Uranium Prevails
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34 RESOURCES INDUSTRIAL MINERALS Uranium prevails Development of new mines continues in the uranium sector despite current low prices for the commodity, reports Roger Murray he uranium mining and devel- tors closed (six permanently) – after On the supply side, Kazakhstan opment sector is locked into Japan’s March 2011 earthquake/ has provided some stability by this T survival mode, with cuts to tsunami seriously damaged the year pledging not to raise produc- mine production, development Fukushima nuclear plant – have tion above the 28,000t of U3O8, rep- delays and exploration spending restarted; as more come back into resenting 39% of global uranium freezes as companies struggle to operation, this will provide another output, that it produced last year. balance the books and cope with the upward impetus to demand. drop in the uranium spot price to an However, it is China’s purchase SALAMANCA SHINES 11-year low of US$24/lb for uranium of nuclear fuel for its expanding One mining development proceed- Bannerman oxide (U3O8) as of September. nuclear-plant network (an average ing is Salamanca in west-central Resources’ The principal cause of supplier six new reactors are due on line each Spain, where Berkeley Energia has heap-leach woes is continued weak demand. year until 2020) that provides the already begun initial site infrastruc- uranium Western utilities remain well-stocked main upside. Analysts see China’s ture works, with mine start-up cur- demonstration with inventory, although it is antici- continued inventory accumulation rently scheduled for 2018. plant on its pated that some at least will resume as the leading factor likely to spark Salamanca’s location in a Etango project buying activity in the next two years. a recovery in uranium in the next two first-world jurisdiction with well- in Namibia So far, only a few of the 54 reac- years. established infrastructure nearby is November 2016 www. .com RESOURCES 35 seen as a key advantage by Berkeley. upside potential from the higher- with waste and treated ore to mini- The initial development stage is fully grade Zona 7 deposit. mise land disturbance. funded; Berkeley had A$11 million The DFS confirmed that the Sala- Processing will comprise heap ($8.4 million) in cash and no debt as manca project will be a low-cost pro- leaching/solvent extraction with no “The of end-June 2016, and to fund the ducer capable of generating strong on-site sulphuric acid needed as estimated US$96 million up-front after-tax cash flow through the cur- supplies are available from regional principal capital cost the firm is seeking a rent low point in the uranium price smelters. Managing director Paul cause of minority equity investment from a cycle. Over an initial 10 years, annual Atherley says that inclusion of Zona supplier strategic partner for a price reflect- steady-state output would be 7, the most recently discovered ing Salamanca’s US$532 million post- 4.4Mlb (1,996t)/y U3O8 at a deposit, has “transformed the eco- woes is tax net present value (NPV). US$13.30/lb cash cost, below even nomics of the Salamanca project and continued MDM Technical Africa, a wholly the currently depressed spot-market provided the basis for us to com- owned subsidiary of the AMEC price. Over the 14-year life of mine mence development”. weak Foster Wheeler group, has been (LoM), output would be 3.5Mlb Zona 7 currently accounts for just demand. appointed to undertake the front- (1,588t)/y at a 15.06/lb cash cost. over 40% of Salamanca’s measured Western end engineering design (FEED) Salamanca is projected to generate and indicated resource at a higher based on the definitive feasibility an average annual net profit after grade of 0.7-0.8% U3O8, with an utilities study (DFS) that AMEC completed tax of US$116 million during steady- extensive drill programme targeting remain in July 2016. state operation. Zona 7 extensions and similar depos- Measured and indicated resources Mining will start at Retortillo, one its under way. well- for the DFS were 60Mlb (27,215t) of of three shallow Salamanca deposits Berkeley aims to conclude long- stocked” contained uranium grading an aver- and where a central processing plant term uranium offtake contracts age 516ppm (0.05%) U3O8, with a is to be located, using a continuous from now until Salamanca starts up 30Mlb (13,608t) inferred resource mine-rehabilitation process involving and, in September, signed its first not taken into account, and further progressive lining and backfilling such agreement with European www. .com November 2016 36 RESOURCES Husab in Namibia is the largest single open-cast mine built in the past two decades. Near right: 3-D layout plan Above: aerial view of Husab plant Above right: covered ore stockpile at Husab Right: Husab site at night commodities trader Interalloys Trad- for nuclear fuel, which may lead to N$147 billion (US$11.5 billion) in ing. An initial letter of intent should higher spot-market and long-term 2015 – by some 7% and expand be finalised into an offtake contract contract prices. export earnings (US$4 billion) by “At full by the end of 2016; both parties about US$0.5 billion. capacity, “contemplate” an average price of HUSAB MEGA MINE Despite the unfavourable market, US$41/lb U3O8 – well above the cur- But before Salamanca kicks in as construction of the US$2.2 billion Husab is rent spot-market price. The firm Europe’s first new uranium mine, the mine, processing plant and associ- projected to intends to use a combination of much larger Husab mine in Namib- ated infrastructure, has been unaf- fixed and market-related pricing to ia’s central Namib Desert will be pro- fected and works completed to increase ensure positive operating margins ducing, predominantly to supply schedule by the Husab Project Joint Namibia’s in the initial years of production. Chinese nuclear power plants. Venture (HPJV), the engineering, GDP by Berkeley’s view of the market Husab is the largest single open- procurement and construction man- is that while prices may stay flat cast mine (two pits) built in the past agement (EPCM) joint venture of some 7%” in the near term, from 2018, when two decades or more and has also AMEC and Tenova Bateman. Most Salamanca is expected to start up, been the biggest 21st century mine- Husab product will be sold to a demand will be increased by US utili- construction project in southern guaranteed market in China with ties looking to re-contract coupled Africa. At full capacity, Husab is pro- only some 10-15% expected to be with Chinese new reactor demand jected to increase Namibia’s GDP – sold on the open market. November 2016 www. .com 38 RESOURCES View of Originally known as Rössing South Bannerman’s due its proximity to Rio Tinto’s long- Etango established Rössing mine just to the demonstration north, Husab has been developed in plant from the just over 10 years since the deposit entrance was first discovered in early 2008 by Australia’s Extract Resources. Husab has huge, relatively high-grade reserves in two main resource areas, Zones 1 and 2. Proven and probable reserves total 320Mlb (145,150t) of contained yellowcake, grading 0.6% U3O8 proven and 0.5% probable. Commissioning was due to have been completed during October, with ramp-up to full capacity of 15Mlb (6,800t)/y of U3O8 expected during 2017, Swakop Uranium’s CEO, Zheng Keping, confirmed at the September annual symposium of the World Nuclear Association (WNA) in London. Swakop U is 90%- owned by Taurus Mineral, a subsidi- ary of China General Nuclear Power Corp and China-Africa Development Fund; Namibian state-owned Epan- gelo Mining Co has a 10% free-car- ried interest. Mining and load haul of ore from Husab’s two open pits began in 2014 to build up a stockpile ready for of the workforce is Namibian and the March 2015 have demonstrated or immediate processing once the proportion is due to reach the 95% simulated the heap leaching and plant becomes operational, with an target by the year-end. solution recycling aspects of the average 50Mt/y of ore due to be processing route, validating DFS treated by conventional acid-tank ETANGO DEMO PLANT assumptions. leaching/solvent extraction. Also in Namibia, Australia’s Banner- Phase 5 aimed to optimise the So far, Husab has deployed a large man Resources has successfully com- process parameters and showed that mining fleet of 26 Komatsu 960E- pleted five stages at the heap-leach processing more coarsely ground “Husab is 2KT AC haul trucks, six Caterpillar demonstration plant on its 100%- material at reduced acid consump- employing hydraulic face and rope shovels and owned Etango project near to tion could contribute to further six drill rigs. Husab, and in October announced reductions in capital and operating 1,600 Two innovative designs, installed that it would proceed with an addi- costs. permanent to maximise environmental protec- tional sixth phase. CEO Brandon Munro comments tion and minimise wind-blown dust, The plant was commissioned in that the two-year programme has workers are a covered ore stockpile with a September 2015 with the purpose provided a “superb” return on and 400 large over-all triangular roof and a of demonstrating the potential for investment and “has now been contractors, fully lined tailings storage facility achieving substantial capital and extended into a sixth phase, such is (TSF). An onsite acid plant will pro- operational cost savings compared the extent of the positive impact on with a duce 1,500t/d, while Swakop U has with a 2012 Etango DFS.