Australian uranium producer Paladin Energy will now spend N$1.96 billion (US$118 million) against the initial budget of N$1.44 billion (U$87 million) on Langer Heinrich mine due to cost escalations for labour, equipment and raw materials.
Paladin CEO Ian Purdy told the Digger & Dealers Mining Forum on Monday that the miner was restarting its development and exploration activities amid a surge in demand for nuclear energy, including its Langer Heinrich uranium mine which was idled due to low prices.
Purdy said the company, which is now aiming for production by the first quarter of 2024, will also restart exploration activities at the Michelin Project in Canada, in which it owns about a 70% interest, Purdy said.
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.
The Bank of Namibia forecasts the country’s uranium mining sector to grow by 3.9% and 6.6% in 2022 and 2023, respectively.
The Ministry of Finance is also upbeat about the prospects of the country’s uranium mining sector, with Finance Minister Ipumbu Shiimi saying a number of uranium projects are expected to come online if the price reaches US$65 to US$70 a pound, a development that will trigger more investment in uranium.
According to the Chamber of Mines, the rapidly improving uranium prices are likely to accelerate the development of mines on care and maintenance such as the Langer Heinrich uranium mine and Orano’s Trekkopje mine.
The mining association expects Reptile Uranium’s Tumas project and Bannerman’s Etango project to enter mine development once the hurdle uranium price of US$65 is reached.
Paladin Energy Limited is an Australian listed uranium company with a 75% stake in the Langer Heinrich Mine in Namibia. thebrief/mining.com
