UPDATE: Japanese Companies Eye Namibian Uranium Deposit
04 November 2010 - 10:42AM
Dow Jones News
Extract Resources Ltd. (EXT.AU) said Thursday that a recent
investment in the company by Itochu Corp. (ITOCY) has spurred
significant interest from other Japanese entities in its Husab
uranium prospect in Namibia.
One of the world's largest undeveloped uranium deposits, Husab
is just six kilometers away from the massive Rio Tinto
Ltd.-operated (RTP) Rossing uranium mine. It was originally called
Rossing South but Extract has changed its name to Husab to avoid
confusion.
Japan generates about a third of its electricity from nuclear
power and other countries including the U.S. are turning to the
energy source to reduce fossil fuel consumption.
China is undertaking a massive expansion in nuclear power,
expanding its current nine gigawatts of nuclear capacity from 11
reactors to 70-80 GW by 2020 and 200 GW by 2030.
Extract, which counts Rio Tinto as a 15% shareholder, last year
hired Rothschild to conduct a strategic review of its business.
Options include building a stand-alone mine, forming a joint
venture with the Rossing mine or bringing in more strategic
investors.
The Perth-based company said Thursday that its base-case remains
to develop Rossing South as a stand-alone project.
Still, it said it continues to hold discussions with external
parties, with a number of groups continuing to show interest in the
project.
A 10.3% investment in Extract by Itochu has led to "significant
interest from other Japanese institutions" and some have visited
the project, Extract Chief Executive Jonathan Leslie said in speech
notes prepared for the company's annual shareholder meeting.
Japan's Foreign Affairs Secretary Osamu Fujimora has also
visited the southern African nation and met Namibia's prime
minister, Leslie said. "Good relationships are in place and we
continue to enjoy the government's support for this project," he
added.
Concerns the Namibian government could wrest control of the
project from Extract have weighed on its share price but the
company has consistently played down those fears.
It said a project feasibility study for a stand-alone
development is now due in the first quarter of 2011, back from its
previous guidance of the end of 2010. "Our target for plant
commissioning is the first quarter of 2014," Leslie said.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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