3 July 2009
analysis
Windhoek — Increased production at existing uranium mines in Namibia and the opening of new ones in response to growing world demand for nuclear fuel will spearhead renewed economic growth from 2010, experts say.
"Increased production at both Rössing Uranium and newcomer Langer Heinrich combined to push production to uranium oxide over 5,000 tonnes in 2008 and catapulting Namibia into 4th place in the ranking of world producers after Canada, Kazakhstan and Australia," Otto Shikongo, outgoing president of the Chamber of Mines of Namibia, said in the chamber's latest annual review of mining operations.
"Our two local producers look set to be joined by several more over the coming years," he added.
Rössing Uranium, 69% owned by Rio Tinto and the country's oldest mine, produced 4,004 tonnes of uranium oxide (U3O8) in 2008 making this the first year it reached this level of output since 1990.
The company is currently in the middle of an expansion programme to extend the life of the mine to 2021 and increase its nameplate production capacity to 4,500 tonnes per year from 2012.
Paladin Energy's Langer Heinrich mine - brought on stream in 2006 - has completed an expansion programme that will up production to 3,7-million pounds a year, it said this week.
Design capacity could be reached this month, with plans underway to further expand the mine's production to 6 million pounds per year.
Nevertheless, uranium is in "the early stages of a bull market rally that could last three to four years", said RBC Capital Markets analyst Adam Schatzker in a recent note to clients.
In its monthly commodity report, Scotiabank said the price of uranium rebounded by nearly $10 in April to $51 per pound, fuelled by the construction of new reactors and increased buying.
The Bank of Namibia is however very confident of the developments in the country's uranium sector. It said the slackening appetite for commodities has not hurt the uranium sector as the world still demands clean and cheap energy, and also because a number of nuclear power stations are already under construction around the world.
"These factors have enticed the industry to improve production efficiency that has lead to record high volumes produced during the fourth quarter of 2008," it said in its quarterly bulletin.
According to Salida Capital, the global output of uranium is at about 107 million pounds per year, which falls short of the 168 million pounds required annually.
"If we simplistically assume the average new reactor consumes as much fuel as those currently operating, the industry must source an additional 59 million pounds of uranium annually on an ongoing basis," it said in an analysis.
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