A local Chinese government agency in eastern China plans to take a controlling 51% stake in Australia's Northern Uranium Ltd. (NTU.AX) for A$15.7 million, according to a deal disclosed by the Australian uranium explorer Monday.
A local Chinese government agency in eastern
China
plans
to take a controlling 51% stake in
Australia
's
Northern Uranium Ltd. (NTU.AX) for A$15.7 million, according to a deal
disclosed by the Australian uranium explorer Monday.
Northern Uranium signed a binding letter of intent with Chinese mineral
explorer Jiangsu Eastern China Non-Ferrous Metals Investment Holding Co., a
unit of the East China Mineral Exploration and Development Bureau, or ECE,
which is a mining agency owned by the Jiangsu provincial government.
Government-backed agencies in
China
,
banned from operating as corporations, usually set up investment units as a
counter-party in transactions.
The investment will make the Chinese investor a cornerstone shareholder in the
Australian explorer and highlights the hunt to secure resources abroad by China
Inc.
Officials from ECE and Jiangsu Eastern China Non-Ferrous were not available for
comment Tuesday.
The deal still needs shareholder and regulatory approval, among other
requirements, according to the joint statement by both companies that was
issued by Northern Uranium.
ECE will acquire 108 million Northern Uranium shares at A$14.5 per share, the
statement said.
It said the funds raised will be applied to accelerate exploration of Northern
Uranium's uranium and heavy rare earth element prospects in
Western
Australia
and the
Northern
Territory
.
Chinese newspaper 21st Century Business Herald reported Tuesday that ECE may
team up with other Chinese state-controlled firms like China National Nuclear
Corp. or China Guangdong Nuclear Power Group to jointly develop the uranium
assets once reserves are proven, citing ECE head Shao Yi.
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