rossing uranium upbeat about prices

Rossing uranium says upbeat about prices, demand
By: Reuters
26th November 2009

SWAKOPMUND - Rio Tinto's Namibian Rossing mine plans to maintain annual uranium output of 4 000 t until 2023 but is busy exploring nearby deposits as demand grows to meet needs for greener energy.

Rossing's GM for corporate services, Zebra Kasete, said the company might boost production an additional 500 t if it goes ahead with a plan to build a heap leaching facility at the site, a prefeasibility study for which is to be completed in the first quarter of next year.

"We are still on track to make the 4 000-t-plus for this year and those are the numbers we are looking at, going forward ... if the heap leach goes ahead, that will be an additional 500 t," he told Reuters late on Wednesday.

Rossing had initially expected the project to start producing in early 2011.

The open pit mine in the Namib desert will be doing a lot of stripping work to remove waste product and explore further.

"We continue to do exploration in the area around the existing pit and also do exploration in the satellite deposits ... there is no reason why we believe that we've exhausted our current area," he said.

Rossing, which produces 8% of the world's uranium, has been Namibia's only uranium operation for decades.

Several firms have moved into the southern African country in recent years and several new mines are expected to come on stream within the next five years.

Kasete said the rising competition would help create necessary services for Namibia, but mines may have to fight for skills already scarce in the region.

He said the country's utilities had been proactive in ensuring enough power and water were in place when the other operations came on stream, adding that Rossing, which now consumes 36 MW, might consider generating some of its own power via an acid facility it plans to build.

Rossing has completed a study for building its own sulphuric acid plant to end its dependency on imports, but has put the project on hold for now because of market conditions.

Kasete said that while the spot price of uranium had been very volatile, he believed prices would pick up in the long term.

"We are confident that prices should improve in the long run given changes in attitude in terms of green energy and as it is difficult to bring new production in," he said.

Spot uranium on Thursday stood at $43 per pound, down from a record around $136 in June 2007.

Rossing is further trying to cut costs through energy efficiency measures, especially as a strong currency is hurting its exports. The Namibian dollar is pegged to the South African rand which has had a significant run since the start of the year.

"We are confident on the future going forward. The exchange rate plays into our operations, but no one can control that ... it's a low grade, high cost operation and we need to do all that is required to reduce cost," he said.

Rio Tinto owns a stake of 68,6% in Rossing, one of two uranium mines within the group.
Edited by: Reuters