Chinese up stake in Langer Heinrich
The pending deal between Paladin Energy Ltd and China Uranium Corporation Limited for the Chinese parastatal to acquire a 25% stake in the Australian company’s Namibian mine, Langer Heinrich, has been approved officially last week.
“Paladin Energy Ltd is pleased to advise that China Uranium Corporation Limited (a subsidiary of China National Nuclear Corporation – CNNC) has today notified the Company that it has received all required regulatory approvals and has satisfied the conditions precedent for the completion of the US$190 Million purchase of the 25% joint venture interest in the Langer Heinrich Mine in Namibia. Settlement will take place on 23 July 2014 and a high level CNNC delegation will be in attendance in Perth for the signing/settlement ceremony. The company nominated by China Uranium Corporation Limited as the party to the transaction is CNNC Overseas Uranium Holdings Limited,” said Paladin Energy Managing Director, John Borshoff.
Paladin Energy earlier in the year announced its intention to sell a 25% stake in its Langer Heinrich operation. Paladin then entered into an agreement with a wholly-owned subsidiary of China National Nuclear Corporation (CNNC). The off-take component of the agreement allows China National Nuclear Corporation to purchase its pro-rata share of uranium at the prevailing market spot price.
The agreement also contain a provision for Paladin to secure additional long-term off-take agreements with China National Nuclear Corporation.
It is expected that the agreement will enhance the long-term growth and development of the Langer Heinrich operation, Paladin Energy said.
Despite reporting a surge in revenue, Langer Heinrich reported a loss for its current financial year of approximately N$90 million.
Construction and commissioning of the stage 3 expansion has been completed and the project is now operating in excess of the nameplate level of 5.2 Million pounds per annum. The stage 3 expansion involved a new crushing and scrubbing circuit plus expansions to the leach, CCD, ion exchange (IX) and tailings disposal facilities.
A stage 4 expansion is also planned to increase production further. This expansion will not take place until the uranium price has increased substantially. A definitive feasibility study is currently underway and is expected to be completed in the future to potentially increase production and reduce plant head grade at a later date when the economics justify such additional investment, Paladin announced earlier in the year.
Various stages of expansion has resulted in a 20% increase in production. Production from Langer Heinrich totalled 2,401 tonnes yellow cake for the calender year 2013. Paladin Energy currently has six projects under development and two mines in operation, with its second mine in Malawi. Langer Heinrich is Paladin Energy’s first mine in Africa.
As at 2013, Langer Heinrich had employed 333 people, of which 90% is Namibian.