Standard Bank Namibia is excited to collaborate with our clients in the vibrant uranium sector. Over the medium to long term, the uranium sector in Namibia is expected to not only contribute towards the country achieving its socio-economic development goals, but is also expected to contribute towards the use of clean energy globally, especially within the domestic markets of our strategic trading partners in China. Namibia currently supplies five percent of the world’s uranium oxide output, making the country the 6th largest producer of uranium. Namibia’s uranium mines are forecasted to have reserves that are capable of producing 10 percent of the global output until 2035. Since 2012, low commodity prices have subdued economic activity in the uranium sector. As a result, a number of mines, including Langer Heinrich and Trekkopje mine, have been deemed uneconomically viable and as such have been placed under care and maintenance. The closure and placement into care and maintenance of large uranium mines within the sector has resulted in the country’s production of uranium dropping by 40 percent between 2012 and 2015. However, production has begun to increase year-on-year since 2016 and over the medium term, the Husab Mine is expected to contribute significantly towards driving growth in the sector. According to the Bank of Namibia, in 2018 uranium production grew by 64.8 percent increasing the production of uranium oxide from 10 million lbs in 2017 to 17 million lbs in 2018. This results in the revenue derived from uranium exports increasing significantly by 95 percent to N$9 billion in 2018 from N$4.7 billion in 2017.
Despite the low uranium prices, there are a number of uranium projects in the pipeline. This includes 5 new potential mines which are expected to be developed from 2020 onwards, however, this will be contingent on the recovery of uranium prices. The prospective mines to be developed include the Etango Project by Bannerman Resources, Norasa Uranium by Valencia Uranium and Reptile Uranium by Tubas and Tumas projects. In discussing the prospects of the uranium sector, it is important for one to be cognisant of the fact that uranium does not trade on an open market as other commodities do. Instead, buyers and sellers negotiate contracts privately - with nuclear utilities buying uranium through long-term contracts. This has insulated a number of active mines from price fluctuations and enabled them to continue to with production. Looking at future prospects, the recently completed Husab mine is expected to contribute significantly to Namibia’s growth outlook over the medium to long term. At full capacity, the open-pit mine is set to have production output of 6.8 thousand tonnes (kt) per year, which alone amounts to more than double of Namibia’s uranium output of 2.9 kt in 2017.
With these promising prospects in place, the sector can aspire to contribute as significantly as the diamond industry has towards bolstering Namibia’s GDP and increasing the country’s export earnings. We at Standard Bank Namibia alongside the Namibian government are excited by the prospects within the uranium sector which in recent months has included increased level of investments and increased exploration activities. Standard Bank Namibia is thrilled to support the development and the growth of the uranium sector and will work towards ensuring that the positive developments emanating from the industry will ripple through the wider economy.
*Tuliikeni Ndadi, a Mining Engineer with a Masters in International Mineral Resources Management, represents Standard Bank Namibia’s Corporate and Investment Banking (CIB).