The Namibian (Windhoek)

20 August 2010

Namibia: Country Could Become Largest Uranium Producer

THE envisaged higher uranium production in Namibia would catapult the country from fourth place to the largest producer in the world, a new study on this sector reveals.

Assuming all other countries' uranium production remains constant over the next years, Namibia will produce around 32 per cent of the world uranium, the strategic environmental assessment of the central uranium rush said. It was published online on Monday.

Based on the national accounts for 2008, uranium mining contributed about 4 per cent to Namibia's total gross domestic product (GDP).

"In the case of full production, Government could benefit in 2020 from additional revenue from the uranium mining industry ranging from N$2,6 billion to 5.3 billion" under three different scenarios, from moderate to intensive uranium mining.

"The uranium rush could become a significant source of government income. While the companies contributed about 3,2 per cent to total government revenue in the form of royalties, pay-as-you-earn, non-Namibian resident shareholder's tax and corporate taxes in 2008, this share can increase to 6,2 per cent or 8 per cent under the highest production scenario in 2015. We assume an average growth rate of Government revenue of 8,3 per cent according to the Medium-Term Expenditure Framework (MTEF) of the Finance Ministry This growth rate could accelerate to 9.5 per cent" in the low uranium mining scenario in 2011 or to 9,8 per cent in Scenario 3 by 2013 due to income from additional uranium-mining activities."

The report was compiled by local and foreign experts under the auspices of the Geological Survey of Namibia and Germany's Bundesanstalt für Geowissenschaften und Rohstoffe (BGR), which is the Federal Institute for Geosciences and Natural Resources.

In comparison, the diamond-mining sector contributed 10.1per cent to GDP in 2002 and 7.6 per cent in 2008.

"Based on the three scenarios it is likely that the uranium industry will become the strongest contributor to GDP," the report said. The value of exports is expected to increase from N$5,4 billion in 2008 to at least N$12 billion under the low scenario or up to N$26 billion under the intensive uranium-mining scenario by 2020 assuming a contract price of US$70 for uranium and that the mines run at 90 per cent of their production capacity," the experts predict.

Even with the most modest scenario, export earnings are expected to double. The contribution of uranium exports to total exports is to increase from 13 per cent to 28 per cent in Scenario 1 (low-intensity mining) or to about 62 per cent in the most optimistic scenario. If the uranium mines operate at full capacity until 2020, their contribution to export earnings will reach N$30,5 billion at the most optimistic prediction and account for 73 per cent of total Namibian exports.

Scenario 1 represents the current situation with two operating mines (Rössing and Langer Heinrich) and two other mines under construction being Trekkopje and Valencia. Scenario 2 includes these four mines plus two others.

"The projects which are the most advanced at this stage are Bannerman's Etango project - formerly known as Goanikontes - and Extract Resources' Rössing South project, also known as Husab project. These projects are likely to be accompanied by the construction of NamWater's desalination plant, an emergency diesel power plant, a coal- or gas-fired power station and two chemical plants at the coast to supply the mines with reagents.

"To ensure that the uranium rush has a positive influence on future development, the GRN, mining companies, local authorities and civil society must work together to eliminate, reduce or offset the negative impacts and enhance the benefits and synergies," the report says.

The report can be downloaded at www.saiea.com/uranium/index.html or can be obtained as CD-ROM from the Windhoek SAIEA office, the Ministry of Mines and Energy library and at the Uranium Institute at Swakopmund. Comments on the report are invited until September 6.

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