Paladin Energy, Extract Resources Seek To Calm Namibia Concerns

Uranium miners Paladin Energy Ltd. (PDN.AU) and Extract Resources Ltd. (EXT.AU) moved Friday to calm investors unsettled by the Namibian government's plans to increase the role of a state-owned mining company in the industry.

Shares in both companies have fallen in recent days after Mines and Energy Minister Isak Katali last week said uranium, copper, gold, zinc and coal have been declared strategic minerals to allow for exclusive exploration and mining of them by Epangelo Mining Co.

Paladin in a statement to the Australian securities exchange said it has discussed the matter with the Namibian government. "It is our understanding that the equity position and operations of Langer Heinrich will remain unaffected," it said.

Langer Heinrich, located at the foot of the Langer Heinrich Mountain in the Namib Desert, was bought by Paladin in 2002.

Extract, which is developing a uranium deposit near Rio Tinto PLC's (RIO) Rossing open pit mine in Namibia, separately said it would seek clarity from the government on its comments.

"The company believes that these statements have been taken out of context and reiterates that the government of Namibia continues to be supportive of Extract and the Husab uranium project," it said.

Despite the comments, shares in both companies fell Friday, and by 0338 GMT Extract was trading down 4.4% at A$7.24 after declining 9.9% the day before, while Paladin was down 2.9% at A$3.35.

Namibian President Hifikepunye Pohamba in his state of the nation speech Wednesday said he planned to introduce new mining legislation later in the year that would target strategic resources. "Legislation will be introduced to ensure that strategic minerals are exploited with the participation of the public sector," he said.

The comments come at a time when South Africa, from which Namibia gained its independence in 1990, is discussing a greater role for the government in the mining industry and the possible nationalization of assets. The nationalization debate is being driven by the youth wing of the governing African National Congress and has been dismissed by among others Susan Shabangu, minister of mineral resources.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]

(Devon Maylie in London contributed to this article.)