PERTH (miningweekly.com) – The Langer Heinrich uranium mine, in Namibia, is poised to return to production after ASX-listed Paladin took the decision to restart operations.
First production volumes are targeted for the March quarter of 2024, Paladin said on Tuesday.
“With the strength of the company’s uranium offtakes and the continuing strong uranium market fundamentals, Paladin has made the decision to return the globally significant Langer Heinrich uranium mine to production,” said Paladin CEO Ian Purdy.
Restart costs for the Langer Heinrich operation have previously been estimated at $81-million, with the project’s life-of-mine production estimated at 77.4-million pounds over a 17-year mine life, at an estimated C1 cost of $27.40/lb.
However, Paladin said on Tuesday that restart costs had increased to $118-million, driven by the industry-wide cost escalation in labour, equipment and raw materials costs, the bringing forward of key utility infrastructure work packages to ensure the provision of water and power over the life of the operation, the decision to strengthen the project management team through expanded engineering, procurement, construction and management (EPCM) services, minor modifications to the scope of the project, and an increase in project contingency levels.
“The increase in the capital required to restart operations reflects a combination of recent inflationary pressures and the bringing forward of key work packages to ensure the long-term reliable supply of power and water to site. We have also strengthened our project execution team via the appointment of leading African EPCM contractor ADP Group to ensure the successful delivery of the Langer Heinrich mine into production,” said Purdy.
“The Langer Heinrich mine remains a low risk, robust, long-life operation that is poised to take advantage of the improving uranium market conditions and deliver sustainable value creation for all our stakeholders.”
He noted that with $177.1-million cash at the end of June 2022 and no corporate debt, Paladin was well funded to deliver first production from the Langer Heinrich, pursue further uranium marketing activities and advance the global exploration portfolio.