First Reserve Corporation, an energy-focused private equity firm, and its partners AMCI Capital and Pamodzi Investment Holdings, announced on 10 January 2008 that they are picking up 60 per cent of the equity capital of a new uranium company in South Africa.

The new company, Cooke Section, is acquiring uranium and gold assets owned by Randfontein Estates Ltd, a subsidiary of Harmony Gold Mining Company Ltd. Randfontein will get $420 million for the sale. Harmony will retain a 40% interest in Cooke.

The new company will focus on developing both the uranium and gold resources of the mining assets. The Cooke assets include three operational gold mines, a gold milling plant, a large tailings dump with significant uranium content and lower-grade gold and uranium dumps. Uranium, a by-product of gold production from the mines, has accumulated in the dumps for over 20 years, and is today a significant above-ground resource which can be reprocessed and sold as a fuel source for the nuclear power industry.

According to Alex Krueger, managing director of First Reserve Corporation, "The business plan involves purchasing the existing gold mine infrastructure and tailings dumps and constructing a new large-scale plant to reprocess the dumps for the significant uranium content. The gold assets will provide near term cash flow and represent additional upside through redevelopment and expansion of the mines to produce both the gold and uranium resources."

At a planned production level of over 2.2 million pounds per year, Cooke would be one of the 10 largest producers of uranium in operation, according to First Reserve. Worldwide demand for uranium is expected to increase from 175 million pounds in 2007 to between 235 million to 275 million pounds by 2020 as a result of significant growth in nuclear power generation assets.

"The strategic plan for this investment is to create a platform for a new world-class uranium producer at a time when uranium demand is increasing substantially," said Jeffrey Quake, a director at First Reserve. "This investment also continues to expand First Reserve's coal and iron ore mining expertise to include uranium and gold commodities with attractive growth opportunities."

First Reserve Corporation, founded in 1983, has been building a broadly diversified global investment portfolio of companies in the various sectors of the energy industry. Since 1992, it has raised over $12.5 billion for its buyout-focused funds. The firm is currently investing from its most recent fund which closed in 2006 at approximately $8 billion.

AMCI Capital is a resources and energy focused private equity venture established in late 2006 with $800 million in capital commitments. It has operations in Australia, South Africa, Mozambique, China, Europe and America. Pamodzi Investment Holdings is the fund advisor to Pamodzi Resources Fund Advisor (Proprietary) Limited, or PRF1, South Africa's largest private equity fund. It has $1.3 billion in funds available for investment.

Investments in uranium assets in the world have been rising as uranium prices have soared. The price of the metal hit a record high of $136 per pound last year; while the price has since then declined to around $90, that level is still nearly 13 times the price in 2000.

Other developments include a likely offer from Rio Tinto for Canadian uranium explorer Xemplar Energy Corp., which announced recently that it had discovered one of the world's biggest uranium deposits in Namibia. Also, Ditem Explorations of Canada has signed a memorandum of understanding with steel giant Sinosteel of China for a possible equity investment in Ditem by the Chinese company. Ditem will use the investment to explore its uranium properties and new properties in the Athabasca basin of Western Canada.