In conversation with
The uranium price has been in the doldrums for the past seven
to eight years. As we know, Namibia’s biggest mines are
uranium operations. How are these operations doing?
All the uranium mines have been seriously affected by the
uranium price, with the Langer Heinrich operation being
placed on care and maintenance last year. However, Namibia has
been lucky with the development of the mega Husab uranium
mine, which is owned by Swakop Uranium, which in turn is
owned by a Chinese state-owned nuclear fuel company, so the
entity will be using uranium to fuel their own reactors and have
thus far been insensitive to the depressed market. I also think
we are slowly starting to see a bit of a rebound in the uranium
prices. Recent supply disruptions in the broader market are
expected to improve the uranium price, although there is still
major uncertainty with regard to timing.
But Namibia is not only about diamonds and uranium; there are
other significant mines that have started production recently?
Yes, the two most notable new developments have been
B2Gold’s Otjikoto gold mine, that came online in 2015, and
since it started operating at full capacity, has trebled Namibia’s
gold output. The other project is Weatherly International’s
Tchudi copper mine.
One of our recent members, Desert Lion Energy, sold its
first shipment of lithium last year and although they ran into
difficulties, the company is raising financing to develop their
lithium assets in Namibia.
Currently, there are also some exciting developments taking
place in the industry with the re-opening of two old mines.
The Namib Lead and Zinc Mine near Swakopmund is set
to enter production early in 2019. The Uis tin mine is being
re-opened by a new investor, thereby breathing new life
into the otherwise economically depressed community. In
addition, the new cement plant at Whale Rock Cement is
completed and has commenced with the mining of limestone
and cement production.
The interest in battery minerals is growing and Namibia seems
to be well positioned to take advantage of the growing demand?
Yes, there has definitely been an uptick in exploration
expenditure in Namibia, and it has largely been driven
by demand for battery minerals. One of the major recent
discoveries is a cobalt deposit in the Kunene region close to
Opuwo. The project is a joint venture between a local mining
and exploration company, Gecko, and Celsius Resources. They
are currently running an extensive drilling programme, which
has so far yielded promising results, and are in the process of
compiling a JORC-compliant maiden resource.
Do you know how many exploration companies are active
in Namibia?
There are around 15 active exploration companies that are
members of the Chamber, but there are a number of other smaller
companies that are not members of the Chamber.
16 AFRICAN MINING MARCH - APRIL 2019
Do you know of exploration companies that are looking for more
gold or copper deposits?
Canadian company Osino Resources is busy with an extensive
drilling programme for gold in the northern parts of Namibia.
Deep South, an Australian exploration company, is doing
extensive exploration on the Haib copper project, while
Kalahari Copper is also doing a lot of exploration on the border
to Botswana.
In neighbouring South Africa, exploration activity has almost
dried up. Why is Namibia so attractive to new exploration
companies? Is it easy to enter as an exploration company?
Namibia has always been one of the more sought-after
African countries in terms of investment into mining.
Namibia is a politically stable country, and it has a robust
constitution and a working legal system and judiciary. In
comparison to other African countries, the infrastructure
(especially the roads and the ports) is world-class. The
regulatory framework makes Namibia one of the top mining
destinations in Africa.
Unfortunately, in the past three years or so, we have lost some of
that attractiveness due to proposed policies and legislation that are
restrictive and not conducive to investment.
One of the most contentious issues affecting the exploration
subsector has finally been resolved. In October 2018, the
minister of mines and energy dropped Additional Conditions
to exploration licences, which posed serious challenges in their
implementation. This has removed one of the main barriers to
investment in exploration.
Has this affected companies operating in the country?
It has affected the ability to proceed with projects, especially in
exploration. However, with the removal of Additional Conditions
to licences for exploration companies, we anticipate this will no
longer be a barrier for investment into new exploration projects.
What is your view on the uranium price?
Namibia has five prominent uranium exploration projects that
have advanced into the feasibility stages. To enable them to start
developing these projects, a price of around USD65 is required
for them to be profitable. Currently, the price is trading at about a
third of that. Fortunately, however, positive supply shocks in 2017
and 2018 resulted in a 27% rebound in the price last year. Supply
shocks in the market and an anticipated increase in global energy
demand indicate that the uranium price is bound to pick up again.
It is just a matter of when this will happen.
What are the major challenges and the major opportunities for
mining companies in Namibia?
Water is a big challenge for mines in Namibia. The country is a
water-scarce region and the mines in the central and southern
parts struggle with water availability. In Windhoek, there are water
restrictions and sometimes water cuts, which affects central mines,
as many of them draw water from the same source.
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