China gets first toehold in Canadian uranium
HONG KONG, Jan 10 (Reuters) - Chinese steelmaker Sinosteel Corp has signed a memorandum of understanding with small Canadian explorer Ditem Explorations (DIT.V) that could lead to it taking an equity stake in the firm.
Ditem said it had signed the deal with Sinosteel last month, providing the groundwork for exploration of its uranium properties and new properties in the Athabasca basin.
A source with knowledge of the deal said Sinosteel planned to take just under 10 percent of Ditem, which has a market capitalisation of about $32 million, although the share price for the investment had not yet been finalised.
China's appetite for energy and metals has driven an acquisition drive abroad by its domestic firms, while its economic growth has supercharged commodities prices over the past few years.
Uranium acquistions are high on China's wishlist, and prices UX-U308-SPT have also gained from global demand, mine disruptions and falling inventories. The price hit a record high of $136 per pound last year and has since fallen back to $90, still more than 12 times its price of around $7 in 2000.
The deal with Ditem comes almost a year after Sinosteel secured China's first foothold in Australia's uranium market by sealing a joint venture deal with PepinNini Minerals Ltd (PNN.AX).
(Reporting by Tom Miles, editing by Ken Wills)
