Rio Tinto says Iran can keep stake in uranium mine

Fri Oct 29, 2010 2:19pm EDT

* Iran owns 15 pct stake in uranium mine in Namibia

* Rio Tinto says complying with UN sanctions on Iran

* Group says Rio Tinto may be violating U.S. law

By Louis Charbonneau

UNITED NATIONS, Oct 29 (Reuters) - Iran can keep its stake in a uranium mine in Namibia owned by Anglo-Australian mining giant Rio Tinto (RIO.AX)(RIO.L), despite new U.N. sanctions restricting such investments, the firm said on Friday.

U.N. Security Council resolution 1929, adopted in June, bans the sale of any stakes in uranium mines to Iran, as well as shares in any commercial operations linked to the production of nuclear materials or technology. It also says that "all states shall prohibit such investment."

Since 1975 -- before its 1979 Islamic revolution -- Iran has owned a 15 percent stake in the Rossing Uranium Mine in Namibia in southern Africa, one of the world's biggest open-pit uranium mines. Rossing Uranium Limited, majority-owed by Rio Tinto, sells its uranium to nuclear power plants in North America, Europe and Asia, including Japan.

"Rio Tinto has discussed the new United Nations Resolution 1929 ... with the governments of Namibia, the United States, the United Kingdom and Australia," Rio Tinto said in a statement. "We believe we are complying with the resolution."

"The government of Iran ... does not gain access to any nuclear technology through its investment, it has no uranium product off-take rights and all dividend payments have been frozen," said the statement, sent to Reuters by Rossing.

Council diplomats told Reuters that the latest steps clearly ban the sale of new stakes to Iran but are unclear on whether any previously held Iranian stakes in uranium mines or other nuclear-related operations should be divested.

One Security Council diplomat told Reuters on condition of anonymity that resolution 1929 appeared to apply only to new stakes, though others said that all mining firms might come under pressure from Western powers to disassociate themselves from Tehran, which is suspected of developing atomic weapons.

GROUP: 'VIOLATION OF U.S. LAW'

Iran insists its nuclear program is entirely peaceful and is intended to meet the nation's growing power needs. It has been hit with four rounds of U.N. sanctions but refuses to halt uranium enrichment work as demanded by the Security Council.

United Against Nuclear Iran (UANI), a U.S.-based non-governmental group that has been putting public pressure on businesses to break off ties with Iran, sent a letter last week to Rio Tinto warning it that the firm's majority ownership of the Rossing mine "appears to be a violation of U.S. law."

The Iranian stake in Rossing is held by the Iran Foreign Investment Company, which the U.S. Treasury Department added in August to its list of Iranian companies subject to U.S. sanctions for supporting Tehran's nuclear program.

"Iranian government personnel also have access to the facility, from which they can acquire valuable technical knowledge to advance the regime's nuclear weapons program," said UANI President Mark Wallace, a former U.S. diplomat.

U.S. officials have not commented recently about the Rossing mine. Five years ago, when Reuters first revealed the existence of the Iranian ownership stake in the Namibian mine, a U.S. official said the issue was "troubling."

At that time, Rossing told Reuters that Iranian government representatives routinely attended the mine's board of directors meetings. (Editing by Eric Beech)

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