Rio Tinto sells Namibia uranium mine to China

The deal is valued up to $106.5 million.

Diversified miner Rio Tinto has signed a binding agreement with China National Uranium Corporation (CNUC) to divest of its 68.62 percent stake in the Namibia-based Rössing uranium mine for up to $106.5 million (R1.5 billion).

The company announced on Monday that the purchase price will comprise an initial cash payment of $6.5 million (R89.4 million), payable at completion, and a contingent payment of up to $100 million (R1.4 billion) following completion.

The deal is expected to be completed in the first half of 2019.

The contingent payment is linked to uranium spot prices and Rössing’s net income during the next seven calendar years. In addition, Rio Tinto will receive a cash payment if CNUC sells the Zelda 20 Mineral Deposit during a restricted period following completion.

Rio Tinto CEO Jean-Sebastian Jacques said the sale of its interest in Rössing demonstrated the “commitment to strengthening our portfolio and focussing on our core assets, which deliver sector leading returns in the short, medium and long term.”

“Rio Tinto has a long history in Namibia and I would like to thank the many people across Rio Tinto and the communities in which we operate who have contributed to the success of Rössing. I wish them continued success under new ownership. Rio Tinto will work closely with CNUC to ensure a smooth transition and ongoing sustainable operation at Rössing,” Jean-Sebastian said in a statement.

The deal is subject to certain conditions, including merger approval from the Namibian Competition Commission.