Uranium Mining in Namibia
Uranium minerals were first recognized in the vicinity of today’s Rössing Mine in 1928. But it was not until Rio Tinto acquired exploration rights in the 1960s, that a number of low-grade ore bodies were discovered along the north side of the rugged Khan valley. After extensive test work, the Rössing Mine was opened in 1976 and proudly celebrates its 44th birthday this year. Following the establishment of the Rössing Mine and a global increase in the demand for uranium for nuclear energy production during the 1960s and 1970s, several other companies started uranium exploration in the central Namib. More uranium deposits were identified, but the uranium price slowly declined and hence no other mines opened up for a long time. This changed early in the new millennium, when increasing uranium prices allowed the development of the Langer Heinrich Mine, which started production in 2006. It was also around that time that uranium prices reached an all-time high, and extensive exploration was undertaken once again in the western Erongo Region. Assisted by high-resolution airborne geophysical data provided by the Geological Survey of Namibia this exploration led to the discovery of the Husab ore body, a world-class uranium deposit, now mined at the Husab Mine destined to become one of the World’s largest uranium mines. Due to the lower uranium price following the Fukushima tsunami, the Trekkopje and Langer Heinrich Mines had to be put on care and maintenance in 2013 and 2018 respectively. However, a decision for re-starting the Langer Heinrich Mine was taken in 2022, and production resumed in March 2024. In addition, the projects of Bannerman Resources and Reptile Mineral Resources & Exploration have now reached stages, where mining licences were granted. Forsys holds a mining licence for its Valencia uranium deposit, and owns the neighbouring Namibplaas uranium resource, for which it also submitted a mining licence application in 2022. Elevate Uranium, Headspring Investments, and Zhonghe Resources are in advanced stages of exploration and recovery test work.
In addition, Karoo sediments in the south of the country have shown potential for uranium economic concentrations.
The uranium spot price stood at US$ 49.07 per pound at the beginning of 2023, and increased to just above US$ 90 as the year closed. This is the highest price since 2007, and since the post-Fukushima low of US$ 18.00 in October 2016, represents an increase of 400%. Uranium’s sizeable price jump in 2023 came as various supply and demand factors converged. Excess inventory created by the Fukushima incident has finally been depleted, and utilities are ready to sign new long-term contracts with uranium producers. New reactors are being built at pace and scale across the world, with China alone set to triple its current nuclear fleet in the next 12 years. Small modular reactors (SMRs), which can be installed into existing grids and are cheaper to build, maintain and run, are set to become real game changers. However, uranium is not always readily available, as many mines had cut output or even took their operations into care and maintenance when uranium prices were lower. Restarting is time consuming, and developing new projects is even more capital- and time-intensive. Only already well-advanced companies with solid economics in favourable jurisdictions will be able to deliver. However, utilities have to ensure that they get supply, which is an obvious advantage for sellers. 2023 has therefore seen a marked shift from the times when excess supply dominated the spot market, and utilities were able to obtain sufficient uranium on the spot market, to a situation where long-term contracts are preferable to cover future demands.
A number of reasons resulted in the price eventually moving up. The geopolitical situation in 2023 was one such factor. Russia has a key role in conversion and enrichment, but many countries tried to decrease their dependency on Russia following the invasion of Ukraine. The US House of Representatives, for example, passed legislation in December 2023 to ban imports of enriched uranium from Russia. In addition, Niger, a major uranium producer, also made headlines in 2023 due to supply concerns as a result of the military coup in that country. Cameco revised its annual production expectations downwards in response to issues at mine and mill facilities in its Athabasca basin operations in Saskatchewan, Canada. The World’s largest producer, Kazakhstan, remained with a curtailed production, as there were problems with the supply chain for sulphuric acid needed for their ISL operations. All these issues contributed to uranium price gains, and resulted in uranium being one of the best performing commodities of 2023.
The global demand for uranium in 2023 was 77 500 t U3O8, but global production was only 56 000 t U3O8, or 72% of the demand, leaving a sizable deficit of 21 000 t U3O8. While it is anticipated that this deficit will shrink slightly in 2024, analysts agree that a substantial shortfall will prevail for at least the next 5 years, and drive the uranium price upwards. As the potential fragility of the uranium supply chain became very apparent in 2023, many countries now place a growing emphasis on supply chain and energy security. Against that supply backdrop, uranium demand continued to grow in 2023 and is set to increase substantially moving forward.
Currently about 440 reactors are operating in 32 countries, producing 10% of the World’s electricity. Some 60 reactors are under construction and an additional 110 are planned. Most reactors in the construction or planning stages are in Asia, but experts agree that nuclear power is gaining traction globally, and multiple countries are also looking to extend the lives of existing reactors. This is happening in parallel with a clear shift in public acceptance. The ‘Public Attitudes toward Clean Energy’ index is the world’s largest publicly released international study on what people think about energy, with data collected from more than 20 000 respondents from 20 countries. In 2023, the survey found that 28% of respondents oppose the use of nuclear energy, while 46% support it, in other words 1.5 times more people support the use of nuclear energy than oppose it. Of the 20 countries surveyed, 17 have net support for nuclear energy’s use. Backing was found to be more than three times higher than opposition in the world’s two most populated countries, China and India. Preference for nuclear energy was also found to be larger than for onshore wind, biomass, or gas with carbon capture and storage. A quarter of those surveyed said their country should focus on nuclear energy, this is only exceeded by the preference for large-scale solar farms of 33% of the survey participants.
According to a report of the International Energy Agency (IEA), more than 70% of the increase in global electricity demand over the next three years is expected to come from China, India and Southeast Asia. China’s share of global electricity consumption is currently forecast to rise to a new record of 33.3% by 2025, up from 25% in 2015. At the same time, advanced economies are seeking to expand electricity use to displace fossil fuels in sectors such as transport, heating and industry. The report says nuclear energy and renewables will dominate the growth of global electricity supply over the next three years, together meeting on average more than 90% of the additional demand.
2023 was a momentous year for nuclear energy. To name but a few examples, the French Senate took a decision in January 2023 to accelerate new build and maintain nuclear power at more than 50% of France’s electricity mix. The Dutch government has budgeted US$ 352 million for the operational extension of an existing nuclear power plant, the construction of two new large reactors, the development of small modular reactors and for nuclear skills development in the Netherlands. South Africa’s Department of Mineral Resources and Energy has confirmed it will go ahead with the procurement of 2 500 MW of new nuclear capacity. Sweden has started a government investigation to lift its ban on uranium mining and exploration, after a moratorium had been in place since 2018.
The year ended with a climax, as COP28 in Dubai, United Arab Emirates, was a major milestone for the nuclear industry. The launch of a Ministerial Declaration to Triple Nuclear Energy was a landmark event at the conference. For the first time, heads of state and ministers from 24 countries have made a clear statement, not only confirming their support for nuclear energy, but also setting a goal for a tripling of global nuclear capacity by 2050.
More than 120 companies, headquartered in 25 countries, and active in over 140 nations worldwide signed the Net Zero Nuclear Industry Pledge, echoing the goal set by the Ministerial Declaration. In addition, the Global Renewable and Energy Efficiency Pledge recognized that, for those countries that choose to use it, nuclear energy will have a critical role in decarbonizing the energy sector.
COP28 also saw the first Global Stocktake of progress on the implementation of the Paris Agreement. The process called on Parties to make global efforts, in a nationally determined manner, to accelerate zero- and low-emission technologies, including, renewables, nuclear, carbon capture, utilization and storage, and low-carbon hydrogen production. Accelerating nuclear energy has therefore been recognized, as unanimously agreed by all Parties as a means to achieve deep, rapid, and sustained reductions in greenhouse gas emissions during the Global Stocktake. This is the first time nuclear energy has been formally specified as one of the solutions to climate change in a COP agreement. This marks a 180o turn-around in the treatment of nuclear energy in the COP process, from the lone technology excluded from the Kyoto Protocol mechanisms to COP28’s inclusion among a range of zero and low-emissions technologies.
During 2023, some uranium-producing regions, which were once considered safe, became volatile and unpredictable, and investors and purchasers are increasingly looking at the issue of country of origin. With nuclear’s now established place in the clean energy mix as an integral part of the transition to net zero, increased market activities can be expected. Namibia, with its operating uranium mines, advanced uranium exploration projects moving into the development phase, and ongoing new exploration, is well positioned to supply the markets. At the same time, Namibia’s favourable jurisdiction is accommodating the needs of investors and purchasers. As the 3rd largest uranium producer in the World, Namibia continues to supply abundant, affordable, clean, 24/7 energy to many places on the globe.
