Top China nuclear firm rescues Paladin Namibia uranium mine

* China National Nuclear Corp pays $190 mln for mine stake

* Stake values mine below broker valuations

* Paladin (HKSE: 0495.HK - news) shares gain 0.9 pct

By Sonali Paul

MELBOURNE, Jan 20 (Reuters) - China National Nuclear Corp has agreed to buy a 25 percent stake in Australian miner Paladin Energy Ltd's uranium mine in Namibia for $190 million, locking in supplies as Beijing builds new nuclear plants for cleaner energy.

CNNC is the bigger of two state-owned nuclear power conglomerates, controlling nine of the country's 17 reactor units and working on an ambitious reactor construction programme to help China ease its dependence on coal-fired power.

The deal marks China's second foray into uranium in Namibia, following China Guangdong Nuclear Power Corp's $2.3 billion acquisition of the Husab project in 2012.

The sale rescues Paladin, as it urgently needed to raise funds following three years of pain as uranium prices slumped after the Fukushima disaster, which killed Japanese demand for the fuel and led other countries to halt nuclear expansions.

"Paladin's out of the woods for the short to medium term. But longer term they need higher uranium prices to pay back their convertible note," said Simon Tonkin, an analyst at Patersons Securities.

Chief Executive John Borshoff said the deal with CNNC was at a better price than a range of offers Paladin rejected last year. However the price values the whole mine at $760 million, well below analysts' valuations around $900 million.

The company had little bargaining power with uranium prices hovering at $36.05, or nearly half the price they were at before the Fukushima plant was crippled in March 2011.

That disappointed investors, who first sent Paladin's battered shares up as much as 17 percent to a five-month high, then sold them down. The stock ended nearly unchanged at A$0.565.

CNNC's 25 percent stake in the Langer Heinrich mine, which has a capacity of 5.2 million pounds of uranium concentrate a year, will give it a quarter share of the mine's output and the option to buy further supplies from Paladin at market rates.

"I do believe ... CNNC and Paladin will develop a long-lasting business relationship which is beneficial to each other and also bring long-term influence to the global uranium mining industry," CNNC Director-in-General for geology and mining Du Yunbin said in a statement.

CNNC's acquisition is subject to approvals from Chinese authorities. Paladin expects the deal to be completed by mid-2014. CNNC did not respond to questions about the deal.

While Paladin has booked heavy losses, it is in better shape than rival Energy Resources of Australia Ltd (Other OTC: EGRAF - news) , controlled by Rio Tinto (Xetra: 855018 - news) , which had to suspend processing uranium ore after radioactive slurry leaked from a leach tank at its Ranger operation in Australia.

If the Ranger plant does not reopen by mid-2014, ERA will have to buy uranium on the market to supply its customers, which could help boost prices for producers like Paladin.