Despite industry dip, uranium shows potential

HUSAB IN NAMIBIA One of MDM Engineerings core aspects is successfully developing clients' projects

HUSAB IN NAMIBIA One of MDM Engineerings core aspects is successfully developing clients' projects

1st April 2016

By: Sascha Solomons


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Gold and uranium have some traction in the market, regardless of the general commodities slump currently draining the profits of the mining industry, metallurgical engineering company MDM Engineering business development director George Bennett tells Mining Weekly.

He says, globally, the mining industry is still trying to rebound from market lows to regain its place as a vital sector that facilitates economic growth across multiple countries.

“The industry is currently very depressed . . . with global growth numbers being revised downwards . . . Until growth picks up in China, along with infrastructure spend in the US and Europe, the outlook for commodities is expected to remain subdued for the next 24 months.”

Bennett notes that the Paris Agreement of December 2015 was the first accord to have committed all 195 countries to combat climate change at the twenty-first session of the Conference of the Parties, resulting in huge pressure to adopt cleaner energy of which nuclear is one of the cleanest, thus, boding well for the uranium outlook, he states.

Japan has commissioned its reactors and the UK has approved three new nuclear power plants. Bennett believes that these are positive developments for uranium, especially considering China’s huge pollution problem and India continuing to build more nuclear power stations to meet its electricity demand.

In addition, South Africa, which hosts the Koeberg nuclear power station, in the Western Cape, is also aiming the build more nuclear power plants through its Nuclear Build Programme.

Bennett says the uranium mining industry currently comprises a percentage of MDM’s workload, with the South African Amec Foster Wheeler/MDM office engaged in work in Spain and Namibia.

In Spain, the company is working on ASX-listed clean energy company Berkeley Energia’s Salamanca uranium project. The project has a net present value of $353.5-million with an internal rate of return of 54% at a discount rate of 8% and a long-term uranium price of $65/lb.

Berkeley sees itself as a high-impact clean energy company that, by developing the Salamanca project, will generate measurable social and environmental benefits, in the form of jobs and skills training, in a depressed rural community, and make a significant contribution to the security of supply of Europe’s zero-carbon energy needs.

The contract entails the definitive feasibility design of a uranium heap leach operation, which will produce yellow cake, triuranium octoxide and ammonium diuranite for the export market.

Bennett emphasises that the mining industry is still facing the same challenges it was two years ago. The lack of capital spend, owing to lower commodity prices and cost cutting, is placing huge pressure on mining companies and sectors servicing the industry.

Unreliable power in Africa, regarded as the final mining frontier, is another challenge and is forcing projects to use expensive alternative power sources such as renewable energy. “This is making access to capital far more difficult for our clients, as the risk of funding mining projects builds,” highlights Bennett.

Although every project poses challenges, MDM claims to be experienced enough to overcome them and deliver fully commissioned processing plants.

Bennett emphasises that, with MDM being an Amec Foster Wheeler company as of November 2014, it can provide a more comprehensive range of services, such as supplying and installing renewable energy, besides others. Power remains a critical resource to MDM’s clients, hence continuing discussions with them to determine how to improve their operations or meet their power-supply demands.

The Africa-focused company has several projects – including rare earths, gold, uranium, platinum and tin – .in various stages of the project life cycle, with some preparing for execution in the next 4 to 12 months. “This diversity is an added advantage during volatile economic times, as it limits the effects of the commodity cycle on our business,” Bennett notes.

Further, MDM has five bankable feasibility studies in various stages of completion, presenting a pipeline of projects that are well placed to go ahead across a range of commodities.

Meanwhile, the latest trends and technological advancements in the uranium industry have focused on improving the efficiency of production and how to derive greater value from existing assets, says Bennett.

He emphasises that it has always been the core of MDM’s business and one of the key aspects of successfully developing clients’ projects.

“Our ability to design everything in-house and innovatively think of new ways to enhance net project value is one of the reasons we believe we are most relevant in low commodity cycles, where focus is on effective use of capital.

“Cost-effective, fit-for-purpose plants need to be engineered, a philosophy that has helped MDM continue to deliver for its clients. Generally, technological advances are few and slow, but they need to be considered at all times,” he points out.

Edited by Tracy Hancock
Creamer Media Contributing Editor


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