The General Mining Union Corporation Limited (Gencor) discovered the uranium deposit in the Langer Heinrich Mountains in 1973.
Gencor was a merger between the General Mining and Finance Corporation and Union Corporation, South African companies founded by Germans in the 19th century.
George and Leopold Albu founded the General Mining and Finance Corporation, while Adolf Goertz, who represented the Deutsche Bank in South Africa, founded the Union Corporation.
The deposit is in the Gawib River valley, between the Langer Heinrich Mountain and the Schieferberge, 50 km south-southeast of Rössing and about 100km east of Walvis Bay.
Gencor sold the project to Acclaim Uranium in 1998 for US$800 000 after evaluating the area between 1974 and 1980 and the fall of uranium prices on the market.
The acquisition was made through Acclaim Uranium’s subsidiary Langer Heinrich Uranium Pty Ltd, owned by Lahndrik (SA) of Luxembourg.
Acclaim Uranium spent about US$500 000 on a pre-feasibility study, with hopes to conduct a US$34,3m full feasibility study to be released by October 2000.
The Company said it would start with construction in November 2000 and begin production by March 2002.
The uranium market prices failed to improve, resulting in Acclaim Nuclear putting the project on hold. In the meantime, Acclaim Nuclear changed its name to Aztec Resources.
Although Aztec Resources had said it would not dispose of the Langer Heinrich mine despite the prevailing low uranium prices, the company sold to Paladin Energy in August 2002 for US$85 000.
Paladin Energy officially started operations in late December 2006, scheduling the first shipment for March 2007. The company revised the measured estimate from 20 200 to 22 548 tonnes, while the indicated estimate was 25 308 from 23 800 tonnes.
In March 2007, the production forecast dropped from 1 million to 1.15 million pounds 900,000 pounds and 1 million pounds. The company was confident that by June 2007, the production rate would have reached 2,6 million pounds annually.
In June 2007, Paladin reduced the production rate forecast to 2,2 million tonnes, citing a slow startup process. The 2,6 million pounds for stage one, the company said, would be realised by January 2008.
Paladin, however, achieved the 2,6 million pounds production rate in October 2008, when it produced 650 560 lbs of uranium for the quarter ended 30 September. The company had already started working on stage two with a target of 3,7 million pounds by May 2009. It set the target for stage three at 6 million pounds.
The company proposed to expand operations in August 2009 to increase production from 3.7 million pounds to between 5 and 10 million pounds per annum as part of stage 4.
The environmental impact assessment report stated that Paladin would set up a new satellite mine workshop, expand the existing processing plant, and set up a new satellite crushing plant and a heap leach pad.
Paladin also stated that it would modify the tailings management, set up a temporary contractor’s camp, bring additional power supply to the water abstraction boreholes in the Swakop River, and support infrastructure and services.
Since the expansion would need a lot of water, Paladin proposed to pump 250 000 cubic metres from the Swakop River, but the residents opposed this idea.
In August 2010, Paladin signed a memorandum of understanding with China Guangdong Nuclear Power Group Co for long-term uranium sales, potential participation in Paladin’s growth strategies, and possible expansion of joint venture relationships. Paladin also said it would start shipping uranium to China in 2011. Two months later, Paladin revealed that the ore reserve at Langer Heinrich had increased to 51 577 tonnes.
Four banks – Nedbank Capital, Standard Bank Plc, Barclays Capital and Rand Merchant Bank – opened a facility through the Société Générale to raise US$141m to fund Langer Heinrich’s third stage in August 2011. The facility consisted of US$135m six-year project finance and US$6m for cost overrun.
The China National Nuclear Corp agreed to buy a 25% stake in Langer Heinrich for US$190m in January 2014. China National Nuclear Corporation is a subsidiary of CNNC Overseas Uranium Holding Limited.
When the deal was sealed, the Chinese state-owned company was constructing 12 nuclear reactors. At the time of the transaction, Paladin was targeting to produce 5,7 million pounds of uranium ore.
The prices of uranium dropped drastically in April 2014, forcing Paladin to suspend work on stage 4 at the Langer Heinrich Mine. The Fukushima disaster in Japan on 11 March 2011, caused by the Great East Japan Earthquake, still affected prices.
Stage 4 would have pushed up Langer Heinrich’s output to 8,5 million pounds from the 5,2 million at the time. Paladin was already selling to Canada, the USA and France. The commencement of stage 4 was pushed to 2017 or 2018, depending on market factors.
With the dire financial position persisting, Paladin floated another 24% stake sale in July 2016 to raise US$175m. The China National Nuclear Corporation was offered the stake. In the meantime, Paladin suspended mining activities at the Langer Heinrich mine except for processing stockpiled ore in August 2016. The suspension of mining activities cost 300 jobs.
In March 2017, the China National Nuclear Corporation requested Paladin to determine the fair market value for the Langer Heinrich mine before deciding to buy the additional 24% stake. In July 2017, independent experts determined the Langer Heinrich mine’s fair market value was US$583m. Paladin owed Electricité de France US$277m from a 2012 long-term unfulfilled supply agreement.
The China National Nuclear Corporation declined the offer to acquire the 24% in August 2017. If the sale of the 24% had gone ahead, Paladin would have received US$162m. Langer Heinrich proved unprofitable despite reduced activities that saw the mine producing 1.71 million pounds between June and December 2017, down from the 2,5 million pounds in the previous quarter.
Paladin suspended the remaining operations at Langer Heinrich in May 2018 until prices improved. The company said it would place the mine under care and maintenance.
Although the mine was under care and maintenance, Paladin conducted a US$6,2m pre-feasibility study to operate at a lower cost and recover possible vanadium deposits. The study concluded that Paladin would need US$100m to restart the Langer Heinrich mine.
The amount included US$24m for plant repairs, US$4m for tailings construction, US$22m for back-end upgrade execution and US$50m working capital.
In December 2018, the then Paladin CEO Scott Sullivan said they would consider multiple processing options for the Langer Heinrich mine for a reliable restart.
Sullivan said an optimisation study suggested two key areas – resolving current operational issues to improve the stability and reliability of the Langer Heinrich mine and processing facility to increase productivity and reduce risk.
The other was capitalising on the latest technological developments in the industry that can release further value by lowering production costs, improving throughput and potentially recovering Vanadium as a bi-product.
The Paladin board approved conducting a two-stage pre-feasibility study focusing on improvements to ensure the restart maximised value, improved mineral resource definition through additional drilling of the highest-grade remaining resource, and developed and confirmed processing and operational improvement options.
On June 2020, Paladin said the Langer Heinrich restart plan was complete, and the company would need US$81m for pre-production. Operational expenditure would be US$34m, and discretionary capital expenditure US$47m.
The restart plan confirmed a 17-year mine life for Langer Heinrich with peak production of 5.9 million pounds of uranium oxide per year for seven years.
Paladin’s cash position of US$35m provides financial flexibility, and the Company will only consider a restart when it secures an appropriate term-price contract with sufficient tenor and value to deliver a fair return to all stakeholders.
On 31 March 2022, Paladin Energy launched a A$215m equity raise for the Langer Heinrich mine restart. The Equity Raise comprised a single tranche fully underwritten share placement to raise A$200m and a non-underwritten share purchase plan offered to eligible Paladin shareholders with registered addresses in Australia or New Zealand to raise an additional A$15m.
The company announced on 19 July 2022 that the Langer Heinrich Mine would return to production, with the first volumes targeted for the March quarter of 2024. Paladin said the restart of the Langer Heinrich mine has the support of a supply offer from Duke Energy made in March 2022.
According to Paladin, the restart scope of work will focus on general repairs and refurbishment required to return the existing process plant to operational readiness, coupled with the delivery of process upgrades to increase throughput capacity and operational availability.
