Langer Heinrich Uranium has concluded negotiations with water utility NamWater and is set to ink a bulk water deal as the mine’s restart plans gather pace.
Water is a key component in the uranium production process, with guaranteed supplies key to the mine restart process, with production expected by the first quarter of 2024.
“NamWater has been supplying the Langer Heinrich Uranium (Pty) Ltd with bulk water at the Langer Heinrich Uranium mine (The Mine) in the Erongo Region. The Mine has been on “care & maintenance” since 2018 but is currently engaged in a restart project which would mark its return as a bulk water customer to NamWater. NamWater and LHU have negotiated various agreements, which would facilitate this return to operations,” NamWater said.
According to Australian uranium producer Paladin Energy, which owns the Langer Heinrich Uranium, the mine restart process costs have increased from the initial budget of N$1.44 billion (U$87 million) to N$1.96 billion (US$118 million) against) due to cost escalations for labour, equipment and raw materials.
Langer Heinrich uranium mine has an existing uranium sales offtake with CNNC combined with the recent successful tender award and the continuing strong uranium market fundamentals.
Paladin’s offtake agreement with CNNC Overseas Uranium Holding Limited is for up to 25% of the Langer Heinrich future life-of-mine production.
The uranium producer early this year secured a tender to supply uranium concentrates to a subsidiary of Duke Energy, a leading Fortune 150 North American power utility.
Langer Heinrich was placed under care and maintenance in 2018 due to a decline in uranium market conditions.
According to the central bank, the uranium mining sector is expected to contract by 3.4% in 2022 before expanding by 7% in 2023.
“This sector was negatively affected by water supply interruptions during the first quarter of 2022 that led to mines reducing their production targets for the year. Other challenges faced by the sector include high costs of inputs such as fuel and sulphur, logistical delays importing chemicals and spare parts and labour issues that prevailed during the first quarter of 2022. Going forward, uranium mines are expected to increase production and take advantage of rising uranium prices,” BoN said in its August 2022 Economic Outlook.
Paladin Energy Limited is an Australian listed uranium company with a 75% stake in the Langer Heinrich Mine in Namibia
