Quest for water: Namibia tables offer for water desalination plant
Windhoek – The Namibian government will buy Areva SA’s R3-billion-dollar water desalination plant in the country, instead of building own water desalination plant, to take ownership of water supplies in the semi-arid Erongo region.
Namibia will table an offer to wholly acquire the 20 million cubic metre water desalination plant, as it pushes to secure sources of water supply in the water starved region.
The move also comes after the government abandoned long-standing plans to build its own water desalination plant.
Areva, the world’s largest nuclear reactor builder, built the country’s first water desalination plant to secure supplies to its Trekkopje uranium project in the county.
Areva mothballed its Trekkopje uranium project in 2012, citing a slump in the prices of the nuclear fuel, in the aftermath of Japan’s Fukushima tsunami which triggered a nuclear meltdown.
“Cabinet has made a decision for us to acquire that plant, we are busy with technicalities before we make an offer,” Joseph Iita, Permanent Secretary in Namibia’s Ministry of Agriculture, Water and Forestry, said in an interview.
A negotiating team is being set up and the plant would be handed over to state owned water utility, Namibia Water Corp, once the deal is finalised, Iita said.
He said government’s intention is to assume full ownership of the plant on the basis that privately owned entities are legally not allowed to own water sources. “We can’t have water in the hands of a private company, it’s a resource that’s supposed to belong to the government,” he said.
Areva, which has previously hinted it intends to sell a majority stake in the plant, said it would only comment once the offer is made official. “Once we know what they want, when we have seen the offer, we will be able to comment,” Hilifa Mbako, Areva Namibia Managing Director, said.
Mbako has previously said that Areva would seek to retain a minority shareholding in the plant to guarantee water supplies to its own mining project, Trekkopje.
The plant’s supplies are critical to uranium mining companies operating the Namib Desert.
The plant is supplying about 10 million cubic meters of water to Paladin Energy’s Langer Heinrich Uranium mine, Rio Tinto Plc’s Rössing Mine and China General Nuclear Power Holding Corp’s Husab mine.
The water from the plant is sold to Namwater, the only entity allowed to own water distribution infrastructure in the country, for onward distribution to mining companies.
Whilst mining companies have complained of the high cost of water from the desalination plant, Areva has in turn countered that its prices factor in the cost of production and investment made into the plant.
The high cost of water from the Areva plant has prompted Rössing Uranium mine to launch a feasibility study on plans to build its own desalination plan.
Namibia is the largest uranium producer after Kazakhstan, Canada and Australia.
The Areva plant’s supplies are also critical to coastal towns of Walvis Bay, Swakopmund and Henties Bay.
The scarcity of water in the Erongo region has become a contentious issue as ground sources in the semi-arid region such as Omaruru Delta and Kuiseb River aquifers dwindle during to recurring droughts and rising demand. Government would also consider expanding the capacity of the plant in future to cater for increasing demand, Iita said.
“The plant has a provision for expansion and if we buy it, we can expand the capacity to above 20 million cubic metres, but of course, that’s in the future,” he said.