5 February 2013

Namibia: Gecko Rethinks Strategy for Industrial Park

Cape Town — The changing landscape of uranium mining in Namibia calls for a review in strategy for the development of Gecko Vision Industrial Park that would comprise sulphuric acid, soda ash, bicarbonate, caustic soda and phosphoric acid plants; and a thermal vapour compression seawater desalination plant, to supply the country's mines.

Although the much touted N$12 billion Gecko Vision Industrial Park planned for north of Swakopmund was given the initial go-ahead by the government in April last year, the company feels the changing scenario for uranium mining calls for a rethink of strategy by Gecko.

Gecko's development is premised on the supply of much-needed sulphuric acid used by uranium mines in the extraction process to produce yellow cake - the final product exported by uranium mines. Currently, mines spend in excess of N$2 billion annually importing acid and alkaline products from mostly Asia.

According to Steve Galloway, Managing Director of Rand Merchant Bank (RMB) Namibia, and former chairman of Extract Resources (developers of the massive Husab uranium mine) who is attending the African Mining Indaba in Cape Town, South Africa, alternative strategies are needed to realize the Gecko project.

"Mines operating in Namibia still need a bulk port to export their products around the globe," said Galloway. Expressing doubt that mining companies operating in the Erongo Region could be accommodated at the Port of Walvis Bay, Galloway explained that the Gecko industrial park could be developed in phases once a new port is constructed.

"Gecko could become a reality if it is developed around the footprint of a new bulk port to service the mining industry, particularly in the Erongo Region," commented Galloway. Despite plans to develop Gecko, Galloway says the future of four proposed mines now hang in the balance and the production of acid by Gecko may not be as urgent as once envisaged.

Some mines, such as the Rössing uranium mine, have arrangements in place to source acid from copper mines in the Tsumeb area, while the huge Husab mine is yet to be developed. Also, Areva's Trekkopje mine has been put on the backburner as the industry awaits higher uranium prices that would in turn make uranium mining a much more profitable venture.

Gecko Namibia said it was prepared to invest N$12 billion in the industrial park to ensure the country derives maximum benefit from the increasing mining of uranium.

Soda ash, leaching agents and phosphoric acid were also going to be produced at the plant, and another desalination plant would be built.

According to explanatory documents from Gecko, all the chemical substances required for exploiting uranium in Namibia are currently imported through Walvis Bay harbour and then conveyed to the mines in large trucks. Since new mines were expected to open it was envisaged that the demand for these materials would increase threefold, while Walvis Bay would not be able to handle the volumes.

The Gecko project was expected to bring not only financial benefits to Namibia, but also create much-needed jobs in a country reeling under the burden of massive unemployment. The developmental phase of the industrial park was to provide more than 11 000 jobs, and after completion of the project another 2 470 permanent job opportunities were projected.

State revenue from the project was estimated to would be around US$73 million by 2017 and by 2023 this would have risen to US$178 million.

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