6 February 2013

Namibia: Multi-Billion Husab Project to Go Solo

Cape Town — After considering to join forces with the well-established Rössing uranium mine in terms of production, the owners of Husab mine, which holds one of the world's richest uranium deposits, this week confirmed that the mine will go completely solo and will operate independently in a venture that is expected to boost Namibia's exports by 20 percent and increase government revenue by between N$1.2 billion and N$1.7 billion.

The venture will increase Namibia's Gross Domestic Product (GDP) by five percent.

Speaking to New Era at the annual Mining Indaba, which ends here on Thursday, Grant Marais, Director of Communications and Stakeholder Involvement of Swakop Uranium, the major shareholder in the new project, said Husab opted for stand alone production and expects to produce the first uranium for export by the first quarter of 2015.

Numerous industry players see the Husab project as the most important uranium discovery in recent years, since the mine has the potential to produce up to 6 800 tonnes of uranium oxide per annum. This figure is more than Namibia's total annual production and will push the country past Niger, Australia and Canada to become the world's second largest uranium producer. The 8-kilometre mineralisation has been confirmed as the highest grade, granite-hosted uranium deposit in Namibia.

Based on the Definitive Feasibility Study for the project, Husab is being developed as a low-risk, conventional, large-scale load and haul open-pit mine feeding ore to a conventional agitated acid leach processing plant.

According to Marais, the mine has a potential mine life of more than 20 years, with uranium reserves of at least 280 million tonnes.

Until April last year, Swakop Uranium was a 100 percent subsidiary of Extract Resources, which is an Australian company listed on the Australian, Canadian and Namibian stock exchanges. During April 2012, Taurus Minerals Ltd of Hong Kong became the new owners following a successful takeover of Extract Resources, and the latter has subsequently been delisted.

Taurus, an entity owned by China Guandong Nuclear Power Company Uranium Resources and the China-Africa Development Fund, has aggressively been pursuing Swakop Uranium's Husab ore body since 2011, first by successfully launching a takeover bid for Extract's majority shareholder, Kalahari Minerals plc, which owned 43 percent of Extract. This was followed by a US$2.2 billion takeover offer for Extract, which Extract's independent directors recommended their shareholders to accept.

In November last year, Namibia's state-owned mining company, Epangelo, and Swakop Uranium finalised an agreement for the subscription of a 10 percent stake in Swakop Uranium in a deal valued at more than N$1.8 billion (US$226 million). At the ceremony, CEO of Swakop Uranium, Zheng Keping, said: "We are proud to confirm that more than N$1 billion has already been spent to get the project to its current state. Our budgets estimate a further N$20 billion will be required to bring the project to fruition."

Swakop Uranium which received a mining licence in November 2011 estimated that about 2 000 permanent jobs will be created and an additional 6 000 temporary construction jobs. This will increase the number of people employed in Namibia's mining sector by about 17 percent.

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