Updated: 2012-02-02 07:49

By Liu Yiyu (China Daily)

BEIJING - China Guangdong Nuclear Power Corp (CGNPC) moved closer to gaining control of Kalahari Minerals PLC, which holds an indirect interest in the world's fourth-largest uranium mine, the Husab project in Namibia. 

That's after Rio Tinto PLC - Kalahari's fourth-largest shareholder - agreed to sell its approximately 11.1 percent stake in the UK company to CGNPC. 

CGNPC Uranium Resources Co, the resources arm of CGNPC, declined to comment. 

"CGNPC has moved closer to its target," said Monica Sun, senior associate at the international energy group at Herbert Smith LLP, which advises on cross-border energy and resource deals. "This is a significant deal for CGNPC, as the seller controls abundant uranium resources," Sun said. 

In January, CGNPC and its partner China-Africa Development Fund said they had secured a 30.8 percent stake in the London-listed Kalahari. Rio Tinto's shareholding would put the partnership's combined stakes at roughly 42 percent. However, the bid must gain the approval of more than 50 percent of Kalahari's shareholders. 

Kalahari has a 42.74 percent interest in Extract Resources, the owner of the Husab uranium project in Namibia. Analysts say Husab has the potential to become the world's second-largest uranium mine. 

The successful acquisition of 50 percent of Kalahari would trigger an offer of $8.90 for each share for Extract, valuing the company at around $2.2 billion. 

Last year, CGNPC retreated from a bid to acquire Kalahari after the UK's Takeover Panel said it would not allow the Chinese company to lower its 756 million pound ($1.2 billion) offer after a nuclear crisis in Japan, following the March 11 earthquake and tsunami, sent the target's shares plunging by at least 20 percent. 

However, buying opportunities continue to emerge, driven by perceptions of a floor to the uranium spot price holding at around $50 a pound (0.45 kg), and by the recent emergence of strong strategic investor interest and acquisition activity at the large-scale end of the market, according to the latest report by Resource Capital Research Pty Ltd. 

The dynamics driving the near-term sector outlook continue to be dominated by the aftermath of the Fukushima incident, the report said, and uranium traders will remain cautious going into the first half of this year. 

China imported 13,252 tons of uranium from January to November last year, compared with 14,136 tons in the corresponding period of 2010, the latest statistics showed. 

China's uranium production capacity is 850 tons annually and will reach 2,500 tons in the future, according to The Ux Consulting, a uranium-focused researcher. China has 13 nuclear reactors in operation and another 27 under construction. 

CGNPC has the biggest number of nuclear projects currently under construction globally and is expected to become the world's largest nuclear developer over the next 10 to 15 years. 

China is expected to lift the suspension of new approvals for nuclear projects in the first half of 2012,with a revised generation target of 70 gigawatts by 2020.