News

February 05, 2009

Rio Tinto Adopts Some Questionable Tactics In Its Efforts To Get Its Hands On The Rossing South Uranium Discovery

By Charles Wyatt

“Devious” and “duplicitous” are not words you often find used in any description of Rio Tinto. At the time the bid from BHP Billiton came in, Rio appeared more like a gentle old elephant which did not quite know where it was going after taking a stunning blow to the head. And now it has picked on quite an opponent in Mark Hohnen, executive chairman of Aim-traded Kalahari Minerals. He is determined that, no matter what tactics Rio Tinto adopts, it will not get its hands on the Rossing South uranium project on the cheap. The attraction for Rio, of course is that Rossing South lies just seven kilometers south of its own Rossing mine, down in Namibia. ASX-listed Extract Resources is the owner of the Rossing South discovery, which is part of the Husab uranium project, and Kalahari Minerals has a 39 per cent shareholding in Extract.

The current situation is that Rio Tinto has a 15 per cent holding in Extract and a 13.9 per cent interest in Kalahari. At one time there was a plan that the two smaller companies might merge. This came to nothing when it was realized that Rio Tinto would end up with too big an interest in the merged company. Kalahari then requisitioned an EGM to remove Bob Buchan as chairman of Extract as he favoured some sort of deal with Rio Tinto. It was also felt that Bob’s plan to promote the company in...