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Cameco, M'bishi pay $495 mln for uranium mine

TOKYO - Canada's Cameco Corp and Japan's Mitsubishi Corp said on Thursday they will jointly acquire Kintyre uranium exploration project in Western Australia from Rio Tinto Ltd for $495 million.

Cameco will take a 70 percent interest in the project for $346.5 million while the Japanese trading house will acquire the remaining stake through its Sydney-based wholly owned unit Mitsubishi Development Pty Ltd.

Based on its due diligence, Cameco, the world's top uranium producer, said the Kintyre project may have potential deposits ranging from 62 to 80 million pounds of uranium.

‘The Kintyre project is an ideal fit with Cameco's strategy to expand our base of quality uranium assets,’ Cameco Chief Executive Jerry Grandey said in a statement. ‘It adds potential for low-cost open pit production and further diversifies our uranium business geographically.’

As soaring oil prices and international attempts to reduce greenhouse gas emissions have put the spotlight back on nuclear energy, Japanese trading houses are also moving to take upstream equity stakes in natural uranium production.

Mitsubishi last year took a 50 percent stake in a uranium mining project in Canada from CanAlaska Uranium Ltd

Under the Kintyre project, uranium was first discovered in the area in 1985 but after extensive exploration that identified eight deposits it was placed in care and maintenance in 1988, when uranium prices declined below $12 per pound.

Rio Tinto put the property, 1,250 km (775 miles) northeast of Perth, up for sale in 2007.

Cameco said the deal is expected to close in August and is subject to ministerial approval in Western Australia and the execution of certain agreements with the Martu people, who are the traditional owners of the land.

Cameco said it has experience working with the Martu through its ongoing exploration programmes.