New beginnings for Langer Heinrich
Restarting uranium mine could cost U$81 million
08 July 2020 | Business
“Paladin’s focus is to restart operations at Langer Heinrich uranium mine,” said managing director Ian Purdy.
“Our existing infrastructure and ten years of success give Paladin the opportunity to quickly enter the improving uranium market.”
Paladin owns 75% of the Langer Heinrich uranium mine; the remaining 25% is owned by CNNC Overseas Uranium Holding Limited, which is a subsidiary of China National Nuclear Corporation (CNNC). Langer Heinrich has been operational since 2007 and has sold more than 43 million pounds of uranium oxide. Production ceased in August 2018 after uranium prices dropped to a record low.
However, the uranium price has increased significantly since the beginning of the year. In January, the price stood at U$25 a pound, but has now risen to U$34 – more than 36%.
“Since the Fukushima nuclear disaster, the uranium price has plummeted by around 60%,” Purdy said. However, Purdy said that the current uranium supply cannot meet current demand. According to him, 135 new nuclear reactors are under construction worldwide, which will further increase demand by 2040.
This gives Paladin an ideal opportunity because the necessary infrastructure is already in place at Langer Heinrich. However, an investment of U$81 million (around N$1.38 billion) is required for a restart. Of that, U$34 million is earmarked for plant maintenance, reagent, spare parts, and other working capital purchases, as well as recruiting and mobilizing contractors.
Paladin plans to use the remaining amount (U$47 million) to expand the facility. Among others, the reliability of the system is to be increased and several “known problems” are to be remedied.
This includes replacing defective pipes. There are also other structural and electrical problems that need to be addressed. Purdy believes given these changes, the mine’s production should increase from 85% to 95%.
While Purdy did not provide a date for the mine to restart, he lists a rough schedule. Accordingly, Paladin has set itself the goal of reaching 80% of full production within six months. After a year, the mine should be fully operational again.
The company also set itself the goal of producing 5.9 million tons of uranium oxide (annually) for the first seven years. He estimates the mine’s lifespan to be 17 years.