China’s scramble to secure long-term uranium supplies to support the rapid expansion of its nuclear power industry has led the state-owned CGNPC Uranium to make a 1.23 billion US dollars takeover bid for London-listed Kalahari Minerals.
The move has implications for ASX-listed Extract Resources and Rio Tinto. Extract is 42.8% owned by Kalahari and holds the uranium asset that the Chinese are interested in - the wholly owned Husab uranium deposit in Namibia.
Rio Tinto is also on high alert on news of the Kalahari bid. Rio owns 11.5% of Kalahari and 14% of Extract, with the Husab deposit sitting seven kilometers from Rio's Rossing uranium mine.
CGNPC said it was at the ''forefront of China's diversification from its reliance on fossil-fuel sources to provide cleaner, lower-carbon and environmentally friendly power to its growing population''.
The bid came as China said it would surpass the US as the world's biggest consumer of uranium by 2030. The Deputy Secretary for the National Energy Administration, Qian Zhimin anticipated that by 2020 nuclear energy will contribute 7% to 8% of the country’s total electricity generation.
China has 11 nuclear reactors in use and 13 under construction, and plans another 60 for 2020 each of which will be needing 400 tons of uranium per year to begin operations. In 2010 China, according to official figures, imported 17.136 tons of uranium, three times as much as in 2009.
China is investing heavily in nuclear energy to cut dependency on coal generating plants.