African uranium miners plan to meet growing world demand for nuclear energy
By Antonio Ruffini, South Africa-based editor
An estimated 45 countries plan to introduce new nuclear power networks or expand existing ones in the foreseeable future. Meanwhile, demand for uranium has exceeded mined supply for a decade-and-a-half. The shortfall has been made up by inventories of uranium from decommissioned weapons, but this source is now largely exhausted.
At the same time, among the world’s largest uranium producers, Australia chose to restrict the number of operating uranium mines. And Canada restricted output because of concerns that grades in its uranium mines pose a radiation health risk to workers. Projects in South Africa, Namibia, Malawi and Niger have taken the opportunities presented.
In 2007, South Africa, which traditionally produces uranium as a by-product of gold mining, saw its first greenfields uranium processing plant commissioned in several decades. This took the form of Uranium One’s Dominion project. However, the 1,800 metric-ton-per-year (mt/y) uranium oxide (U3O8) acid pressure leach plant built by Bateman was later placed on care and maintenance because the mine was unable to deliver the planned ore at the planned grade.
Dominion was only the harbinger of other new projects in South Africa. Another company, Toronto and Johannesburg Stock Exchange listed First Uranium Corp., initialized uranium production at two South African operations with more success. In addition, a number of South African gold mines are looking at processing their tailings dumps for uranium, with low-grade high-tonnage projects by acid leaching mooted.
First Uranium’s two projects are Ezulwini, an underground mine located about 40 km southwest of Johannesburg; and Mine Waste Solutions (MWS), a tailings recovery operation located further to the southwest.
“Uranium projects are not easy to undertake, and our first plant has taken time to commission, but it is producing yellowcake now,” First Uranium’s Vice President-Investor Relations Bob Tait said, referring to the Ezulwini plant.
First Uranium expects to produce 1.2 million lb of U3O8 in its current financial year, which ends on March 31, 2010. This rate will double to almost 2.5 million lb in the 2011 financial year.
Average annual production over Ezulwini’s mine life until 2025 has been calculated at 1.1 million lb. And MWS, the tailings project, has 350 million mt of above-ground mineral resources from which it expects to process 19.4 million lb of U3O8 over its 14 year life of mine.
However, new uranium developments in South Africa, while relatively significant, fade in context when compared with its neighbor Namibia, which is turning into a major global uranium production center.
Namibian Expansion Plans
Namibia is already the world’s fourth largest producer of uranium, after Canada, Australia and Kazakhstan. The substantial gap between Namibia and the top three uranium producing countries could close quite rapidly though.
In June 2008, Namibia saw the biggest foreign direct investment in its history when French nuclear group Areva received the go-ahead for the Trekkopje mine 70 km east of Swakopmund. Trekkopje, an opencast mine, which is aiming to produce some 6.5 million lb/y U3O8, will come on stream in early 2010.
This will be followed by Canada’s Forsys Metals’ Valencia mine later in the year. Valencia mine is expected to produce 2.9 million lb/y U3O8 over an 11-year life-of-mine.
Areva has established a desalination plant to facilitate production of yellowcake in the arid country, and a second desalination plant has also been approved in principle by the government.
The two new projects will bring to four the number of uranium mining operations in Namibia. After forming the basis of the uranium mining industry in Namibia until a few years ago, Rossing Uranium, established in 1976 and located about 45 km northeast of Namibia’s main port of Walvis Bay, was joined by Australian-based Paladin Energy’s Langer Heinrich mine in 2005.
Rossing Uranium itself, after flirting with imminent closure earlier in the decade, raised its output to its highest level in 20 years in 2008. This open-pit operation, which mines at a depth of 350 m, produced just over 8.8 million lb of U3O8 that year, and expects to almost match that output for 2009. This makes Rossing the world’s third largest producer, after McArthur River in Canada and Ranger in Australia.
The current life of the Rossing mine is estimated to be another 12 years, though grades there, of about 250 parts per million (ppm), will continue to drop. This is because the highest grade portions of the orebody were picked out when closure of the mine seemed imminent in the early 2000s.
There are also a number of other projects which could come to fruition in Namibia. The most promising of these is the Rossing South property (also known as the Husab project) being explored by Australia’s Extract Resources.
Rio Tinto, the dominant shareholder in Rossing Uranium, holds a minority stake in the adjacent Husab deposit. Potential production at Rossing South has been estimated at 14.8 million lb/y, which would make it the world’s largest uranium producer.
Ambrian, which does research on the project, says when compared with peers in Namibia, Rossing South is the premier preproduction uranium asset in that country. A reason is the grade, which is likely to be above that of Rossing’s. The grade at Rossing South is well above the 140 ppm of Areva’s Trekkopje and the 105 ppm of the Forsys’ Valencia project. It is also superior to that of another promising project, Bannerman’s Etango property, with its initial resource of more than 100 million lb of U3O8.
Rossing South is on the same stratigraphy as the Rossing mine, but was not discovered earlier as it lies under some 20 to 30 m of sand. Mark Hohnen, executive chairman of Kalahari Resources, which holds a 40% share in Extract Resources, said that while Rossing Uranium is an obvious suitor for the Husab project, options are being kept open. He believed that, whoever the owners are, the project could be in production as early as 2011.
Len Jubber, CEO of Bannerman, suggested if that company’s Etango project is developed, it is targeting to have a mine in commission in 2012 or 2013. A scoping study completed in 2007 by Bannerman envisaged mining ore at 15 million mt/y, to produce 6.5 million lb/y of U3O8 over a life-of-mine of more than 12 to 15 years.
One of the features of the orebody is that at a low cut-off of 100 ppm of U3O8, the resource is about 110 million lb of U3O8—but double the cut off to 200 ppm, then the resource declines only to approximately 63 million lb of U3O8. Thus Etango represents consistent and shallow resources that, while not the highest grade, does look promising.
Southern Africa’s Potential
Southern Africa’s uranium mining industry has also expanded to new territory with Paladin, the successful developer and operator of Langer Heinrich, having commissioned its second uranium mine, Kayelekera. Kayelekera is situated in northern Malawi, 575 km north of the capital, Lilongwe. Together with its ongoing expansion at Langer Heinrich, this mine will enable Paladin to more than triple its 2.6 million lb/y of U3O8 production base in 2010. Langer Heinrich’s expansion involves increasing production to 6 million lb/y, with about a 17-year mine life.
Kayelekera, which represents the biggest single investment by a company in Malawi, was opened in 2009 on April 17. It will contribute up to 10% of the country’s GDP. That mine is expected to reach full production of 3.3 million lb/y by January 2010. The life-of-mine is nine years, with a 13-year project life, taking into account the low-grade stockpile. According to Paladin, Kayelekera and Langer Heinrich are the first two new conventional uranium mines to have been built from a clean sheet in the world in the past 20 years.
Niger Remains the Largest
And yet, for all the growth in uranium in Southern Africa, the Republic of Niger in the Sahel/Sahara remains strongly in the running to be Africa’s largest uranium producer. It contributed 7.6% of total world uranium production in 2007. It too is expanding production.
In May 2009, Niger’s president, Mamadou Tandja, laid the foundation stone for Areva’s Imouraren uranium mining complex. It is the most recent major uranium project to start development in Niger, with mining scheduled to begin in 2012. Imouraren’s projected output of 11 million lb/y of U3O8 will more than double the country’s annual output of this mineral.
In addition, China recently granted Niger a $95 million loan to boost another uranium mining project. The Somina uranium operation of the China National Uranium Corp. is due to come on line by 2010, with an annual output of about 1.5 million lb/y. China has committed to investing some $300 million in the project, which is at Azelik, in the northern Agadez region.
Niger already hosts two long-standing uranium operations, which sees uranium account for the bulk of the country’s foreign income. These mines, located at Arlit and Akouta in the north of Niger, are operated by French uranium company Cogema. Their maximum capacity is some 7.5 million lb/y of U3O8, and the output is purchased through special agreements between the Niger government and customers in France and Japan, which effectively subsidize the operations. Most of the output is either transported by air or road to Cotonou in Benin.
The Arlit mine in the Air Massif has a capacity of 3 million lb/y. The Akouta mine, situated 6 km to the south of the Arlit operation, has the capacity to produce 4.4 million lb/y. With the two new operations, Niger’s uranium output capacity will increase to some 19 million lb/year of U3O8.