Rio Tinto has entered into a binding agreement with China National Uranium Corp. Ltd. (CNUC) for the sale of its entire 68.62% stake in Rössing Uranium Ltd., owners of the Rössing mine in Namibia, for up to $106.5 million. In 2017, the Rössing mine moved 25.2 million metric tons (mt) of rock to produce 2,110 mt of uranium oxide. Operating since 1976, it has produced more uranium oxide than any other single mine.
The total consideration comprises an initial cash payment of $6.5 million, payable at completion, and a contingent payment of up to $100 million following completion. The contingent payment is linked to uranium spot prices and Rössing’s net income during the next seven years. In addition, Rio Tinto will receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion. The total consideration is subject to a maximum cap of $106.5 million.
The transaction represents the culmination of an extensive assessment of strategic options considered by Rio Tinto in relation to Rössing. The transaction is subject to certain conditions precedent, including merger approval from the Namibian Competition Commission. Subject to these conditions being met, the transaction is expected to completed in the first half of 2019.