African miners awaiting recovery in uranium prices
Africa supplies about 20 per cent of the world’s uranium production but it has the potential to produce much more.
Over the past decade, geologists have picked at rocks in the deserts of Namibia and jungles of the Central African Republic, and searched Niger, South Africa, Tanzania, Malawi and Zambia with promising results. All in all, about 18 African countries have confirmed deposits of the mineral.
“Of all African countries, Niger probably has the best overall grade,” says Gennen McDowall, a seasoned explorer on various African uranium projects, adding that Namibia also has large deposits, albeit at a lower grade.
While most of it will be exploited for export, some at least will go for domestic consumption.
South Africa has the only functioning reactors on the continent at the Koeberg plant outside Cape Town. The country is also planning a further five plants that will produce about 9,600 megawatts.
The South Africans have an advantage in that they can produce their own uranium from domestic sources. Most is secured as a byproduct of gold mining.
But even for gold producers, the current low price of uranium makes it costly to produce. Sibanye Gold, which operates some of the country’s oldest and deepest mines, has built a uranium recovery works at one of its gold mines that it intends to start once the price recovers.
“We have everything in place – all the infrastructure and plant is built and paid for. All we need now is for the price to recover,” says the chief executive, Neal Froneman.
Other African countries are also looking at nuclear – at least a dozen have announced programmes to evaluate it as a power source. Kenya, Nigeria, Sudan, Tunisia are among those that have formal projects under way.
“It makes sense because Africa has the least power capacity on the planet, depending mainly on hydro,” says Kelvin Kemm, the chief executive of the research firm Nuclear Africa.
“But drought, and shallow water bodies make dams less practical than in Europe. Coal has pollution issues and renewables can’t supply baseload. Nuclear is an answer to Africa’s energy problems.”
Nevertheless, it may be a while before nuclear plants go up in Africa’s 53 other countries. In the meantime, those with uranium resources are eager to develop them.
Tanzania, for instance, says it could eventually rival the production of Canada, the world’s second-largest producer, behind only Kazakhstan.
Tanzania is hoping for a payoff estimated at about 2,000 jobs and US$250 million a year in revenue. In 2013 the government issued a special mining licence to Mantra Tanzania, a project part-owned by Toronto’s Uranium One. The company says it is focused on licensing and a feasibility study is being prepared.
Once operational, the mine could produce 14,000 tonnes a year.
Neighbouring Zambia is likely to offer some competition, hoping to develop uranium projects to complement its copper production. Most promising is Denison Mines’ Mutanga project in Zambia’s south.
The company says airborne surveys have found consistent mineralisation within its permit area, which it hopes to explore further in coming years.
Niger is also moving ahead, after a bruising two-year battle with Areva over the renewal of the latter’s mining contract. Areva operates much of France’s nuclear fleet, and Niger is its most important source of uranium.
This year Areva agreed to a reduction in tax breaks and a rise in royalty rates, but says the start of production at its giant new Imoumaren mine will be delayed until prices improve.
The large, near-surface deposits in Niger are high-grade, and therefore there remains significant interest in that country in spite of the political difficulties that often beset the mines.
In the end, though, prices dictate all and for now, it is a waiting game for many.
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Updated: April 15, 2015 04:00 AM