Uranium sector to double in size

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TULIIKENI NDADI

The outlook for the mining sector in Namibia for 2019 and beyond, especially the uranium sector, remains fairly bullish with a bolstered uptick in uranium production.

Increased uranium production is expected to restore Namibia’s position as one of the top three uranium producing countries.

Standard Bank Namibia is excited to partner with clients operating in this vibrant sector, which is deemed to contribute not only to Namibia’s sustainable socio-economic development, but to the world’s clean energy sector, especially that of Namibian trading partners in China.

Namibia is currently ranked as the sixth largest producer of uranium, and the mines have reserves that are capable of producing 10% of the global output forecasted to 2035. Uranium production in the country is forecast to rise by 50% year-on-year in 2019, more than double the rate of expansion from last year’s 20%; largely due to the Husab open-pit mine’s production plans.

Husab mine, located within the Erongo Region of Namibia, is a partnership between Namibia’s only national mining company, Epangelo Mining, with a 10% interest, and Swakop Uranium with a 90% interest, in turn owned by one of the world’s leading clean nuclear energy producers; China’s China General Nuclear Power Corporation and the China–Africa Development Fund.

The open-pit mine has a production target of full capacity in 2019, with an expected output of 6.8 thousand tonnes (kt) per year, which amounts to more than double of Namibia’s 2017 uranium output of 2.9 kt. With this production output at the Husab open-pit mine, the Namibian uranium output will grow 50% year-on-year in 2019, allowing the country to leapfrog Niger and Australia and become the third-largest producer of uranium after Kazakhstan and Canada.

The closure of the Australian Ranger uranium mine where since production in the 1980s started, produced over 126 000 tonnes of uranium oxide, and the extended shutdown of the world’s biggest uranium mine, Canada Cameco, coupled with increased investments from Standard Bank Namibia, and the continued government support for the uranium sector, enables Namibia to be positioned as a significant contributor to the global uranium and clean energy sector.

Additionally, when Husab mine ramps up production and other uranium mines become active, uranium's contribution to the mining sector is expected to be as prominent as diamonds. Diamonds have over the years added well above 7% to GDP and to export earnings, bolstering Namibia’s foreign exchange earnings and reducing the deficit on the nation’s current account.

Also, the Namibian government recognises the strategic importance of uranium to the overall economy, and therefore plans to remain supportive to the industry as a whole. In doing so, the government has lifted a ten-year moratorium on new applications for uranium mines, and has removed the requirement for companies seeking mining exploration licences to be partly owned and managed by Namibians.

Such attractive and progressive policies have boosted investments into the mining sector, which rocketed to N$300 million worth of investments in 2017 for exploration. New proposed investments from China General Nuclear -Uranium Resources into their flagship Swakop Uranium Husab Mine and China National Nuclear Corporation with their proposed investment in the Rössing uranium mine are also expected to materialise.

Additional, a new feasibility study has been conducted by Paladin Energy Limited into restarting Langer Heinrich mine while other exploration activities are being conducted by Marenica Energy. These uranium prospects are anticipated to sustainably drive the medium-term and long term growth of the primary sector alongside the agriculture industry that is also expected to have an uptick from 2019 moving forward.

This is deemed to maximise the ripple effect of the mining sector and ensure more opportunities for Namibia and its people through direct and indirect positive impacts, especially on employment. Standard Bank Namibia, alongside the Namibian government, is excited about the prospects of the uranium sector as is evidenced by the monumental investments and exploration activities in Namibia.

Standard Bank Namibia is thrilled to support the development and the growth of the uranium sector in maximising the ripple effect of the mining sector for Namibia and contributing to one of the largest global power generation sectors with clean uranium energy.

- Tuliikeni Ndadi is a mining engineer with a master’s degree in international mineral resources management with Standard Bank Namibia’s Corporate and Investment Banking (CIB) division.