Namibia is one of the world’s most significant producers of uranium, currently providing about 10% of the world’s production.

Owing to the rise in the global consumption of the mineral, uranium exploration and mining companies have become increasingly active in the country, which has significant deposits that are currently being developed and mines that are in full operation.

The Damara province is one of the world’s best-known uranium districts. Located in this area are mining giant Rio Tinto’s Rössing mine, uranium production company Paladin’s Langer Heinrich mine, French nuclear giant Areva’s Trekkopje project and emerging uranium developer Bannerman’s Etango deposit. Perth-based Marenica Energy has also acquired a uranium project in this area.

Further, mining exploration company Extract Resources, which runs the 637 km2 Husab project through its subsidiary, Swakop Uranium, has now received envi- ronmental approval from Namibia’s Ministry of Environment and Tourism for the linear infrastructure to service the project.

The linear infrastructure entails access roads, electricity, telecommunications and water supply. This is the second and final environmental approval needed for the Husab project and is additional to the environmental approval that the company received in January.

Extract MD Jonathan Leslie says the receipt of the last environmental approval represents another milestone as the company develops the world’s fourth-largest uranium deposit at Husab.

“We have undertaken extensive specialist environmental studies and are committed to ensuring our environmental standards adhere to international best practice. With the environmental approvals now in place, we look forward to receiving our mining licence from the Ministry of Mines and Energy, the application for which was submitted in December 2010.”

It is expected that the Husab mine will be brought into production during the fourth quarter of 2014, with project construction expected to take some 33 months. The project hosts some 500-million pounds of uranium oxide, and has a maiden measured resource of 84-million pounds.

A feasibility study has outlined a 15-million-pound-a-year operation, which would cost around $1.5-billion to develop. Extract previously reported that it was in negotiations with a number of companies regarding potential offtake and funding deals.

Meanwhile, specialist bank and asset manager Investec top commodities analyst Quentin Allison warns that the uranium price is not at the best spot at the moment. “Uranium is a very difficult commodity – as it’s not liquid and not well traded in South Africa, it is almost impossible to hedge. There are a lot of mining companies in uranium production that are looking to fix the pricing levels in the South African market, but they cannot.”

He adds that there is also a lot of sensitivity regarding uranium as a result of the nuclear meltdown after the Japanese tsunami earlier this year. “Eight of the uranium plants have been shut down and only one remains operational. All of these things have had a significant effect on uranium prices,” he notes.

Allison adds that, looking at the market, it was obvious that the shares of uranium mining and exploration company Uranium One had tanked. “And, in general, uranium prices have fallen off the cliff.”

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