Uranium-rich South Africa good environment for nuclear plants

6th April 2012 By: Chantelle Kotze

South Africa’s vast reserves of uranium and good investment environment support the establishment of new nuclear power plants throughout the country, states a report by global business intelligence provider GlobalData called ‘South Africa Uranium Mining Market Overview and Forecast to 2020: Trends, Fiscal Regime, Major Projects, and Competitive Landscape’.

The Department of Energy plans to increase the country’s nuclear power generation capa- city by 9 600 MW, about a quarter of the current power supply or the equivalent of the power production of about six nuclear plants, by 2029, to reduce the heavy carbon emissions from coal-fired power plants.

The bid process for a number of new nuclear plants is expected to start in the next few months, with the new nuclear programme estimated to cost between R400-billion and R1-trillion.

The nuclear power process will be owned and managed by State-owned power utility Eskom and Mining Weekly reports that potential bidders for the construction of the plants include French power giant Areva, France-based nuclear energy reactor operator EDF, Toshiba’s Westinghouse Electric Corporation, China Guangdong Nuclear Power Group, South Korea’s biggest electricity producer, Korea Electric Power Corporation, and Russia’s State-owned nuclear corporation, Rosatom.

GlobalData says South Africa is keen to develop new uranium mines in the country to support the prospective nuclear plants, which are expected to start operation from 2024.

The country’s uranium production, which decreased from 711 t in 2000 to 579 t in 2010, is expected to increase from 930 t recorded in 2011 to 2 000 t by 2020, at a compound yearly growth rate of 8.9%.

“The increase in production is mainly attributed to the two mining projects, uranium mining company Areva-owned Ryst Kuil mine, in the Karoo, in the Western Cape, and mining company Namakwa Uranium’s Henkries deposits, in Namaqualand, in the Northern Cape,” explains GlobalData.

The Ryst Kuil project was put on hold by Areva in December 2011, owing to feasibility issues caused by a global drop in uranium stocks, while Namakwa Uranium has acquired a prospecting licence for the Henkries deposits and is yet to start developing the asset.

At the current production level, the uranium reserves in the country are expected to last for more than 750 years, making it a favourable uranium mining environment, the report states.

South Africa is among the top countries in the world with uranium reserves, and accounted for a significant reserve base of an estimated 433 364 t of uranium, or around 7% of global proven reserves in 2010.

The country contributes over 45% of total African uranium reserves. Despite hosting substantial uranium reserves, South Africa only produced about 579 t, or 1.1%, of the total global production in 2010, cites GlobalData.

Currently, the 1 800 MW Koeberg nuclear power plant, near Cape Town, contributes about 6% of total electricity generation in South Africa, while coal-fired power plants account for the remainder.

The report further states that the major threat of uranium mining is the discharge of acid mine drainage (AMD) consisting of hazardous, radioactive and toxic waste materials such as aluminum, manganese, iron and vanadium, which are not recommended for human intake.

Independent environmental campaigning organisation Greenpeace Africa reports that heavy rainfalls in Gauteng last year have resulted in the rapid rise of toxic under- ground water levels in Johannesburg at the Central basin on the West Rand, polluting the province’s freshwater sources such as streams and dams.

“Environmental impacts such as this may be a major disadvantage to uranium mining and the introduction of further nuclear power stations in South Africa,” says GlobalData.