Rio stops $140m sale of its US uranium mill -

RIO Tinto has placed a big vote of confidence in the future of the booming uranium market by rescinding a six-month-old offer to sell a US uranium mill for $US110 million ($140 million).
In July, Rio decided to negotiate exclusively with the dual-listed Canadian and South African miner SXR Uranium One to sell its Sweetwater uranium mill in Wyoming and associated properties in return for cash and SXR scrip.
SXR is best known in Australia as the owner of the Honeymoon deposit in South Australia, which recently won approval for export and development into Australia's next uranium mine.
But with a spot uranium price of $US72 a pound, up from about $US46 a pound when the deal was signed in July, Rio decided to re-evaluate its decision to sell.
"In light of the fundamental change on the uranium market, we won't be extending our agreement," Rio spokesman Ian Head said. "We're reassessing our options with regard to the property."
Mr Head said the options could include Rio developing the project on its own.
Sweetwater has not milled any uranium since it was placed under care and maintenance in 1983. Through its US subsidiary Kennecott, Rio also owns the Green Mountain uranium deposits in Wyoming, which were part of the package to be sold to SXR Uranium One.
Given the rise in uranium prices, Rio, which controls the Ranger mine in the Northern Territory and the Rossing mine in Namibia, has also been taking another look at its large Kintyre deposit in Western Australia.
Although the WA Government has banned all uranium mining in the state, Rio has been speaking with Aboriginal landowners about the project in case the uranium ban is overturned. But at this stage, Mr Head said any development timeline would be "hypothetical".
■ Rio yesterday approved the development of the $950 million Clermont thermal coalmine in central Queensland in a joint venture with Japanese partners. Rio will own 51.1 per cent of the mine, which should open in 2010 and produce 12.2 million tonnes a year when it reaches full capacity in 2013.
The project will replace production from Rio's Blair Athol mine 15 kilometres to the north-west, which is running out of reserves.
Rio shares closed $2.14 higher at $71.64 yesterday