Investor defies Rio Tinto over Namibia

WINDHOEK – A group of investors is engaged in a battle of wills with mining giant Rio Tinto Ltd, which the group feels is trying to take control of a prized uranium deposit in Namibia without paying a full price for it.

Rio Tinto holds the majority stake in Rössing Uranium Mine.The group includes Canadian mining entrepreneur Stephen Dattels, who has invested heavily in the project in recent days, and wants to see it properly auctioned off, according to a report contained on the www.financialpost.com website.The project in question is the Rössing South deposit in Namibia.It is controlled by a Toronto-listed company, Extract Resources Limited, which is based in Perth and is 40 per cent-owned by London-based Kalahari Minerals PLC.Recent drilling has confirmed that Rössing South is a world-class resource.That drew the interest of Rio Tinto, which already owns the nearby Rössing Uranium Mine.Rio Tinto acquired stakes in Extract Resources and Kalahari Minerals last year, the report said, adding that it then supported a merger between the two miners, which would have allowed it to buy shares in the combined company without being subject to a 20 per cent cap under Australian takeover provisions.The merger was called off over concerns that Rio Tinto could get control of the company without paying a premium for it.In Rio Tinto’s last annual report, the company stated that it is transferring its interest in Extract Resources into the Rössing Uranium Mine joint venture.Now Rio Tinto is talking to Extract Resources’ and Kalahari Minerals’ shareholders to try to support a joint venture that would allow it to run Rössing South. But it is having little success, the report said.’Why should Rio Tinto be able to muscle the shareholders of Extract Resources and Kalahari Minerals around to suit its own benefit? In my point of view, there is a much better alternative, which is to have both companies sold to the highest bidder,’ Dattels, one of the key executives at Toronto-based Barrick Gold Corporation is quoted as saying in an interview.According to the report Dattels sold uranium company UraMin Inc. for US$2,5-billion in 2007, and he is convinced that Rössing South is the next big thing.He bought major interests in Extract Resources and Kalahari Minerals through two mining companies he runs, and believes there are many potential buyers for the deposit.’This could easily wind up being the most valuable uranium deposit in the world,’ Dattels was quoted in the report.One of the shareholders to which Rio Tinto was talking is Toronto-based NWT Uranium Corp., which has an indirect stake in Kalahari Minerals.But those talks broke off abruptly, and NWT issued an extraordinary statement last Monday, saying: ‘It had concern with certain questionable acts by Rio management which were not in keeping with the spirit of the discussions,’ adding that John Zorbas, managing director of NWT said that he would also like to see Rössing South sold through a ‘serious bid’ or an auction.He declined to comment on Rio Tinto’s conduct, according to the report. -Nampa