home Equities A.BKY: Oman wealth fund bets $120m on uranium miner Berkeley Energia

A.BKY: Oman wealth fund bets $120m on uranium miner Berkeley Energia

Oman’s sovereign wealth fund has agreed to invest up to $120m in miner Berkeley Energia to help it finish construction of a uranium mine in Spain.

The injection gives the fund the option to own around 37 per cent of the company, which is developing the Salamanca uranium mine, about three hours west of Madrid. The company expects the mine to start production in early 2019.

Berkeley Energia says the project will offer about 4.4bn pounds of uranium a year when up and running. Kazakhstan is currently the world’s biggest producer of uranium, a fuel used in nuclear power after processing.

After jumping to a high of $136 a pound in 2007 uranium prices have fallen to $20 a pound. While China has an ambitious plan to build more nuclear power plants, other governments have cooled on nuclear power in the wake of the Fukishima nuclear disaster in Japan in 2011.

Berkeley Energia says the Salamanca mine will have a cost of production of $15.06 per pound.

Oman’s investment includes an interest-free unsecured loan of $65m, which can be converted into ordinary shares at 50 pence per share upon commissioning of the mine, as well as options that can be exercised at an average price of 85 pence per share, contributing a further $55m.

Shares in Berkeley Energia are up 9.4 per cent at 49.16p.

The sovereign wealth fund will own around 37 per cent of the company if it converts the loan and options, and has the right to appoint a non-executive director and become an offtake partner.

Source: Financial Times

Leave a Reply

Your email address will not be published. Required fields are marked *