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By Brigitte Weidlich
The worldwide scramble for energy sources due to dwindling fossil fuel reserves has placed renewed emphasis on nuclear energy as solution for future needs. As a result, Namibia in south-western Africa is experiencing a uranium boom.
With around 3,800 tons of annual production, Namibia is the world’s sixth largest uranium producer. Its delivery of seven percent of world uranium production has led to the country being wooed by big powers that wish to secure supplies for their nuclear energy expansion plans.
Spot prices doubled in 2007, reaching 136 dollars per pound but recently levelling at around 82 dollars a pound.
Currently over 40 foreign companies obtained exclusive prospecting licences (EPLs) from Namibia’s mines and energy ministry (MME). Two uranium mines are operational and 12 more are in the pipeline.
The MME has in the meantime stopped issuing EPLs and will lift the temporary ban only once it has drafted a nuclear policy with the help of the International Atomic Energy Agency (IAEA). Once the policy is completed, a law on nuclear energy will follow.
‘‘The interest in uranium is a boost for Namibia’s economy,’’ says Joseph Iitha, MME permanent secretary. ‘‘The increase in local uranium mining enables Namibia to contribute towards resolving the global energy shortage.’’
French nuclear group Areva managed to slip through the ban on EPLs. The company bought local company UraMin and the EPL was part of the deal. Areva plans to invest 750 million dollars to create one of the world's largest uranium mines in Namibia.
‘‘Construction has started and production is planned towards the end of 2009,’’ Iain McPherson, manager of Areva's local subsidiary UraMin, says. UraMin will process 100,000 tonnes of ore per day to extract about six to eight million pounds of uranium per annum.
The mine will have a lifespan of some nine years. The deal caught the Namibian government off-guard. ‘‘Government will undertake measures that this will not happen again,’’ said Prime Minister Nahas Angula after the 2,5 billion dollar deal was announced.
Namibia, rated by US minerals advisors Behre Dolbear Group this year as twelfth among 25 mineral importers to the US, has been pursued by investors since 2007.
China’s premier Hu Jin Tao and Russia’s (former) prime minister Mikhail Fradkov discussed energy matters while Japan and recently India have expressed interest in buying processed uranium – also called yellow cake – from Namibia.
India’s minister of state for commerce, Jairam Ramesh, discussed uranium supply during his visit in April this year. India is restricted from importing uranium from the 45 nuclear supplier group (NSG) countries because it is outside the nuclear non-proliferation treaty.
Namibia and Niger, along with Uzbekistan, are the three major non-NSG countries producing sizeable amounts of uranium.
Namibia’s oldest uranium producer, Rössing Uranium – in operation since 1976 with around 3,400 tons annually – started exporting an undisclosed amount of uranium to China in 2006, while its remaining exports go to the U.S. (30 percent), Japan (28 percent) and the European Union (13 percent).
Rössing is a subsidiary of British mining giant Rio Tinto and is one of the largest open pit mines in the world. It was doomed to close in 2009 due to low spot prices but the unexpected boost for uranium, which started two years ago, resulted in a turnaround strategy. The mining area has been expanded and the mine’s life span is predicted to last until 2021.
Rio Tinto owns a 68 percent stake in Rössing, the government of Iran 15 percent, South Africa’s Industrial Development Corporation (IDC) 10 percent and the Namibian government has three percent. The latter however holds 51 percent when it comes to voting rights.
A second mine, Langer Heinrich Uranium, a subsidiary of Australian company Paladin Energy, started operations in December 2006 and has produced 348 tons of processed uranium with a target of 1,000 tons for 2008.
Canadian Forsys Metal Corporation was granted Namibia’s third uranium mining licence in August for an open pit mine on the farm Valencia, almost the size of the nearby Rössing mine.
To get at the ore, 122,4 million tons of waste rock have to be moved. The final pit will be 1,400 metres long, 700 metres wide and 360 metres deep.
Forsys Metals entered into a memorandum of understanding with South Korean company Korea Electric Power Corporation (Kepco) as both companies mull possible joint venture arrangements for the future exploration and development of Valencia.
Namibia imports about 50 percent of its electricity from neighbouring South Africa, which experiences dwindling supply against rising energy demands locally and in the southern African region.
Russia has offered to build a nuclear power plant in Namibia as Moscow seeks to break into the African nuclear market. Russia’s nuclear chief Sergey Kiriyenko, head of Russia’s atomic energy agency Rosatom, said last year that Russia was looking to build a floating nuclear power plant for Namibia to secure local electricity demand and for exports to South Africa.
‘‘We are ready to build one,’’ Kiriyenko said when he accompanied Russian natural resources minister Yuri Trutnev to Namibia in February 2007. Russia is pioneering efforts to build offshore nuclear power plants, shrugging off criticism by environmentalists who say they are inherently unsafe.
Already in July 2006, Russian VTB Bank and Namibia’s private company Capricorn Investment Holding set up a joint venture in Namibia. Under the contract, VTB's share in the authorised capital of VTB Capital (Namibia) (PTY) Ltd. will be 50 percent plus two shares.
However, the expanding uranium mining activities in the Namib Desert require huge volumes of water.
The state-owned water corporation NamWater cannot supply sufficient amounts of water and agreed that Areva subsidiary UraMin constructs a 15 million cubic metre per year desalination plant at the coast, which is progressing rapidly.
‘‘We have to respond to the challenges of supplying water in a desert environment and government has decided that all NamWater mining clients, old and new, must be supplied with desalinated water in future. We aim for early 2010,’’ NamWater chief executive Vaino Shivute told local reporters at a recent briefing on the project.
Environmentalists are worried about huge water pipelines soon criss-crossing the scenic Namib Desert. They fear the pace of the uranium boom is detrimental to the area’s ecology.
Environmental non-governmental group Earthlife Namibia called for greater public consultation between government and the public before the MME approves new uranium mines.
‘‘We want the processes of the Areva mine to be transparent and to have no secrecy about their plans and operations,’’ Earthlife Namibia spokesperson Bertchen Kohrs says.
‘‘We do not want to see our government approving new mining licences with the same horrible speed that it did with the Langer-Heinrich mine. They must give the public a fair chance to respond to the findings of the environmental impact assessments (EIA),’’ demands Kohrs.
The MME is about to develop a mining charter which includes a black economic empowerment content. Foreign mining companies will have to give shares to previously disadvantaged Namibians in future, once the charter is finalised.
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