By Megumi Yamanaka
March 2 (Bloomberg) -- A Japanese venture led by Kansai Electric Power Co., the country’s second-biggest utility, agreed to pay $49 million for a 35 percent stake in a uranium project in Western Australia to meet growing demand.
Japan Australia Uranium Resources Development Co., a venture between three utilities and trading house Itochu Corp., will buy the share in the Lake Maitland project from Canada’s Mega Uranium Ltd., the miner said in statement on Feb. 27.
The announcement comes after Tokyo Electric Power Co. and Toshiba Corp. last month said they would buy stakes in Canada’s Uranium One Inc. Japanese utilities are stepping up efforts to buy shares in uranium mining projects as competition with China and India for the ore intensifies. Japan, the third-biggest nuclear generator, plans to add 13 more reactors in a decade, according to the Federation of Power Companies of Japan.
The Japanese utilities “will have access to uranium produced at Lake Maitland for their own use and Itochu will be able to participate in additional uranium off-take arrangements from the project,” Mega Uranium President Stewart Taylor said in the statement.
The Japanese partners, Kansai Electric, Kyushu Electric Power Co., Shikoku Electric Power Co. and Itochu, will pay for feasibility studies for the project and move ahead with the purchase if they show favorable results. The venture is expected to produce 23.7 million pounds of refined uranium, according to the statement.
Japan Australia Uranium in 2008 bought stakes in two uranium mining projects in South Australia.
To contact the reporter on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net; Antony Sguazzin at asguazzin@bloomberg.net.
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