An Uncertain Future for Uranium Mining in Africa
blurb:isstoday:220109uranium
22 January 2009: An Uncertain Future for Uranium Mining in Africa
The prospects for uranium mining in Africa are far less positive at the start of 2009 than in previous years. The decrease in demand for diamonds, gold, platinum, copper and uranium over the last two months – due to the global economic crisis - has resulted in mine shutdowns, delays in project implementation, and job losses. In addition, environmentalists fear that mining companies will forego environmental protection strategies, as resources would be spent on operations rather than on managing environmental waste.
Uranium mining in Africa – which is on the increase in some countries like Niger - raises a number of security concerns for foreign and African governments. Several African countries including Nigeria, Sudan, Egypt, Kenya and Uganda have publically indicated that they wish to build nuclear power stations in future in order to keep up with local demand for energy. These countries have the right to develop such technologies under Article IV of the Non-Proliferation Treaty (NPT). However, security structures must be created to prevent an attack on a nuclear plant. In addition, countries must put measures in place to counter illegal smuggling and the proliferation of nuclear materials, including uranium. Mining companies face similar security challenges, and therefore, must adhere to strict global security standards, especially in countries that are vulnerable to conflict.
Since July 2008, uranium mines in Western Australia have reportedly been shutting down, and countries such as Portugal, the United Sates of America, and Russia are now reconsidering their long-term mining projects. The impact of mine closures and suspension of operations are certainly not only experienced in the developed world, as developing countries, some of whom are highly dependent on the mining industry as part of their local economies, may be confronted with greater economic challenges.
In countries such as Zambia, where up to 80 percent of the country’s foreign exchange comes from the mining sector; mining companies are re-evaluating their future plans. One such company is Equinox Minerals, which started production in December 2008 at its Lumwama copper mine. The company has decided to halt construction of a treatment plant for its uranium ore due to weak uranium prices. Equinox planned to build such a plant after receiving permission from the Zambian government in 2008; however, the company has since decided to stockpile the uranium at Lumwama until the market price of uranium oxide increases.
The current situation in Zambia is certainly not unique and unfortunately, the mineworkers in developing countries will suffer most, as thousands stand to lose their jobs if mines suspend operations. In addition, increased inflation and lower rates of foreign direct investment in Africa will challenge governments to consider alternative sources of income. Africa certainly needs to assess its economic future in relation to global trends, especially when considering current and future mining operations.
There are, however, a few positive developments for the uranium mining sector in Africa. The French company, Areva, has indicated that they will continue work on building the largest uranium mine in Africa, at the Imouraren uranium deposit in Niger. According to Areva, the mine will produce 500 tonnes (tU) per year and will operate for at least 35 years. If the mine is successful, Niger will become the second largest uranium producer in the world, which will certainly increase the GDP of that country. However, it remains to be seen which actors will benefit most from the project.
Another country that could soon benefit economically from mining is Madagascar. The Secretary General at the Ministry of Finance, Henri Bernard Razarkariasa, has indicated that increased interest in the country’s mineral resources from foreign companies could help the country reach its 7.5% GDP target for 2009. Exploration companies are currently looking for oil, gold, platinum and uranium in Madagascar, a country that is considered one of the poorest countries in the world according to the United Nations Human Development Index.
The future of uranium mining in Africa is definitely not certain. African states should proceed with caution when pursuing new uranium mining projects, as early promises of job creation and increased foreign exchange may quickly disappear if mines are suddenly forced to shut down. Furthermore, African states must carefully consider local resource and security needs before agreeing to export commodities such as uranium. At a time where mining companies are becoming more strategically focused, African governments should align their economic policies accordingly, in order to protect the most vulnerable actors in the global economy.
Amelia du Rand, Junior Researcher, Weapons of Mass Destruction Project, Arms Management Programme, ISS Pretoria (Tshwane)
