Charlotte Mathews
13 July 2007
Johannesburg — THE recent surge in the uranium price has generated a flurry of activity in upgrading and building new uranium processing facilities outside Klerksdorp, the site of what could be one of the world's biggest uranium deposits.
The area used to have 17 uranium plants. After a decades-long slump in the uranium price, it now has only two active plants: Uranium One's and AngloGold Ashanti's.
AngloGold Ashanti has the oldest uranium plant still operating in the area at its 25-year-old Vaal River operations. The plant produces about 1,5-million pounds of uranium a year, and has no spare capacity. AngloGold is considering upgrading the plant's capacity by between 25% and 30% by 2009 at an approximate cost of R215m.
Uranium One has invested about R1bn in a new plant to process about 200000 ton s a month and produce about 3,8-million pounds of uranium a year. Even before construction is finished, it is looking at doubling the plant's capacity.
First Uranium is building a 100000-ton -a-month uranium processing plant at Ezulwini at a cost of about R383m and a 180000-ton -a-month plant at Buffelsfontein at a cost of about R437m.
A First Uranium spokesman said construction of the plant had begun at Ezulwini, and construction at Buffelsfontein was scheduled to begin in the fourth quarter. First production from Ezulwini was scheduled for June next year and from Buffelsfontein by November.
For residents of Klerksdorp who fear an increase in radioactivity in the area from the acceleration in output, the product of these plants is ammonium diuranate, a slurry containing U308. Yellowcake, as U308 is also known , is safe enough to handle.
But the uranium operators follow various safety measures. Uranium One executive vice-president for Africa and Europe Robert van Niekerk says the key elements in a uranium operation to ensure employees' safety are access controls and decontamination, while training and awareness are also important. All water used for decontamination is kept in a closed circuit, not released into the environment.
In economic terms, the side effects of the new activity are greatly to Klerksdorp's advantage. During the construction phase about 1700 people are employed on Uranium One's mining operation, and 1500 at the plant. During steady state, the mine will employ a total of about 3000 people, almost all of whom will be miners, with another 300 in the processing section.
The spur to reviving SA's uranium production has been the increase in the uranium price over the past six years to about $135/lb from $10/lb.
Uranium One CEO Neal Froneman says Uranium One took a 10-to-15-year view on the uranium price, which indicated a shortfall between uranium requirements and supply of about 200-million pounds between last year and 2015.
Uranium One bought Dominion from AngloGold, which had previously mined it to about five levels deep. But there is still a large deposit there and Froneman says that the extent of the uranium reef around Dominion is exciting. "I believe this is one of the great uranium resources in the world, and could easily rival Olympic Dam," he said in a reference to Australia's biggest uranium deposit, which is being mined by BHP Billiton.
Uranium One has acquired prospecting rights over a 57000ha area and has determined there is at least 10km of outcropping, or shallow, uranium deposits, as well as another 60km beyond that which can be explored. Anglo American did some exploration work in the area in the past, "so we know the reef exists," Froneman says.
Uranium One has not secured all the prospecting areas for which it has applied, although it has more than enough for its immediate expansion plans.
In some areas the prospecting right application was refused outright, probably because the rights are held by another party, but in other areas the company's application was rejected, and it is appealing against the rejection.
Van Niekerk says the areas on which Uranium One has not secured prospecting licences are not big enough for anyone else to develop an economically viable mine.
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