Uranium exploration in southern Africa spurred by global hunger for cleaner, cheaper energy

Wednesday, December 26, 2007

The Associated Press
Wednesday, December 26, 2007

LUSAKA, Zambia: Resurgent global interest in nuclear power has made Zambia, a southern African nation better known for its vast copper reserves, into a hotbed of uranium exploration.

The activity is part of a larger wave of uranium exploration and mining across the mineral-rich region, raising hopes of new jobs and tax revenue, while sparking debates over safety and security.

African Energy Resources Ltd., an Australian-owned mining outfit, is drilling on the southern border with Zimbabwe. Canadian-owned Equinox Ltd. said in November that there is high-grade uranium in the Lumwana open pit copper mine in northwestern Zambia, and hopes to begin stockpiling it next year.

After a decades-long slump, uranium prices are high as South Africa, China, the U.S. and other countries look for cleaner and cheaper fossil-fuel alternatives.

"We are assured of a market in the sense that demand for nuclear power is increasing," Maxwell Mwale, Zambia's deputy minister of mines and mineral development for large scale mining projects, told The Associated Press.

In anticipation of rising demand, Zambia's government is completing new regulations to cover the mining, processing and export of uranium products, in accordance with International Atomic Energy Agency standards, Mwale said.

Exploration is also ramping up across the border in Botswana. And Namibia's uranium exporting industry has seen a revival, too, with a $112 million expansion of the long-running Rossing open mine and the opening of a new mine in 2006 by Australian-owned Paladin Energy Limited.

It's the "biggest push on uranium exploration since the late '70s," says Alasdair Cooke, executive chairman of African Energy Resources, which has poured $8 million into its exploration project with Albidon Mining Ltd., in southern Zambia over the past three years.

Faced with domestic energy shortages, the government of South Africa released a draft nuclear energy policy in August pledging a rebirth in the country's uranium mining, processing and enrichment industries, and the construction of new nuclear reactors over the next decade.

South Africa, the region's economic powerhouse, gave up its nuclear weapons program following the end of apartheid in the 1990s but still has two nuclear reactors that produce 6 percent of the country's power.

The scramble for uranium marks a stark turnaround after a decades-long industry slump brought on by the 1986 disaster at Chernobyl that made nuclear power a dirty phrase, and the end of the nuclear arms race of the Cold War.

Concerns over climate change and pollution created by coal, along with high oil prices, have sent uranium prices from less than $10 per pound at the start of the decade to a current price of about $92 per pound. Many countries, including the United States, are planning to build new nuclear reactors, and China is looking to imported uranium for the many nuclear reactors it will use to help fuel its massive economic growth.

Mining companies are looking to countries across Africa. Niger is the world's fourth largest uranium supplier and produced 3,434 metric tons in 2006.

In southern Africa, the search focuses on the uranium-enriched crust of what geologists call the Karoo Basin. Namibia and South Africa are believed to hold six percent and seven percent, respectively, of the world's recoverable uranium resources, trailing only Australia, Kazakhstan, Canada and the United States, according to the World Nuclear Association, a nuclear power industry advocacy group.

Up-to-date estimates of Zambia's potential are hard to pin down. Here, long-standing uranium exploration started by Italian and Japanese investors stopped in the 1980s.

"With the price increase we've seen in the last couple of years, the uranium resource is now quite economical" to mine, says Harry Michael, chief operating officer of Equinox Minerals Limited, an Australian and Canadian venture that is running Lumwana Mine, along Zambia's border with Congo. At Lumwana, uranium deposits mingle with copper, and will be mined as part of the same process.

Uranium mining could create valuable jobs in mining, transportation and other sectors in a country where about 20 percent of the work force is formally employed, deputy minister Mwale said.

"We would like to see (uranium) mining development so benefits can accrue to our people, and also in terms of revenue to the central treasury," Mwale said.

Other than more developed South Africa, most nations in the region will remain, for the moment, suppliers of uranium rather than users of it. How much those countries will benefit from their exports will be a key question for policy makers. The issue is sure get attention in Zambia, where the government has been promising for more than a year to increase taxes on foreign copper mining companies that secured minuscule tax rates early in the decade when copper prices were low, and are now reaping huge profits.

Even though nuclear power is seen by many as the environmentally friendly energy source of the future, industry officials still face opposition from some environmental groups and other skeptics.

Just east of Zambia, in Malawi, the government's grant of a uranium mining license to Paladin, sparked complaints from the Center for Human Rights and Rehabilitation. The Malawian government has a 15 percent stake in the project. While the local group acknowledged that the almost $200 million mining project could create jobs and profits, it questioned its effect on the environment and whether the economic benefits to Malawi outweigh the social concerns and hazards.

Experts in the industry say that while radon gas emitted by uranium presents some radiation risks, modern technology, including ventilation systems, makes them negligible to workers and the public.

In some regions, the increased demand for uranium has prompted security concerns, especially amid reports of illegal uranium mining across the border in Congo - the same area that produced some of the uranium used in the atomic bombs dropped over Hiroshima and Nagasaki during World War II.

Counterterrorism experts worry about extremists getting radiation materials through a black market for nuclear components that operates despite attempts to tighten security. A growth in mining and processing could make security even more crucial.

Mwale, of the Zambia mining ministry, says that Zambia is being cautious.

"We are very particular, as a country, that there will be no lapses at any stage of the handling of the uranium product," he said.

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