Rio Tinto has signed an agreement to sell its 68.62% interest in Namibia mine owner Rössing Uranium to China National Uranium (CNUC) for up to $106.5m.

Under the agreement, CNUC will make an initial cash payment of $6.5m at the completion of the transaction.

Rio Tinto will subsequently receive a contingent payment of up to $100m, linked to uranium spot prices and Rössing’s net income during the next seven years.

Additionally, CNUC is required to make further cash payment if it sells the Zelda 20 mineral deposit during a restricted period following completion.

Rio Tinto chief executive J-S Jacques said: “The sale of our interest in Rössing once again demonstrates our commitment to strengthening our portfolio and focussing on our core assets, which deliver sector-leading returns in the short, medium and long term.

“The open pit uranium mine produces and exports uranium oxide to nuclear power utilities around the world.”

“Rio Tinto has a long history in Namibia and I would like to thank the many people across Rio Tinto and the communities in which we operate who have contributed to the success of Rössing.”

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By GlobalData

The proposed sale comes after Rio Tinto completed an assessment of strategic options in relation to Rössing.

The open pit uranium mine produces and exports uranium oxide to nuclear power utilities around the world.

Last year, production from the Rössing mine stood at 4,652 kilopounds (klb), which includes 3,192klb of Rio Tinto’s share of mined uranium.

Subject to fulfilment of certain conditions, including regulatory approval, the closure of the transaction is expected to take place in the first half of next year.

Rio Tinto has been offloading non-core assets. In August, the company sold its remaining Australian coal mining assets for $3.95bn, including the sale of interests in the Hail Creek coal mine and Valeria coal development project to Glencore. The company sold an 80% interest in the Kestrel underground coal mine to a consortium of EMR Capital and PT Adaro Energy.