fund the mine.

“Extract’s Husab uranium deposit will be developed because of its strategic importance,” CEO Jonathan Leslie told reporters here.

Last month, seeking access to the Namibian deposit, China Guangdong Nuclear Power Group Company offered US$1.2 billion for Kalahari Minerals plc, which owns about 43% of Extract.

A successful bid by China Guangdong Nuclear Power, that country’s second-largest reactor builder, would give it access to Husab, which Extract expects to become the third-largest producing uranium mine.

“It would be unrealistic to say there will be no effect on financing,” Leslie said from Sydney. “For all uranium projects, it’s going to be more difficult than it was before.”

Shares of uranium explorers and producers have tumbled amid concerns that the emergency at Tokyo Electric Power Company’s stricken reactors will prompt countries to suspend plans to build nuclear power plants. Extract fell 25% in the three weeks following the March 11 earthquake and tsunami, compared with a 2.9% gain in the benchmark S&P/ASX 200.

Extract rose as much as 5% to A$8.38 in Sydney today, the most in two weeks. The shares were 3.1% higher at A$8.23 at 1:12 p.m. local time, while the benchmark S&P/ASX 200 Index gained 0.2%.

Extract “’ about 14%-owned by Rio Tinto Group “’ said some 60% of the Husab project costs may be funded with debt if it develops the mine on its own, and that it would aim to approve the venture by the end of June. Husab is about 7km from London-based Rio’s Rossing mine and about 30km from Perth-based Paladin Energy Limited’s Langer Heinrich project.

While Extract is considering a “standalone” project, it said in February that it was in talks with Rio about a potential combination of Husab and Rossing. “If one option gives us better economic value, we would go down that route,” Leslie said today after the company released its development plan and cost estimates.