Australian uranium production company Paladin Energy has signed an agreement to sell its 25% joint venture (JV) equity stake in Langer Heinrich mine to China Uranium, a wholly-owned subsidiary of China National Nuclear Corporation (CNNC) for $190M.
The Langer Heinrich open pit mine is the company's flagship project in the Namibia Desert, about 80km east of Walvis Bay, Namibia.
Paladin said an off-take component of the agreement would allow CNNC to purchase its pro-rata share of product at the prevailing market spot price.
"There is also an opportunity for Paladin to benefit by securing additional long term off-take arrangements with CNNC, at arm's length market rates, from Paladin's share of Langer Heinrich production," a company spokesperson said.
The uranium deposit was discovered in 1973. The mine was unused for almost seven years but was re-launched for operations in 2007.
Langer Heinrich has a mine life of more than 20 years and is a technologically advanced project. The mine is currently operating above nameplate capacity with further expansion capacity.
The uranium mine produced 5.3 million pounds of output in the year up to 30 June 2013, and the company expects this to increase to 8.26 million pounds.
Langer Heinrich has a current design capacity of 5.2 million pounds of uranium concentrate per annum and, following successful optimisation and de-bottlenecking, Paladin is targeting 5.7million pounds of production in this fiscal year.
In August 2013, Paladin planned to divest its minority stake in Langer Heinrich mine and had been in negotiations with two nuclear power firms.
However, the company suspended the sale process as it did not receive an acceptable bid for the sale.