Uranium miner Berkeley Energia wins £93m backing from Oman

Aim-listed uranium miner Berkeley Energia has won $120m (£93m) backing from the sovereign wealth fund of Oman to finance construction of its mine in Spain.

The Gulf state will deliver the funding in instalments in return for taking a stake of up to 37pc in the company.

The first tranche of cash will come in the form of a $65m loan that will convert into shares worth 50p, giving the fund a 28pc holding in Berkeley. This will fund the remainder of the construction of the company’s mine near Salamanca in northwestern Spain.

Three further tranches will convert into shares at 80p a share, providing future funding to expand the mine’s capacity.

The fund will also enter an offtake agreement to buy around 20pc of the mine’s output when it begins producing in 2019.

The price of uranium, used in nuclear reactors, is currently at 10-year lows, but Berkeley is betting that prices will begin to rise as suppliers are driven out of the market.

Managing director Paul Atherley said: “We’re already seeing supply disruption in the uranium market. Kazakhstan [the world's second largest supplier] recently cut 10pc of its output and various other mines have shut or reduced production. These are precursors to the price improving over the next few years.”

He said Berkeley had been talking to a number of parties in China and elsewhere in Asia, where a raft of new nuclear power stations are being built, but said the Oman fund had simply offered the “best deal”.

Berkeley shares jumped 9pc on news of the deal, to just shy of the 50p price the Omanis are paying for their first stake.

Oman has been exploring options to develop a nuclear power programme since at least 2009 as it looks to wean its dependency on oil. However, it indicated in 2012, in the wake of the Fukushima accident, that it would put development on hold.

The sovereign wealth fund of Oman has an estimated $18bn in assets under management, Last year it invested £100m in Kenmare Resources, a producer of paint pigments, which is listed on the main London market.