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Uranium takeovers bound to rise going into winter

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China eyes shale gas and uranium firms
CNOOC linked to backer of Blackpool shale gas firm Cuadrilla, while bid expected for uranium producer Kalahari Minerals
Terry Macalister
guardian.co.uk,
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Cuadrilla Resources' rig near Blackpool, where the firm is drilling the Bowland shale for gas. Photograph: Christopher Furlong/Getty
China's growing attempts to seize global natural resources has reached Britain with a link to the recent shale discoveries near Blackpool and a bid for a London-listed uranium company.
Close ties have emerged between China National Offshore Oil Corporation (CNOOC) and a backer of Cuadrilla Resources, the exploration group that claimed last month there were trillions of cubic metres of shale gas under Lancashire.
The Beijing-to-Blackpool link was revealed after the Hong Kong-based Kerogen Capital came to the rescue of one of the largest shareholders in Cuadrilla. Kerogen and CNOOC are behind a new $1.5bn (£1bn) fund, which is looking at investing in new resource projects. Kerogen, set up by former JP Morgan bankers Ivor Orchard and Jason Cheng, has taken a 15% stake in AJ Lucas – an Australian engineering business that holds about 40% of Cuadrilla.
Lucas has been struggling to raise new cash and needed to inject $10m in Cuadrilla to maintain its stake in a business that is also 40% owned by Riverstone – a private equity firm in which former BP boss, Lord Browne, is a key player.
Chinese companies have already bought into shale gas companies in the US, where a welter of discoveries has sent the price of natural gas plummeting. Cuadrilla made headlines when it claimed that two exploratory wells in the Bowland shale of Lancashire indicated huge reserves of 5.6tn cubic metres of shale gas.
Some academics have questioned the very high estimates, but Cuadrilla told the Guardian that it stands by those numbers, and made clear that Lord Browne, one of the most respected figures in the oil world, had endorsed them too in his capacity as a Cuadrilla board member.
Objections to shale operations focus on potential water contamination, due to the chemicals pumped into the ground with water to hydraulically fracture, or "frack", the rock and release the hydrocarbons. Green groups also fear that cheap gas will undermine government carbon-reduction targets and inhibit the nascent renewableenergy industry. The process has been banned in France and some US states but another company is also applying for drilling licences in Britain, this time in the Mendip Hills outside Bath.
Meanwhile, the state-backed China Guangdong Nuclear Power Group (CGNPG) is expected to launch a £650m takeover of a London-listed uranium miner, Kalahari Minerals, as early as this week.
Shares in Kalahari, which is listed on the Alternative Investment Market, rose 7% on Friday amid speculation about interests in the far east. Kalahari is of interest to nuclear operators because it owns a big stake in the Husab uranium mine in Namibia, one of the world's largest.
Despite the Fukushima nuclear disaster in Japan, China is still expected to proceed with its reactor construction programme – it already has 25 plants under construction, half of the world's new capacity.
CGNPG offered 290p a share for Kalahari Minerals in March, valuing the mining group at £756m, but the deal fell apart after the Chinese company tried to cut the price after Fukushima.
The tsunami led Japan, Germany and Austria to halt their new nuclear programmes or phase out reactors early, reducing uranium's value as a fuel.
China's Minmetals launched a $1.2bn offer last month for Anvil Mining, a copper producer with assets in the Democratic Republic of Congo.