Uranium Boom in Namibia – Hausse or Baisse

Abstract

Uranium has been mined in Namibia since the 1970s. The worldwide increasing need for energy in the early 2000s has triggered an increased interest in uranium exploration, often referred to as “the Namibian Uranium Rush”. All in all, five mining licenses have been granted by the Namibian Government, with currently two mines in operation, a third under construction undertaking trial mining, the fourth under care and maintenance after completing a large scale and successful trial period and the fifth in project finance negotiations. In addition, highly intensive prospecting activities at additional deposits are at an advanced stage. The finalization of the strategic environmental impact assessment (SEA) on uranium mining in 2010, the first of its kind and scale in the world, has enabled the Namibian government to assess this uranium rush and its tremendous legal, socioeconomic and environmental impacts and to prepare for different future scenarios, including both, a skyrocketing and a complete breakdown of demand scenario. The Fukushima disaster and plans of the Namibian government to significantly increase royalties and company taxes in 2011 have threatened the market situation, forcing investors to reevaluate Namibian uranium mining projects. However, with the tax and royalty increase initiative since withdrawn, most projects have soon been back on track with significant pace, when again low market prices hampered some of the projects or even completely put them on hold.