VZCZCXYZ0002
PP RUEHWEB

DE RUEHWD #0159/01 1281129
ZNY SSSSS ZZH
P 081129Z MAY 09
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC PRIORITY 0495
INFO RUEHSA/AMEMBASSY PRETORIA PRIORITY 5271
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0071
RUEHUNV/UNVIE VIENNA PRIORITY 0007

S E C R E T WINDHOEK 000159 
 
SIPDIS 
 
STATE FOR ISN (RNEPHEW), IO/T, NEA; AND AF/S (EPELLETREAU) 
 
E.O. 12958: DECL: 05/05/2019 
TAGS: KNNP MNUC PARM TRGY ENRG EMIN ETTC IR WA
SUBJECT: NAMIBIAN GOVERNMENT AND ROSSING REAFFIRM NO 
URANIUM SALES TO IRAN 
 
REF: A. WINDHOEK 65 
     ¶B. 08 WINDHOEK 239 
 
Classified By: AMBASSADOR DENNISE MATHIEU for 1.4 (b) and (d). 
 
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Summary 
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¶1. (S) Namibia's Rossing Uranium mine has been in production 
since 1976, and since its establishment the Government of 
Iran (GOI) - then under the Shah - has maintained a financial 
stake in the operation.  Today, the Iran Foreign Investment 
Company (IFIC) maintains the GOI's 15 percent stake.  Like 
other shareholders, IFIC has no off-take rights (rights to 
the uranium oxide).  Australia's Rio Tinto, which has a 69 
percent equity position, has full control over production. 
The Government of Namibia (GRN) has a three percent stake, 
but controls 51 percent of the voting rights.  Namibia's 
Prime Minister and other senior government sources have 
reassured us that the GRN supervises all licenses and uranium 
sales, and is committed to abiding by international 
agreements (UNSCR 1737) which prohibit the sale of nuclear 
fuel to Iran.  Rio Tinto officials also take seriously those 
international prohibitions, emphasizing to us and our British 
counterparts in Windhoek that they have no intention of 
providing uranium to Iran.  A sale to Iran would jeopardize 
Rio Tinto's business and put at risk the entire uranium 
sector, a sector which is increasingly important to the 
Namibian government's revenues, the country's export 
earnings, and overall gross domestic product (GDP).  End 
Summary. 
 
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Rossing Mine Ownership 
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¶2. (SBU) Rio Tinto has a 69 percent equity stake in the 
Rossing mine.  The Iranian Foreign Investment Company (IFIC) 
- a state-owned enterprise - maintains a 15 percent stake. 
The GOI, under the former Shah of Iran, acquired its holdings 
in Rossing in the early 1970's.  South Africa's Industrial 
Development Corporation (IDC) has a 10 percent interest. 
Individual shareholders have a combined three percent stake. 
The GRN has a three percent equity position, but retains a 
majority voting right (51 percent). 
 
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Off-Take Rights 
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¶3. (SBU) Despite its 69 percent ownership, Rio Tinto fully 
controls the operation of the Rossing mine and the sale of 
product.  Other shareholders, the IFIC included, have no 
uranium product off-take rights.  A chart in Rio Tinto's 2008 
annual report (page 110) has generated some confusion because 
it shows that Rio Tinto's share of Rossing's production as 
only 6,419,000 pounds of the total 8,966,000 pounds of the 
yellow cake produced.  This chart simply reflects Rio Tinto's 
69 percent equity stake in Rossing (6,419,000 is 69 percent 
of 8,966,000).  Rio Tinto still maintains full control over 
the production and sales of the yellow cake. 
 
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No Sales to Iran 
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¶4. (S) On February 25, Prime Minister Nahas Angula assured 
the Ambassador that the GRN would abide by its international 
obligations, including UNSCR 1737 (ref A).  In a July 30, 
2008 meeting with the Minister of Mines and Energy Erkki 
Nghimtina, Nghimtina told Ambassador Mathieu that he must 
personally approve any shipment of uranium leaving Namibia 
(ref B).  At an April 2 meeting at the Rossing mine, Manager 
for External Relations Jerome Mutumba reiterated to emboff 
that Rossing has never sold product to Iran, that the 
GOI/IFIC had no off-take rights, and that the GRN supervised 
all of Rossing's sales.   Officials at the Namibian Chamber 
of Mines have told emboffs that the Ministry of Mines and 
Energy approves all licenses for uranium sales and that the 
GRN is committed to abiding by international agreements. 
 
¶5. (C) The Director of the Financial Intelligence Center at 
the Bank of Namibia (BoN) confirmed to us that the BoN 
prohibits payments to Iranian government-owned companies, 
meaning Rossing may not remit dividends to the IFIC.  The 
IFIC has apparently disputed the BoN's position.  Rossing has 
sought legal advice in the matter as it is caught between the 
 
BoN and its shareholder. 
 
¶6. (C) Rossing's Managing Director told Britain's deputy high 
commissioner to Namibia that he wishes to see IFIC divest its 
stake in his company.  Inquiries into the ownership 
arrangement have created an increasing burden on Rossing, and 
there are concerns that the company could one day be at risk 
of sanction despite the fact it has never sold product to 
Iran.  Legal issues currently encumber the sale.  The GRN 
would have to change a Namibian law to allow for the sale, 
and there are concerns that providing payment for the sale to 
the IFIC would somehow violate UNSCRs. 
 
¶7. (S) On April 27, the Egyptian ambassador (protect) 
informed Ambassador Mathieu that the Pretoria-based Iranian 
ambassador and the head of the Iranian Atomic Energy Agency 
visited Namibia April 14-18.  The Egyptian ambassador said 
that in his discussions with  GRN officials, he was told that 
Namibia would not sell uranium to Tehran because UN Security 
Council Resolutions prohibited it.  GRN officials have also 
pointed out that, even if their government was inclined to 
allow sales to Iran (which it is not), uranium mining in 
Namibia is controlled by private companies from the West. 
 
¶8. (C) Britain's high commissioner to Namibia is confident 
that Rio Tinto (Rossing) is committed to abiding by all 
international agreements as any violation could jeopardize 
Rio Tinto's business.  The deputy high commissioner reported 
that when Rossing considered expanding its customer base to 
India, Rossing's Managing Director first asked the UK High 
Commission in Windhoek whether the British government would 
have any objection. 
 
¶9. (C) Comment:  While the Iranian government may hope to 
purchase uranium via Rio Tinto's Rossing mine, all 
indications are that both the company and the Namibian 
government have no intention of selling any product to Iran. 
For its part, Rio Tinto takes seriously UNSCR restrictions 
and understands well that a delivery to Iran could jeopardize 
its business. The Government of Namibia is unlikely to put at 
risk its potentially most vibrant economic contributor by 
selling to Iran.  Uranium increasingly contributes to 
Namibia's government revenues and overall gross domestic 
product at a time when diamond mining - its historically most 
important economic driver -  is in decline and has been badly 
affected by the global financial crisis.  Uranium sales 
represented 22.5 percent of total 2008 exports and this 
percentage will likely increase substantially in 2009.  The 
GRN is keen to see further development of the uranium sector 
as evidenced by its issuance of over 30 new exploration 
licenses in the past two years. Furthermore, at least two new 
uranium mines will be coming on-line soon; the French-backed 
Areva Trekkopje mine - slated to be Namibia's largest uranium 
mine - will open in 2009 and reach full production in 2011. 
End Comment. 
MATHIEU