Rössing deal almost complete

The sale of Rio Tinto's 69% shareholding in the Rössing Uranium to a Chinese state corporation is expected to be finalised in the next few months.

10 May 2019 | Business

Rio Tinto's sale of its 69% shareholding in Rössing Uranium Mine to the China National Corporation is pending regulatory approval and is expected to be completed in the first half of this year.

According to the president of the Chamber of Mines of Namibia, Zebra Kasete, the agreement was entered into in November 2018.

“While this transaction has received widespread criticism in the local media, the sale will underpin continuation of operations at Rössing mine, especially in a low uranium price environment,” said Kasete.

Kasete listed the highlights of the mining industry in Namibia in his report and said that despite job losses in the mining sector, the redevelopment of two old mines and the construction of a cement plant have helped to reabsorb some of the retrenched workers.

He said the reopening of the Namib Lead and Zinc Mine at an investment of US$21.4 million made significant progress in 2018 with first production expected in the second quarter of this year.

“Upon completion the mine will create 150 new jobs in the sector,” said Kasete.

The old Uis tin mine is being redeveloped by AfriTin Mining for which a phase one processing plant has been constructed.

Furthermore the new cement plant owned by Whale Rock Cement was completed last year and has commenced with the mining of limestone and cement production.

According to Kasete the operation will create 450 new permanent jobs in the industry.

But a persistently depressed uranium market continued to jeopardise operations at the Langer Heinrich mine, eventually resulting in Paladin's decision to place the mine on care and maintenance in May last year. Subsequently 600 employees were retrenched.

However a concept study conducted towards the end of last year examined a possible early restart of Langer Heinrich and delivered positive results indicating multiple options to lower costs and sustain cost competiveness.

The results have prompted Paladin to initiate prefeasibility studies, focusing on optimisation areas and will also examine Langer Heinrich's capacity to produce vanadium as a saleable co-product and thereby increase the projects long term value.

This will position the mine for possible early re-start should there be a substantial improvement in the uranium price.

Falling lithium prices in the second half of last year negatively affected the profitability of Desert Lion operations.

Consequently Desert Lion suspended operations at the old Rubikon and Helikon mines just outside Karibib. The company was producing lithium concentrate from stockpiled ore for shipment to China through an off-take agreement with the buyer.

Subsequently the company is in the process of raising capital to further develop the mine with an added contractor on site, while a preliminary economic assessment of the project was completed which reported positive project economics.

The African Tantalum operation was also producing tantalum near Warmbad with five shipments up until July last year. Unfortunately water shortages at the African Tantalum mine resulted in the operation significantly reducing production and retrenchments of 94 employees. The company embarked on an extensive drilling campaign.

The Imerys Gecko joint venture suspended production at its Okanjande Graphite mine in November 2018 and placed the operation on care and maintenance, retrenching 128 employees.

Low prices of natural graphite did not warrant continuation of operations from which the mine was producing high-quality graphite. Transportation of ore to the Okorusu processing plant, some 88 km away, was also a major contributor to high operation costs.

ELLANIE SMIT

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