Uranium Mining in Namibia
Uranium minerals were first recognized in the vicinity of today’s Rössing Mine in 1928. But it was not until Rio Tinto acquired exploration rights in the 1960s, that a number of low-grade ore bodies were discovered along the north side of the rugged Khan valley. After extensive test work, the Rössing Mine was opened in 1976 and proudly celebrates its 44th birthday this year. Following the establishment of the Rössing Mine and a global increase in the demand for uranium for nuclear energy production during the 1960s and 1970s, several other companies started uranium exploration in the central Namib. More uranium deposits were identified, but the uranium price slowly declined and hence no other mines opened up for a long time. This changed early in the new millennium, when increasing uranium prices allowed the development of the Langer Heinrich Mine, which started production in 2006. It was also around that time that uranium prices reached an all-time high, and extensive exploration was undertaken once again in the western Erongo Region. Assisted by high-resolution airborne geophysical data provided by the Geological Survey of Namibia this exploration led to the discovery of the Husab ore body, a world-class uranium deposit, currently being turned into the world’s second largest uranium mine. In addition, a number of other projects are in advanced stages of exploration and test work for uranium extraction from the ore. However, uranium prices are once again depressed, and the full development of these projects awaits an increase in the price of the commodity.
The uranium deposits of the central Namib belong to two main types, namely primary uranium mineralization in light-coloured granite, so-called alaskite (Rössing, Husab), and secondary uranium mineralization in calcrete (Langer Heinrich). Secondary mineralization is the result of weathering of rocks with primary mineralization. Uranium-bearing alaskites have intruded the metamorphosed sediments of the Khan and Rössing Formations some 450 million years ago. The predominant uranium mineral in alaskite is uraninite [UO2], but betafite [U(Nb,Ti)2O6(OH)] can be a major mineral phase in some places. Secondary uranium deposits are found in calcrete which formed in palaeo-valleys of ancient rivers that flowed westwards from the Great Escarpment some 88 to 25 million years ago. The main uranium mineral in calcrete is carnotite [K2(UO2)2(VO4)2 x 3H2O]. It occurs as a thin film in cracks and as a coating on sediment grains in the calcretized fluvial channels. Both mineralisation types are amenable to open cast mining methods.
Uranium mining is an important economic factor in Namibia and in the Erongo Region in particular, where it has created substantial employment opportunities not only in the mining industry, but also in the supply and service industry. With more new nuclear power plants under construction worldwide than at any other time in the last 25 years, linked to the urgent need for electricity generation with low CO2 emissions, uranium prices are expected to improve with time. This will enable the uranium mining industry to prosper and grow, and continue to play its important role in the socio-economic development of the Erongo Region and indeed Namibia as a whole.
There are a number of external factors impacting on uranium mining in Namibia. At the beginning of 2021, the uranium spot price stood at US$ 30.20, and started a steep increase to above US$ 50.00 in September. At the end of the year the price settled for US$ 42.05. This is equivalent to an increase of 39.2%, and it is further noteworthy that since the post-Fukushima low of US$ 18.00 in 2016, this is an increase of 134%.
Today about 10% of the world’s electricity is generated by some 440 nuclear power reactors. Some 50 more reactors are under construction, equivalent to approximately 15% of existing capacity. While nuclear power generation rebounded in 2021 and increased by 2%, this nevertheless reversed only half of the decline in output that took place in 2020 due to the pandemic. However, there are other reasons that drive the uranium price.
In June 2021, leaders of the G7 countries committed to an overwhelmingly decarbonized power system by the 2030s. They pledged to accelerate deployment of so-called zero emissions energy, which includes nuclear energy. The G7 agreement also undertook to fast-track progress on nuclear power in those countries opting to use it as part of a technology-driven transition to Net Zero. In the time leading up to the G7 Summit, Environment and Climate Ministers had reaffirmed that those countries with nuclear in their energy mix recognize its potential to provide affordable low carbon energy and contribute to the security of energy supply as a baseload energy source.
The G7 Summit was followed by the COP26 conference in November 2021, which proved to be a landmark event for the nuclear industry, with the technology given a higher profile than ever before. A highly visible role was played by the International Atomic Energy Agency, with its Director General delivering the message that nuclear power is and will be part of the solution to produce low carbon energy. COP26 provided a clear platform to highlight the crucial contribution that nuclear power can make to climate mitigation, energy security, and a just energy transition in the developing world. Consequently, important developments in the nuclear sector from around the World were announced during COP26. These developments are just one more reason why players in the Namibian uranium sector position themselves to add significant production, once the right price level has been reached.
Last not least, it is noteworthy, that price increases in 2021 have been supported by the launch of the Sprott Physical Uranium Trust, the world’s largest fund investing in physical uranium. This has brought a growing number of new investors into the market, with both institutional and private investors counting on sharp price gains for the fuel as they rely on its projected role in cleaner energy generation. The fund has accumulated over 28 million lbs of U3O8, which is about 15% of the total yearly world demand, and currently has no intention of selling any of its holdings.