With Namibia tipped to become the world’s third-largest uranium producer by 2020, the recent scrapping of a 25% black-ownership clause will boost investor sentiment, says analysis and consultancy company Fitch Solutions commodities analyst Sabrin Chowdhury.
The country is currently the world’s fifth-largest uranium producer; Fitch Solutions forecasts that Namibia will produce 7 400 t of uranium this year.
The Namibian government decided in April last year to scrap an empowerment clause that requires companies to sell a 25% shareholding to “racially disadvantaged people” under the country’s New Equitable Economic Empowerment Framework Bill.
Chowdhury tells Mining Weekly that Namibia remains one of the more attractive destinations in Africa from an investment standpoint, owing to its solid infrastructure, openness to trade and strong legal framework.
The country has substantial unexploited uranium deposits, and Fitch Solutions expects production to grow rapidly as a series of high-profile projects come on line, she adds. These projects include the Etango mine, owned by uranium development company Bannerman Resources, which has started progressing the updated definitive feasibility study for the project as of February.
Fitch Solutions points out that with the Husab uranium mine – a joint venture between major energy corporation China General Nuclear Power Group and uranium producer Swakop Uranium – expected to ramp up to near-full operational capacity by the end of this year, stronger mining sector growth is expected to boost government revenues over the coming years.
China General Nuclear Power Group expects to produce about 5 000 t of uranium this year, which would amount to 67.6% of total uranium production in Namibia, up from about 3 000 t last year. Once fully operational, the mine is expected to have a yearly production capacity of 6 800 t/y over a 20-year mine life.
One of the key challenges to the achievement of the production targets will be Swakop Uranium’s growing record of poor safety at the site, Chowdhury notes.
She points out that the first fatality was recorded at the site in October last year, when an employee crashed a haul truck into a wall. Up to 500 employees stopped working in February, owing to concerns that unchecked explosives and detonators were at the mine site. The workers warned that if their concerns are not investigated promptly, the processing department, comprising an additional 1 200 workers would also suspend operations.
“Ongoing safety concerns at Husab may cause further stoppages ahead, which would pose downside risks to our uranium production forecast for Namibia,” she concludes.Creamer Media Deputy Editor: Features