ARMZ Uranium Says Mantra Needs $400 Million for 2012 Startup

Dec. 16 (Bloomberg) -- Rosatom Corp.’s ARMZ Uranium Holding, which yesterday agreed to buy Australia’s Mantra Resources Ltd., said the Perth-based company needs as much as $400 million in investment to begin uranium output in late 2012.

Uranium One Inc., the Canadian miner controlled by ARMZ, will operate Mantra and finance its capital spending, ARMZ Chief Executive Officer Vadim Zhivov told reporters today in Moscow. ARMZ has said it may sell Mantra to Uranium One.

The A$1.16 billion ($1.15 billion) Mantra deal gives ARMZ access to the Mkuju River uranium project in Tanzania. The Russian company is seeking more uranium to supply planned nuclear reactors abroad as governments promote atomic power to meet energy demand while curbing carbon dioxide output.

ARMZ plans to become the world’s second-largest uranium miner, after Kazatomprom, as it expands into more territories, Zhivov said. It already has 6,000 metric tons of proven uranium reserves in Namibia, and said in May it’s ready to invest $1 billion in the African country, the fourth-biggest producer of the metal.

Uranium One’s Honeymoon mine in Australia, a venture with Mitsui & Co., will start in the first quarter of 2011, earlier than planned, Zhivov said. In Mongolia, ARMZ agreed this week to form a joint venture to develop the country’s biggest untapped uranium field, the Dornod resource.

--Editors: Amanda Jordan, John Deane

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net.

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net.

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