Reuters reported that China's move on Kalahari Minerals could flush out other bidders for the uranium miner but even long term suitor Rio Tinto may baulk at getting into a bidding war with such a formidable foe.

Any buyer would secure access to one of the world's biggest uranium deposits at a time when major powers, led by China are scrambling to secure alternative and increasingly scarce, sources of energy as oil prices surge.

Uranium is in particularly short supply with governments having to rely on material from decommissioned nuclear warheads to meet demand.

Kalahari said that China Guangdong Nuclear Power Holding Corporation had proposed USD 1.2 billion offer lured by London listed Kalahari's 43% stake in Extract Resources. The Chinese would be an excellent partner in developing the site and that it was ready to recommend any formal offer.

China has invested heavily in securing global commodities to fuel an economy that grew more than 10% in 2010. Companies have made USD 15.2 billion worth of overseas acquisitions of uranium companies alone since 2003.

Mr Ben Lyons an analyst at ATI Asset Management which owns Rio Tinto shares said that "Rio has flagged a willingness to undertake those sort of small to mid tier transactions. Rio Tinto, on the lookout for acquisitions worth USD 5 billion or less owns 14% of Kalahari. The mining giant declined to comment on whether it would mount a bid. Japan's Itochu Corp also owns 14% of Kalahari.

(Sourced from Reuters)