Sanctions keeps Rossing’s Iranian dividends under lock…… N$331 million held in special account

Chamwe Kaira

Rossing Uranium has continued to keep dividends meant for the Iran Foreign Investment Company in a fixed account for fear of attracting United States sanctions.

“As at 31 December 2022, the amount held in the Escrow account was N$331 million,” Rossing Uranium Managing Director told Observer Money on Thursday.

Financial statements for the year ended 31 December 2022 revealed that the restricted cash equivalent relates to historic dividends that are payable to the Iran Foreign Investment Company (IFIC), shareholder.

The transfer of the funds was initially restricted in terms of the UN Security Council Resolution 1929, which was subsequently repealed by resolution 223.

However certain restrictions in terms of resolution 223 remain in place. Additionally, the United States through its Treasury Office of Foreign Office has identified IFIC as an entity controlled by the Iranian Government and added IFIC to its Specifically Designed Nationals and Blocked Persons List.

Under the US Executive Order, the release of these dividends to the IFIC could expose Rossing Uranium to secondary sanctions.

Rossing said its board has critically assessed this risk and resolved to continue to keep these dividends under escrow until a viable and legally acceptable pathway for the release thereof, without Rossing Uranium facing attracting sanctions can be found.

“The board will continue to this approach within the legal ambit on the remaining sanctions on the restriction. In the interim, at the request of the shareholder, the funds have been in a Euro denominated fixed deposit account. The euro deposit account remains under the control of Rossing Uranium Limited.”

Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met.

Rossing’s immediate holding company is CNUC Namibia Mining Limited, a company registered in Namibia. China National Nuclear Corporation Limited, registered in China, is the company’s ultimate holding company.

In 2019, China National Uranium Corporation acquired the majority shareholding in Rossing Uranium.

Apart from the Iran Foreign Investment Company, the Namibian government also owns a stake in Rossing Uranium. IFIC has owned a 15% stake in Rossing Uranium since 1979.

Namibia has two operating uranium mines (Rossing Uranium and Swakop Uranium, after the Langer Heinrich Uranium mine was placed on care and maintenance during 2018), which together provide 12% per cent of the world’s uranium oxide output.

In 2022, Rössing Uranium produced 4.4% per cent of the world’s output. In 2022, Rössing Uranium celebrated 46 years of production.

The mine has a capacity of 4,500 tonnes of uranium oxide per year and, by the end of 2022, had supplied a total of 145,567 tonnes of uranium oxide to the world.

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