DESPITE a weak uranium oxide price and the perception that the Trekkopje mine in Erongo has closed down, Areva Resources Namibia remains committed to eventually being a major contributor to the national economy and social enhancement.
This was the message of the company’s managing director Hilifa Mbako at the launch of the 2013/2014 stakeholders’ report in Swakopmund on Wednesday.
The report highlights Areva’s involvement in local, regional and national community programmes to the tune of N$2 million, despite the fact that it is spending N$100 million annually on its care and maintenance programme for Trekkopje mine since 2013 – with no returns on uranium production.
“Trekkopje mine is merely in a holding phase with every intention to start up as soon as the economic conditions make the project profitable again,” Mbako stated. The care and maintenance involves a team of about 100 people ensuring that assets are protected and the mine’s infrastructure is kept in working condition so that it can be commissioned without delay.
Since the 2011 Fukushima disaster in Japan, uranium prices have plummeted to as low as US$28 per pound, although lately it has steadily increased to US$39,50 per pound. Trekkopje’s financial manager Tommie Gouws said the company hopes a steady growth over the next two to three years will bring the price to a more conducive US$70 per pound, which will prompt Areva to start its N$10 billion operation.
“Everyone is positive that the price will increase in the medium term. This mining is linked to energy demand globally and the world knows there will be a need for nuclear energy,” Gouws said.
Mbako said the downturn after Fukushima was an “emotional response” from nuclear countries to halt nuclear fuel programmes, which was the biggest catalyst to decrease demand.
“But the emotions have subsided and nuclear energy will take over from coal,” said Mbako.
Asked how long Trekkopje intends to go on with care and maintenance before realising that it could be a ‘dead weight’, Gouws replied: “It’s difficult to draw the line and decide till here and no further. The point is to have the mine ready to restart as quickly as possible as soon as conditions are right. We are anticipating another two or three years before this can happen.”
Mbako explained that most of the existing mines had gone into long-term contracts before the downturn happened and these contracts had kept them in business.
“Most of those contracts come to an end this year and then these mines will have to decide whether they can continue or not,” he said. “We made a commitment. It is maybe the easiest option to just quit and save money but there’s more at stake here and we are optimistic.”
Besides its community involvement, one of two highlights during the last financial year is the completion of the second phase of metallurgical test work with “very promising results”.
“The care and maintenance phase is giving us an opportunity to thoroughly research the alkaline heap leach process and make improvements to the uranium recovery technology that will be employed when the mine goes into full scale production,” according to Mbako.
The other highlight is the construction of a new access road from Arandis to the mine, which is said to shorten the employees’ travel time to work by one hour each day.