WINDHOEK, Oct. 26 — After a prolonged stagnation for nearly a decade, the global uranium market rapidly revives. Demand for uranium is expected to remain high for a long time to come due to the need for new nuclear power plants that will be built during the global energy transition. Namibia with its’ large uranium reserves must not let this opportunity pass by. In the coming years, the country may strengthen its successes in uranium mining, achieved in the past decade despite the downturn in the market.
Who Will Get the Expanding Uranium Pie?
Over the past two months, the exchange value of uranium oxide U3O8 has grown by 56%. By the end of September spot prices for natural uranium topped $ 50 for a pound. The market has not seen such quotes for nine years for the first time since 2012. Given the global shift toward cleaner energy production, reduced carbon emissions, and reliable long-term energy sources, uranium supply is becoming more important to utilities worldwide, points out UXC Ltd, a leading Australian consultant in the nuclear sphere.
Such a rise in prices is due to the new global market player, the Sprott Physical Uranium Trust (SPUT), analysts say. Established by the Canadian Uranium Participation Corporation and Sprott Inc., in August the foundation has increased its reserves from 19 million to 28.6 million pounds of U3O8. This signals a confident recovery of the uranium market and the decisive overcoming of the crisis that arose after the accident at the Japanese nuclear power plant Fukushima in 2011.
According to the latest Red Book, a biennial joint publication by the Nuclear Energy Agency of OECD and the International Atomic Energy Agency (IAEA), Namibia holds fourth place in the global uranium club after Kazakhstan, Canada, and Australia.
Namibia solidified its position as the Husab project ramped up production after start-up in 2016 while other African nations reduced its’ output. These mine closures and production reductions in Niger, Malawi, South Africa, and elsewhere were the results of a prolonged period of low uranium market prices.
Today there’s every reason to expect that Namibia will be able at least to maintain its position among the global leaders in the uranium industry. As of the end of 2018 total identified in situ conventional resources in Namibia amounted to 630.3 thousand tons of Uranium. Namibia’s identified uranium resources are about 5% of the world’s known total, and this is quite enough for long-term leadership in Africa at least.
Let’s look through the world uranium production capability assessment to 2040 in the Red Book (Table on p. 67). Namibia with its’ expected 7200 tons of uranium per year from reasonably assured resources (RAR) and inferred resources recoverable at costs up to USD 130/kgU within two next decades can seriously strengthen its position in the world market. With potential open-pit uranium mines, Namibia is expected to remain a prominent supplier of uranium to the global markets next five years, according to GlobalData, a U.K.-based data analytics firm.
TOWARDS THE SAFETY OF EXTRACTION
The attractiveness of Namibia for international mining companies is determined not only by its large uranium reserves but also by a favorable regulatory environment. In January 2017, the Namibian government lifted the 10-year moratorium on new applications for exploration licenses for nuclear fuel minerals, and within just two next years 52 new licenses have been granted up.
During the same period, one of the largest deals in the global uranium industry in recent years took place in Namibia. In 2019 Rio Tinto sold its 69% share in Rössing Uranium Limited to the China National Uranium Corporation (CNUC), a wholly-owned subsidiary of government-owned China National Nuclear Corporation (CNNC). This significant player throughout the entire nuclear fuel cycle should assist in keeping the Rössing operation in production. China’s energy transition strategy is largely based on nuclear, which means that demand for uranium from Namibia will be kept at a high level.
The main reason for a decade-long moratorium on new uranium licenses was a serious concern about the water and energy requirements of uranium mining. Now with new policies and legislation, Namibia can count on uranium mining projects to attract only advanced technologies that do not critically damage the country’s fragile ecosystem.
The experience of developing uranium mines in other countries suggests that the best solution for Namibia is borehole in situ leachings (ISL) technologies that minimize damage to ecosystems. Back in the second half of the 20th century, this method developed by the Soviet and American researchers became an alternative to the traditional way of uranium mining – extraction of ore, its crushing, and processing. In borehole in situ leachings, the leaching agent is pumped through the ore, following which the pregnant solution is piped out to the surface for processing, with the ore remaining at its resting place.
As a result, the soil cover is almost intact, with no waste rocks (so-called dumps) formed, so there is no need to build tailings dumps with ore-processing waste. Therefore, the ISL is not only more economical than the traditional mining method, but also more environmentally favorable. Company Uranium One, the international mining division of the Russian State Corporation Rosatom, after receiving eight licenses for uranium exploration in Namibia in 2018, is ready to use its advanced ISL technologies for the extraction of this resource in the country.
IAEA has already recognized ISL as the most environmentally friendly and safe way to develop deposits. Nowadays ISL method is in active use in Australia, the USA, Russia, Kazakhstan, and Uzbekistan. Why not include Namibia in this list?
Not in the known person, finding himself or herself at the site of uranium mining by the ISL method will never guess that underground deposits are being developed on this territory. One won’t find miners here. Nothing is blown up, not crushed, not loaded with huge excavators.
There are no dumps and quarries. You can only see black pipes sticking out just one meter above the ground. Yellow ones with a smaller diameter are brought to rarely standing containers. Uranium is there.
To begin with, wells are drilled in places where uranium ore is deposited. Pipes are inserted, a solution of sulfuric acid is fed through them to a depth of about half a kilometer. It dissolves uranium, then the liquid saturated with it is extracted out by pumps.
Drop by drop the acid will be pumped out exactly as much as it entered the bowels, and the solution is reused. Therefore, in-situ leaching is considered the most effective method. It is associated with minimal losses, the safest and most environmentally friendly, cheaper than open-pit and mine mining. Here lies the future of the Namibian uranium industry.
From Sustainable Mining to Sustainable Energy
This August the high potential for uranium mining in Namibia has been reaffirmed. Western Australia-based Bannerman Energy confirmed the strong technical and economic viability of conventional open pit mining and heap leach processing of the Etango-8 uranium project. For life-of-mine production of 52.9 million pounds U3O8 over 15 years with an annual average production of 3.5 million pounds U3O8, the pre-feasibility finds an average final product cash operating cost of USD39.5 per pound. Pre-production capital expenditure is forecast to be $ 274 million.
According to the Bank of Namibia (BoN) forecast, the uranium mining sector is expected to expand by 8.5 percent and 5.7 percent in the following two years after a 5.2 percent contraction in 2020. Uranium holds its’ position in top-5 Namibian export commodities, and mining is in charge of national economic recovery after COVID-19, informed BoN Governor Johannes Gawaxab this June.
Uranium mining will provide Namibia with significant revenues for many years to come. Only Husab mine, purchased by China General Nuclear Power in 2012, is expected to generate roughly $ 200 million in government revenue annually — roughly 5 percent of Namibia’s total 2018 government revenue. The $ 5.2 billion project has the capacity to become the world’s second-largest uranium mine.
What’s next? Obviously, to remain just a supplier of uranium crude to the world market is a dead-end path for Namibia in the long term. Therefore, today the nation needs a serious discussion about the development of nuclear energy in the coming decades. Facing a severe energy crisis in 2021, more and more countries view nuclear energy as the most reliable source of energy in the long run.
For instance, after decades of underdevelopment, the UK government recently began negotiations to build a new nuclear power plant in Wales. Replacing coal-fired power plants with wind power has proven too risky, and gas prices are extremely volatile. Therefore, the peaceful atom can become the most profitable alternative in the process of the energy transition.
The problem of energy supply in Namibia is aggravated every year, but effective and sustainable solutions have not yet been proposed. Still, Namibia’s electricity supply is two-thirds provided by South Africa, which faces serious supply constraints itself. Before the COVID-19 crisis, the Namibian government has articulated a policy position of supplying its own electricity from nuclear power, and now it’s high time to refresh this idea.
The need to combat climate change is another incentive for the development of nuclear energy is. Of all the varieties of clean energy, nuclear power now appears to be the top priority option for African countries. If Namibia is already helping China to go green, why should it pass up such an opportunity for herself? – By Donald Matthys