Itochu interested in buying productExtract Says Itochu 'Interested' in Husab Uranium
November 04, 2010, 2:33 AM EDT By Jason Scott
(Updates with share price in seventh paragraph.)
Nov. 4 (Bloomberg) -- Extract Resources Ltd., the uranium explorer partly owned by Rio Tinto Group, said Japanese trading house Itochu Corp. wants to purchase production from its Husab mine in Namibia.
"Itochu is very interested in taking offtake," Chief Executive Officer Jonathan Leslie said in an interview in Perth today.
Extract, about 15 percent owned by Rio Tinto, aims to develop the world's second-biggest uranium venture after Cameco Corp.'s McArthur River mine in Canada. The company intends to gain from a nuclear-power revival as countries turn to the technology to meet energy demand and cut emissions.
Itochu agreed in July to buy a 10.3 percent stake in London-based Extract to benefit from global growth in demand for the fuel. It now holds 13 percent, according to data compiled by Bloomberg. The stake purchase "doesn't restrict us in any way, it just gives us more options," Leslie said.
The two companies are in talks about Itochu helping to develop the Namibian project's desalination plant, Leslie said.
Extract gained 3.2 percent to A$8.15 at the close in Sydney trading, while the benchmark S&P/ASX 200 Index rose 0.5 percent.
Feasibility Study Delay
The company said in June it aims to begin production in 2014. In an announcement earlier today, Extract said it was delaying the publishing of Husab's definitive feasibility study to 2011's first quarter from the final quarter of this year.
"It's been a very aggressive timetable," Leslie said. "We've made some rapid progress. We've got to make sure we deliver the project fully optimized. We need the time to make sure we get the result. Our shareholders would understand the importance of getting it right."
Uranium rose $1.50 to $53.50 a pound in the week through Nov. 1, Roswell, Georgia-based UxC Consulting Co. said in a report.
Uranium prices look "very strong" in the medium term, with recent gains on the spot market driven by producers failing to meet production targets, he said.
"We can see a gap opening up in the market in two to three years," Leslie said. "The belief is Kazakhstan is getting toward the end of the period where they've got the easy stuff, the low-hanging fruit, so their costs are going up."
--With assistance from James Paton in Sydney. Editors: John Chacko, John Viljoen.
https://www.businessweek.com/news/2010-11-0...ab-uranium.html