Energy

Guangdong Nuclear may cut bid for Kalahari

(Agencies)
Updated: 2011-03-24 10:59

BEIJING - State-owned China Guangdong Nuclear Power (CGNPC) may cut its proposed 756 million pound ($1.2 billion) offer for uranium miner Kalahari Minerals in light of Japan's nuclear crisis, a CGNPC official said on Wednesday.

The official said CGNPC and Kalahari, which backed the original proposal, were discussing the impact of Japan's nuclear crisis on both companies' prospects.

"The two parties are in touch to do an assessment," an official of CGNPC Uranium Resource Co, a unit of CGNPC, told Reuters.

"The revaluation of the deal will depend on the outcome of those assessments," he said, declining to be named as he was not authorized to speak to the media.

Kalahari shares, which had been 0.3 percent higher at 245.75 pence, fell 3.3 percent to 243.68 pence by 1004 GMT after the Reuters report.

Kalahari had no immediate comment.

CGNPC Uranium Resource Co announced the bid proposal just days before Japan's Fukushima nuclear reactor was crippled by an earthquake and tsunami, sparking fears of a radiation disaster, which knocked uranium stocks worldwide.

Uranium reactor programs are under threat as Europe, the United States and China review plans after Japan's worst earthquake left some reactors on the verge of meltdowns.

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The market had already factored in a cut to CGNPC's offer after the Japan disaster, with Kalahari's shares having closed on Tuesday at a 16 percent discount to the 290 pence per share bid proposal CNGPC originally sent.

Just this week, Canadian miner Uranium One, working through its largest shareholder, Russia's ARMZ, cut its offer for Australian uranium prospector Mantra Resources by 12 percent to A$944 million ($952 million).

The prize in Kalahari is its main asset, a 43 percent interest in Extract Resources, which owns the Husab uranium project in Namibia near global miner Rio Tinto's Rossing uranium mine.

Under Australian rules, any bid for Kalahari could trigger a required follow-on bid for Extract.

Rio Tinto, which owns 14 percent stakes in both Kalahari and Extract, had been talking to Extract about combining their Namibian projects and simplifying its cross shareholdings ahead of the CGNPC proposal.