The uranium mining sector in Namibia is poised for a remarkable turnaround, with growth projected to reach 14.8% in 2023 and an additional 5.2% in 2024, according to the latest Bank of Namibia data.
The latest development follows a contraction of the sector by 2.5% in 2022.
In its latest Economic Outlook, the Bank of Namibia attributed this optimistic revision to robust data collected during company engagements throughout July 2023.
“The upgrade of growth rates for the uranium sectors was informed by information collected during company engagements by the Bank during July 2023, as well as observed production volumes during the first half of 2023,” the report notes.
The Bank of Namibia also notes that the usual risks posed by water supply interruptions have been considered in these growth estimates.
“The occasional prevalence of the high sulphur content in the sea forces a halt in the production of desalinated water, leading to water supply interruptions. During the medium term, uranium mines are expected to increase production further and take advantage of high uranium prices,” the report states.
In contrast, the metal ores sector is predicted to exhibit a mixed performance. It is expected to grow by 12.1% in 2023, bouncing back from a meagre 0.5% growth in 2022, primarily driven by an increase in gold production.
“Growth in metal ores is expected to improve during 2023 and to remain strong in 2024, largely driven by higher output from the gold subsector, which has the largest weight in the metal ores sector.”
This comes as the broader economic outlook for Namibia is marked by a moderation in GDP growth for 2023 and 2024.
“The domestic economy is expected to expand by 3.3% in 2023 and 3.0% in 2024, a decline from the 4.6% recorded in 2022. These figures also represent a revision from the 3.0% growth projection published in the March 2023 Economic Outlook update,” the Bank of Namibia explains.
Overall GDP growth is expected to slow down in line with weaker global demand, but most sectors are expected to remain in a growth territory.
The positive outlook for the uranium mining sector is supported by a number of factors, including the rising demand for nuclear energy and the current high uranium prices.
The restart of the Langer Heinrich mine in Namibia is also expected to contribute to the growth of the sector. The mine is expected to start production in the first quarter of 2025.
The development of the Etango Uranium Project is another positive development for the sector. The project is expected to require more than N$5.6 billion (US$320 million) in pre-production funding.
Overall, the outlook for the uranium mining sector in Namibia is positive. The sector is expected to grow significantly in the coming years, driven by rising demand and strong prices.
