Uranium mining shows resilience during the COVID-19 crisis – Schneider
Uranium mining has proven to be one of sectors of the local economy that has shown resilience during the COVID-19 crisis, an executive said.
The long-term positive outlook of the uranium industry allowed Namibia to successfully manage a long period of depressed uranium prices.
The executive director of the Namibian Uranium Institute Dr. Gabi Schneider reiterated that the uranium industry has indeed proven to be resilient during the pandemic, as mining continued and the production figures for 2020 are only marginally lower than in 2019 before the pandemic.
She said uranium exploration also continued unabated, adding that after an initial period of minimal operations and maintenance during Namibia’s first lock-down, the mining industry was allowed to return to full production.
However, this was obviously subject to the various regulations that have been published by Government ever since. However, even before regulations were gazetted, the industry had compiled elaborate protocols themselves, which ensure that utmost attention is paid to avoid the risk of transmission at the work place and during commuting.
As an industry that is accustomed to putting, for example, strict measures of radiation protection in place, the uranium mines and explorers have the benefit of being used to strict health and safety procedures, she added.
The executive director added that while the uranium price has still not reached a level where more Namibian projects can become active, this is hoped for in the not too distant future.
She further stated that fuelled by this anticipation, many companies continued to invest into exploration programmes and have since established significant new resources, and consequently feasibility studies are under way.
One of Namibia’s uranium mines under care and maintenance, the Langer Heinrich Mine, invested in a restart plan, in order to be ready when the price reaches the right level.
On the mining side, Schneider said Namibia has had extraordinary investment by China Guangdong Nuclear Power Corp (CGNPC), which led to the construction of the Husab Mine, destined to become one of the largest uranium mines in the world, and most definitely the largest in Africa.
“Today, it is also the largest employer in the mining sector in Namibia, having created numerous new jobs. Secondly, CNNC’s investment in taking over the majority shareholding in Rössing Uranium is also a very significant investment, and the company continues to spend in developing the mine further. Both developments happened entirely during the long period of depressed uranium prices,” Schneider added.
Namibia is already the 4 th largest producer of uranium in the World. If the price can strengthen further, Namibia will be able to enter a new growth cycle and increase its share of the world market through the re-opening of mines under care and maintenance and the development of exploration projects into new mines,” Schneider noted.
In 2020 Namibia produced 6383 tons of uranium oxide. This is 84% more than in 2015 when the lowest point of production was reached in the midst of the decline in uranium prices after the Fukushima incident.
The next five years were a period of rapid recovery. The mature site of Rössing Uranium doubled production between in 2015-2020, and a the new Husab site saw a dramatic growth from zero up to 3894 tons of uranium last year. In terms of the world market share Namibia demonstrated probably the best result among the leading uranium nations. In 2015 with the total global output of 60304 tons, Namibia controlled just 5.7% of the market.
In 2020, according to Russian Kommersant business paper, the world production of uranium declined to 47500 tons, so the Namibian share raised to 13.4%. Most likely, Namibia will retain its positions in the world uranium market this year as well. Last August Kazatomprom JSC from
Kazakhstan, the biggest global uranium producer, announced its plans to cut production up to 2022 in order to recover losses due to the COVID-19 crisis. In Namibia the impact of the pandemic was relatively moderate because of the early implementation of safety measures, thereby ensuring operations continued with less disruption.
Meanwhile, last year the global production of uranium was 20500 tons less than the total consumption of all nuclear power plants in the world. The widening gap between supply and demand helped to reverse the long-term negative trend in uranium prices. Over the past three years the price for uranium oxide has increased by almost 26%, up to $32.10 per pound, and by 2025 some analysts consider $45 as a real possibility. Still, this is less than the levels just before the Fukushima incident, but now the prospects of nuclear energy are more optimistic as they were during the last decade.
Global energy transition becomes a new main driver in the market. Nuclear power provides more solid possibilities in order to reduce CO 2 emissions by the middle of the century alongside solar and wind power plants. Therefore, the International Energy Agency (IEA) recommends
quadrupling the pace of global construction of nuclear power by 2030, up to 24 GW per year.
Still highly promising deposits
Namibia’s identified uranium resources are about 7% of the world’s known total. Uranium minerals were first recognized in the Namib Desert in 1928. After massive test work, the Rössing Mine was opened in 1976 and proudly celebrates its 45th birthday this year.
At the beginning of the new millennium, when uranium prices reached an all-time high of US$ 134, extensive exploration was undertaken once again in the western Erongo Region of the now independent Namibia. Assisted by high-resolution airborne geophysical data provided by the Geological Survey of Namibia, this exploration led to the discovery of the Husab ore body, a world-class uranium deposit, currently being turned into the world’s second largest uranium mine.
Uranium deposits in Namibia are typically large and low grade. Total identified measured and indicated resources in Namibia amount to 550000 tons of uranium (tU) plus 189000 tons of inferred resources as of the end of 2020, This allows Namibia to remain attractive for international uranium mining companies.
New uranium projects are also upcoming. In 2018 international mining holding Uranium One, belonging to the Russian state corporation Rosatom, received eight licenses for uranium exploration in Namibia on an area of 8 thousand square kilometres, now work is in progress.
This June, Australian mining company Bannerman Resources CEO Brandon Munro talked about outstanding opportunities with it’s Swakopmund, Namibia-based Etango uranium project, as supply of the crucial nuclear commodity has grown into an expanding deficit over the past few years.
Chinese companies have taken major equity positions, notably with Husab.
In November 2018, Rio Tinto announced it had agreed to sell its majority stake in Rössing Uranium Limited to China National Uranium Corporation Limited (CNUC). Langer Heinrich Uranium has a minority Chinese shareholding.
Toward sustainable mining
Uranium mining is a transformative activity which has numerous economic, social and environmental impacts that can be both positive and adverse for communities, ecosystems or economies. ESG (environmental, social-economic and governance) aspects of the uranium mining production cycle are gaining increasing importance in Africa with it’s fragile environment and growing social tensions.
Back in 2006 to 2010, a Strategic Environmental Assessment was undertaken over the whole Namibian uranium province inland from Swakopmund and Walvis Bay. This addressed the entire region and all the projects, and resulted in a Strategic Environmental Management Plan which has been implemented by the government and individual project companies since 2011.
One of the many aspects of the plan is water supply, as mining requires water, although the Namibian uranium mining companies are champions in water recycling and conservation. The Rössing site for example requires about 3 million cubic meters per year, and the coastal towns also consume water to the tune of 5 million cubic meters per year for Walvis Bay and 4.6 million cubic meters for Swakopmund.
Moreover, during the last decade, Namibia faced severe droughts. In August 2016 the authorities declared a state of emergency since the drought was unparalleled. So far, the coastal area has been well supplied from the desalination plant built by a uranium mining company, but in the case of new projects coming on stream, additional desalination will be required.
Electricity shortage is another potential problem in the country. Namibia’s electricity consumption of some 3.8 TWh per year is two- thirds supplied by South Africa, which faces serious supply constraints herself. The government has articulated a policy position of supplying its own electricity from nuclear power, but so far there is no evident progress towards this goal.
Thus, the optimal strategic solution for the Namibian government is forging partnerships with companies that could offer the country help with the development of its own nuclear energy sector. From this point of view, one of the most promising investors is Rosatom with its vast experience in integrated solutions in nuclear technologies around the world. In 2018 Russian Foreign Minister Sergey Lavrov announced Rosatom’s readiness to sign an agreement on cooperation in the field of peaceful nuclear energy, which could open the possibility for the construction of one of the first African nuclear power plants in Namibia.
As was argued in a recent report for a webinar on African women’s contribution to socio-economic development through peaceful uses of nuclear energy, “with beneficiation very limited in the case of uranium, African countries need to ensure local benefits from the mining of uranium” and utilizing nuclear power could be such a local benefit.