Looking into the future – Husab forges ahead with development

Windhoek ‑ China Guangong Nuclear Power Company (CGNPC)’s Husab uranium mine in Namibia is forging ahead with developing the mine and is on track to ship first product in the last quarter of 2015 despite the price of uranium hitting its lowest since 2005.
CGNPC owns a 90 percent stake in Swakop Uranium, the company developing Husab, the largest, highest-grade uranium-only deposit in Namibia and fourth largest uranium deposit in the world.
Husab construction is 25 percent complete and management is targeting to start pre-stripping 2014 second quarter.
The mine will have stockpiled one million tonnes run off mine by mid-2015, during which it expects to cold commission an agitated acid leach processing plant, Swakop Uranium spokesperson, Grant Marais, told The Southern Times.
Husab will ship first product in the last quarter of 2015 and gradually build up production to desired nameplate production of 15-million pounds of uranium oxide in 2017, Marais said.
“We are on track to start exporting our product in the last quarter of 2015.
“The mine will gradually build up production and should reach nameplate production rate of 15-million pounds of uranium oxide per year in 2017,” Marais said. While current price of uranium “is not supportive of new projects start-ups”, Husab believes that ‘price will increase substantially in the medium and long term’.
Prices of uranium this week hovered around US$34.50 a pound, having hit the lowest since 2005.
The price of uranium hit its nadir in July 2013 since 2006, still reeling from the aftermath of a March 2011 earthquake in Japan that damaged a nuclear plant, triggering the closure of almost all of the country’s nuclear facilities.
“The current price of uranium oxide is most certainly not supportive of new project start-ups.
“The production costs of most mines are higher than the current spot price of uranium… in the short-term, the uranium price will remain at its current low levels. We believe however that the price will increase substantially in the medium and long term,” Marais said.
Areva Namibia Resources, a unit of French nuclear giant, Areva has pushed back construction of its Trekkopje uranium mine citing low prices of the mineral, used to generate nuclear fuel.
CGNPC paid US$2 billion to take control of Husab last year as China’s second largest nuclear reactor builder sought to secure supplies for operations at home.
Husab is being developed as a large-scale open pit mining operation and its advantages lies in the size, high grade and accessibility of the deposit.
“Husab is blessed in that it has the big five any explorer would wish to find that is grade, depth, metallurgy, location and size. 
We are confident that the price will be substantially higher in 2017 when the Husab mine reaches nameplate production,” Marais said.
Water for the mine will be secured from Areva’s desalination plant and once in full production, Husab will require 7 million cubic metres of water from the plant Marais said.
“Permanent water will be desalinated water, either from Areva desalination plant or from a new desalination plant that will be built near Swakopmund,” he said.
The Namibian government owns a 10 percent stake in Husab mine through state-owned company, Epangelo Mining.
The Chinese firm has said that it is investing R20 billion in developing Husab.
Meanwhile, plans by Australian Stock Exchange listed Paladin Energy to sell a stake in Langer Heinrich Uranium mine in Namibia hit a brick wall.
Paladin failed in its plans to sell a stake in Langer Heinrich to raise US$78 million to bolster its financing. News agencies reports that Paladin was unlikely to get a price it wanted for the mine stake due to the slump in prices of uranium.
Paladin wanted to use the proceeds from the sale of Langer Heinrich stake to reduce debt and to strengthen its cash flow. The company has a debt of around US$700 million and its cash position has dropped to US$88.1 million by end of June from around US$112.9 million in second quarter 2013.
“Unless Paladin can significantly turn around its cash flow, it appears unlikely the company will have enough cash to be able to repay its debt, particularly at current low spot uranium prices,” said an analyst at JPMorgan Chase & Co.
August 2013
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