Nine years after its formation in Australia in 1999, Extract Resources Ltd discovered what would become the world’s third-largest open-pit uranium mine in Namibia.
The Canadian company Kalahari Minerals held about 42.8% of Extract Resources. Rio Tinto had a 14.22% stake in Extract Resources Ltd and 11.1% in Kalahari Minerals.
Extract Resources formed a Namibian subsidiary – Swakop Uranium – to manage the Namibian properties in 2006.
When Extract Resources started prodding the Namib Desert sands for uranium in 2008, there were two prospects – the Ida Dome and the Rössing South. The two were bandied together as the Husab project under EPLs 3138 and 3439.
Anglo-American Corp had previously worked the Ida Dome prospect in the 1970s but left empty-handed.
Ida Dome is about 100km from Rössing Uranium Mine. It has seven other prospects – Ida Central, Swakop West, Garnet Valley, Hook, New Camp, Hollands Dome, and Ida East.
A scoping study conducted by Extract Resources in October 2007 confirmed that Ida Dome had the potential to support a viable open pit mining operation developed to feed a 6 million tonnes per annum processing plant utilising proven sulphuric acid leach, ion exchange and solvent extraction technology.
The study estimated annual production at 2.923 million pounds of uranium oxide with capital costs estimated at US$211m (+/- 30%) and operating costs of US$29.15 per lb U3O8 (+/-30%).
In January 2008, Extract Resources said that Rössing South had the highest grade of uranium oxide, with 108 million pounds at 430 parts per million. Rössing South, about 7km from Rössing Uranium Mine, comprises Zone 1 and 2.
Extract Resources and Kalahari Minerals merged in September 2008 but dissolved the merger in November 2008 over fear that the project would end up with Rio Tinto.
In August 2009, Extract Resources said the preliminary results for Rössing South indicate that the project could support a viable open pit mining operation developed to feed a 15 million tonnes per year agitated tank sulphuric acid leach processing plant.
Estimated indicated resource at Rössing South was 122.2 million tonnes at the zone-one deposit, with a further 118.8 million tonnes at the zone-two.
The report also estimated the annual production of 14.8 million pounds of uranium oxide with capital costs of US$704 million and operating costs of $23.60 per pound.
Swakop Uranium said uranium oxide production at the Rössing South would start in the fourth quarter of 2013. Production would rise to 15 million pounds annually by 2015. Rössing South’s life of mine was set at 20 years. That was in January 2010.
There were media reports in February 2010 about the Korea Electric Power Corp. and state-run Korea Resources Corp. bidding jointly for a stake in Extract Resources Ltd., and about Russian state-owned Rosatom making a move on Rössing South.
Ria Novosti said Rosatom had applied to develop the Rössing South uranium deposit and that Russia was ready to construct two hydroelectric power stations in Namibia.
The environment ministry approved Swakop Uranium’s environmental impact assessment for the Husab project in January 2011. In February, Extract engaged Rio Tinto regarding possibly combining the Rössing Uranium mine and the Husab project. This arrangement was abandoned in 2013.
The mines ministry granted the Husab project a mining licence 171 in December 2011.
The buyout process
Big mining companies started coming in with the news that the Husab project uranium deposit was massive. Taurus Mineral Ltd, a subsidiary of China General Nuclear Power Company (CGNPC), Uranium Resources Co. Ltd., and the China-Africa Development Fund led the pack.
Taurus Mineral Limited was incorporated on 21 April 2011/4/21 as a private company limited by shares registered in Hong Kong.
Extract Resources offered the state-owned Epangelo Mining 10% in the Husab project in November 2011, while the China Guangdong Nuclear Power Corp was negotiating to buy Kalahari Minerals’ shares in Extract Resources for US$990m in December 2011.
The China Guangdong Nuclear Power Corp also offered Extract Resources US$2,2b for the Husab project on 14 December 2011, depending on the outcome of the negotiations with Kalahari Minerals.
While the China Guangdong Nuclear Power Corp was negotiating with Kalahari Minerals, it was also courting Epangelo with the same offer of 10% and discussing with Rio Tinto for its 11.5% shares in Kalahari Minerals.
Rio Tinto finally agreed to sell the Kalahari Minerals stake valued at US$330m to the China Guangdong Nuclear Power Corp in January 2012. Rio Tinto also said it would decide whether to sell its 14.2% stake in Extract Resources.
The Kalahari Minerals-China Guangdong Nuclear Power Corp deal went through in February 2012, opening the way for the final takeover of Extract Resources.
Indeed, Taurus Mineral made its move on 14 February 2012 when it offered Extract Resources an unconditional A$2,2b bid for the Husab project takeover. Extract Resources took up the offer on 30 March 2012. Swakop Uranium became a subsidiary of Taurus Mineral Ltd.
The Epangelo Mining deal to buy 10% of Swakop Uranium went through in November 2012. The stake was valued at US$2,2m.
The Construction
The first blasting happened on 12 March 2014 in the Namib Desert. In April 2014, former mines minister Isak Katali and China Guangdong Nuclear Power Corp general manager He You presided over the groundbreaking ceremony to mark the beginning of the construction in 2015 and production set for 2017. Former President Hifikepunye Pohamba commissioned the mine on May 2014.
Cameco Corporation signed an offtake agreement with the parent company of the China Guangdong Nuclear Power Corp, General Nuclear Power Holding Corp, on 9 May 2014 for the supply of Husab mine uranium.
By 15 April 2016, construction at Husab Mine had reached 96%, but the biggest worry was the water supply. Despite the water worries, Husab Mine produced its first drum of uranium oxide in December 2016. By January 2018, Husab Mine had produced over 1,000 metric tonnes.
Between 2018 and 2022, Swakop Uranium said the erratic water supply had cost them N$4.1 billion since the Husab Mine had milled 8% below the target and sold 11% below the budget. In its 2021 Sustainability Report, Swakop Uranium said it had lost, on average, 400 tonnes of uranium oxide annually since 2018.
Swakop Uranium’s executive vice president Irvinne Simataa said they needed 300 million cubic metres of water if the mine was to embark on three other projects to create about 2 000.
Simataa told Prime Minister Saara Kuugongelwa-Amadhila that the company lost 39 production days in 2022 due to the sulphuric bloom that added to the water constraints. As a result, Simataa said, they produced 4 000 tonnes instead of 4 700.
