Langer Heinrich moots N$1.3b comeback
By Hilary Mare
THE Paladin Energy-owned Langer Heinrich uranium project in the Erongo region might be brought back on line at a capital cost of N$1.3 billion, the company has said following the successful completion of the mine’s restart plan.
Of the proposed capital cost, N$595 million will be for ‘operational readiness’ which allows for the mobilisation of the workforce and working capital for production. A further N$799 million in discretionary capital will be spent which will be pointed towards process improvements.
Production, however, will only resume when Paladin has secured short-term offtake agreements.
The company has about N$600 million in cash and last week affirmed that Langer Heinrich’s costs were in line with tier one level rivals.
In a prepared presentation, Paladin said that the spot price for uranium had fallen 60 percent since the Fukushima nuclear accident in Japan in 2011. Since 2016, there had been 45 million pounds a year in production cut-backs, excluding disruptions caused by Covid-19.
“The completion of the Langer Heinrich mine restart plan is a significant step forward for the company and completes the vast amount of study work undertaken over the past 18 months,” said Paladin Energy, CEO Ian Purdy.
“The operational and economic parameters identified in the chosen restart plan show the strategic significance of the Langer Heinrich asset and highlight the potential economic returns that can be delivered under the restart plan, and I look forward to updating the market on our ongoing activities.”
The restart plan confirmed a 17-year mine life, with peak production expected at 5.9 million pounds of uranium dioxide a year, from the seventh year of operation. Over the entire mine life, Langer Heinrich could produce up to 88.5 million pounds of uranium dioxide.
The Langer Heinrich life-of-mine plan outlined three distinct operational phases, including ramp-up, which will take place in the first year of operation, mining, between the second and eighth year of production, and stockpiling, between year nine and 17.
Purdy noted that the use of currently stockpiled material in the ramp-up phase would reduce the operational start up risk and would provide a strong platform for the operation to move towards nameplate capacity within a 12-month period.
With the project still fully permitted to resume both mining and uranium exports, Paladin will continue to engage with potential off take partners to secure term-price off take agreements, and would advance critical-path elements of the restart plan, including continuing detailed mine planning, surveying the processing plant, process flow modelling and preliminary engineering, and further de-risking restart activities.
In the meantime, the project would remain on care and maintenance.
Paladin mothballed the mine in 2018 amid a declining uranium price, but the company had been in trouble before that date. In 2014, it hatched a plan to sell a quarter stake in the mine to China National Nuclear Corporation. The transaction was not completed.
Founder and long-standing CEO, John Borshoff, lost control of the company in 2015 hastening in a period during which it welcomed and bid farewell to two CEOs before current management was appointed.