JOHANNESBURG (miningweekly.com) – Namibia's mining sector will witness solid growth over the coming years, owing to an increase in domestic uranium production, but this could be stifled by proposed regulatory revisions, which will pose significant challenges for the broader mining sector, research firm BMI said on Thursday.
In its outlook for Namibia’s mining sector, BMI said that, with the country's largest uranium project, Husab, reaching full production capacity this year, production growth will be fastest in the uranium sector between 2017 and 2021, averaging 7.2% year-on-year.
Husab, which is 90% owned by the China General Nuclear Power Company, has an expected output of 6 800 t/y.
With full production capacity at the mine estimated to be reached by August, BMI expects Namibia’s uranium production to grow by 70% year-on-year in 2017, allowing the country to become one of the largest uranium producers globally by 2021, when the country’s uranium output is forecast to reach 8 500 t.
Further, the Namibian government will remain particularly supportive of the uranium sector moving forward, owing to its strategic importance to the overall economy, as evidenced by the January announcement that it will lift a ten-year moratorium on new applications for uranium exploration.
“This decision will likely open the doors to further foreign investment into the domestic uranium sector in the coming years,” BMI said.
Containing over 5% of the world's identified uranium reserves, Namibia will also benefit from increasing Chinese investment, as the government there makes a concerted effort to increase domestic nuclear power generation, as well as from miners from Australia such as Bannerman Resources, which is developing the Etango uranium project.
However, BMI warned that despite Namibia's status as one of the most politically stable countries in sub-Saharan Africa, the country’s proposed regulatory revisions, such as unfavourable taxation and economic empowerment proposals could hamper growth prospects for other industries such as gold, copper and zinc.