Russia makes lower offer for Mantra uranium

A subsidiary of Russia’s atomic energy agency has used Japan’s nuclear crisis to slash its planned takeover price for Australian uranium miner Mantra Resources by 12 percent.

Last week, the Russian Federal Atomic Agency’s ARMZ uranium producer withdrew its Aus$8 ($8.07) a share offer because of the problems at Japan’s Fukushima nuclear plant, saying they would affect Mantra’s business.

It has now offered Aus$7.02 a share, which values the company at Aus$1.02 billion.

Mantra advised shareholders on Wednesday to accept what was on the table “after taking into consideration the current global equity market conditions and increased uncertainty for the uranium sector”.

ARMZ is interested in the Perth-based company because of its flagship Mkuju River project in Tanzania, which has an estimated 39,000 tonnes of uranium reserves.

The initial terms of the takeover agreed in December envisioned the Russian firm building a new uranium plant in Tanzania whose initial annual production run of 1,400 tonnes would eventually be expanded to 2,500 tonnes.

Mantra Resources also has uranium holdings in Mozambique.

ARMZ is the world’s fifth-largest uranium producer and also has the world’s second largest uranium reserves.