Paladin to spend 44% less
By Hilary Mare
URANIUM hopeful Paladin Energy last week announced that capital expenditure (capex) at its Langer Heinrich mine is expected to reach N$155 million in 2021 which is down by 44 percent on the funds spent in the 2020 financial year.
Paladin recently released a restart plan for the Langer Heinrich project, which found that the project could be brought on line at a capital cost of N$1.3 billion.
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 company this week also said that it was engaging with potential customers with an ultimate view to securing uranium term-price contracts with sufficient term and value to underpin the restart of the Langer Heinrich mine.
Confidente reported that of the restart costs, N$595 million will be for ‘operational readiness’ which allows for the mobilisation of the work force 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.
Earlier this year, 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,” Paladin Energy CEO Ian Purdy said at the time.
“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 on-going activities.”
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.
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 one 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.