Kazakhstan is by far the largest uranium producing country, not exactly the safest source of supply! Given Russia’s activities in Ukraine and Russia’s influence in energy, (and in Kazakhstan for that matter), it would be unwise to rely to heavily on Kazakhstan going forward. Going down the line, who’s next? Well, Canada and Australia are large global suppliers, so that’s some good news. But, according to the following article– Namibia is poised to become the 3rd largest supplier of uranium later this decade. Namibia will be a top 5 producer along with Kazakhstan and another African nation, Niger.
China General Nuclear Power Holding Corporation (CGN) says its Husab uranium mine will catapult Namibia to the world’s third largest producer of nuclear fuel, past Niger and Australia by 2017. “Husab mine’s potential of 15 million pounds production is more than the total current uranium production of all uranium mines in Namibia combined, it will elevate Namibia past Niger and Australia to third place on the world ladder of uranium producers,” Zheng Keping, chief executive of Namibian unit Swakop Uranium said at the launch of mining operations.
With targeted output of 15 million pounds of uranium oxide by 2017, Husab could become the world’s second largest uranium mine. “Husab will become a key supply base of natural uranium products for Chinese nuclear power stations. It will guarantee the natural uranium demand of 20 million-kilowatt nuclear units for nearly 40 years, thus making an enormous contribution to China’s economic growth,” Keping said.
CGN’s installed capacity for nuclear plants is 9.4 GWe, accounting for 59% of nuclear installed capacity in China. The Chinese group is constructing 15 new reactors with a total capacity of 17.7 GWe, representing 24% of the world’s nuclear capacity being built. “With CGN as a shareholder, the Husab mine is fortunate to a key market for output,” Keping said.
CGNPC launched the start of mining operations in the presence of Namibia’s President Hifikepunye Pohamba, mines and energy minister Isak Katali ad and government ministers. The Namibian government owns a 10% stake in the project, which when fully operational will account for 5% of the country’s gross domestic product. CGN will invest US$2 billion in the Husab project to get into full commercial production, Keping said.
Off-take Contract Sought
CGN says that it will need an interim buyer for its output from Husab and is currently in talks with Cameco Corp, Canada’s largest uranium producer for an off-take contract for uranium produced at its Husab mine in Namibia. CGN will ship material from Husab to off-takers, and potentially Cameco, starting next year, and would only start getting uranium from the Namibian mine after expending long term supply contracts it had with other producers around the world.
The Husab mine aims to have 1 million tonnes of stockpiled ore ready for processing in 2015 and is expected to be fully operational by 2017. “CGN has long term supply contracts and until those contracts are fulfilled we have to sell excess capacity to other customers,” Deon Garbers, senior vice president, operation at Swakop Uranium said in an interview.
CGN is ‘talking to lots of customers’ to sell the excess capacity and Cameco has expressed interest to be an off-taker in the short to medium term, Garbers said. Tim Gitzel, Cameco president and chief executive officer attended the official launch of mining operations at Husab mine but denied his company was interested in securing material from Husab. Gitzel said he had visited the Namibian mine ‘to celebrate with the shareholders on the launch of this project’.
“They (Cameco) are talking to us, they came down here to see for themselves what type of an operation we are running. It’s a normal procedure before decisions of this nature are taken,” Garbers said. “Cameco is definitely a potential customer,” he added.
“Depending on how much they will take, will might also sell to other customers and eventually Husab will be supplying to China only,” Garbers said.
The Paradox of Two Uranium Deposits
Husab has potential to produce 15 million pounds of uranium and plans to have 1 million tons of stockpiled ore ready for processing in 2015 before becoming fully operational by 2017. CGN has rapidly developed the US$2 billion mine, despite uranium prices slumping more than 57 percent since the March 2011 earthquake and tsunami that crippled Tokyo Electric Power Co’s nuclear power plant.
The Husab operation is situated in the arid Namib-Naukluft national park, eight kilometres south of Rio Tinto’s Rossing uranium mine’s Z20 deposit, an ore body discovered in 2010 and with similar geological structures to the Husab deposit. The Husab deposit was initially called Rossing South and in 2009 Rio Tinto intended a joint venture to exploit the deposit with Toronto listed Extract Resources Ltd.
Rio Tinto’s campaign for the then Rossing South deposit lacked the enthusiasm with which the Chinese pursued the deposit. CGN in 2012 paid US$2 billion to extract to take control of the Husab deposit as China’s second largest reactor builder sought supplies for operations at home.
“Now we refer to their (Rossing) Z20 deposit as Husab north,” Grant Marais, Swakop Uranium spokesperson said. Husab and Rossing would seek to “co-operate on various aspects to maximise our operations”, Garbers said. “We do not have harbour facilities at the moment and there is potential in us importing sulphuric acid using their facilities,” Garbers said.
