The Namibian based mining company Swakop Uranium is currently building what would be the world’s third largest uranium mine near Swakopmund. The go-ahead for the development of the N$12-billion project, called the Husab mine, was given in August 2012 by Swakop Uranium’s 100 percent shareholder, Taurus Minerals Limited. Taurus is an entity owned by China Guangdong Nuclear Power Company (CGNPC) Uranium Resources Co., Ltd. and the China-Africa Development Fund.
The Husab Project was approved after the shareholders considered various options to take the project forward, including a joint development with the nearby Rössing Uranium mine. It was eventually decided to go the stand-alone route, independent of any other entity.
The Husab ore body – which is located just south of Rössing – has been confirmed as the highest-grade, granite-hosted uranium deposit in Namibia and one of the most significant discoveries in the world in recent years. The Husab mine has the potential to produce 15-million pounds (6 800 tonnes) of uranium oxide per year. This is more than the total current uranium production of Namibia and will elevate Namibia past Niger, Australia and Canada to the second rung on the world ladder of uranium producers, second only to Kazakhstan.
Says Norman Green, CEO of Swakop Uranium: “The Husab Project indeed has what could be called the Big Five every explorer wishes to find, namely grade, depth, metallurgy, location and size. While the mineralogy appears to be simpler than that at Rössing, with less marble, this deposit has remained hidden from previous discoveries due to a two to three metre cover of gravel.”
But how and when was the deposit discovered? According to Green, the Husab area was targeted as an exploration area of interest in 2006-07. “The geological reasoning behind this was that similar rock types to those hosting the Rössing Mine to the north were interpreted to be concealed beneath the desert plain in the northern part of our Exclusive Prospecting License (EPL).”
The discovery holes were drilled in late 2007; the chemical assay results for the three discovery holes were returned from the laboratory in early 2008 and released to the market in February 2008. Cementing its place as one of the largest resource drilling projects globally, Swakop Uranium has completed over 700 000 metres (or 700 km) of combined reverse circulation and diamond core drilling from April 2006, when the drilling programme started. This means that the combined depth of the drill holes will stretch from Swakopmund to the Etosha Game Reserve and well beyond!
According to Green, the mine should take roughly three years to build, which means that commissioning activities will start towards the end of 2015. “From April 2011 when the Definitive Feasibility Study (DFS) demonstrated that this was a project worth undertaking, Swakop Uranium has been preparing like an Olympic athlete to get this project in the best possible shape.” At the end of 2012 contracts to the budgeted value of US$820-million had already been placed, which represents a bit less than half of the total project budget.
“While the major agreements have been with international companies, the Husab Project team remains committed to encouraging spend with Namibian companies through a variety of means,” Green assures. In parallel with the construction of the Husab mine, the Swakop Uranium management team in Namibia will assemble and train the operational team to ensure that the company is ready to operate the mine once construction is completed and the mine is commissioned.
Given the potential of the Husab Project, Swakop Uranium is poised to become a substantial contributor to the Namibian economy and its local communities. At a spot price of US$65/lb, a production rate of 15-million pounds per annum and an exchange rate of N$7,5 to the US dollar, Swakop Uranium will have an annual turnover of N$7,3-billion. The Husab Project will furthermore contribute 5% to the Namibian Gross Domestic Product, 20% to the country’s merchandise exports and generate N$1 700-million per year in Government revenue.
The project will also create more than 4000 temporary jobs during construction and 1 325 permanent operational job opportunities. This will increase the number of people employed in the mining sector by approximately 17%. According to a socio economic study done on the Husab Project and the uranium rush, eight to ten spin-off jobs will be created with each permanent employee, which means that up to 12 000 permanent jobs will be created by, and as a result of, the Husab Project.