Uranium back in the green

Spot price surges
Namibia's uranium mining sector is expected to return to positive growth this year and next year after contracting in 2022.
Jo-Maré Duddy
  • 11 Months Ago
Fuelled by a recovering the uranium prices, Namibia’s uranium mining sector is expected to grow by 14.8% this year, followed by 3.0% in 2024.

Last year, the sector contracted by 2.5%.

“The uranium mining sector is expected to return to growth in 2023, with robust growth rates as mines take advantage of improved prices,” the Bank of Namibia (BoN) says in its just-released Economic Outlook Update.

Speaking at the recent monetary policy announcement, BoN governor Johannes !Gawaxab said the uranium spot price continued to increase since the last meeting of the central bank’s monetary policy committee (MPC) in October.

Higher prices are driven by a bigger demand for cleaner, safe and secure energy, as well as supply interruptions, !Gawaxab said.



Demand

According to Trading Economics, the uranium spot price in is currently above US$80 per pound, the first time since January 2008. The price has increased by US$32.60/lbs or 66.7% since the beginning of the year.

“Fossil fuel volatility and decarbonisation goals drove countries to extend the life of existing generators and increase investments in new plants, led by China's pledge to build another 32 nuclear reactors by the end of the decade. The optimistic demand outlook aligned with lower nuclear fuel inventories for utilities, triggering large near-term purchasing activity,” Trading Economics said.

It added: “The latest data showed that European inventories fell by 21% since 2018. Supply of enriched uranium has turned scarce as Western generators shunned a portion of Russian nuclear fuel, compounding shipping halts due to insurance restrictions and stressing capacity limits for Western enrichers. Additionally, some miners in Niger suspended operations due to the country's coup, while Canada’s Cameco revised production for the year sharply downwards.”



Economic impact

Namibia has exported nearly N$12.3 billion worth of uranium in the first ten months of this year, a fraction of it re-exports.

Most of Namibia’s uranium is exported to China, data from the Namibia Statistics Agency (NSA) shows. The superpower is the majority shareholder in Husab and has a stake in Rössing Uranium.

NSA stats furthermore shows that uranium mining’s nominal contribution to the country’s gross domestic product (GDP) has surged from nearly N$1.4 billion in 2015 to about N$4.1 billion last year.

Its contribution to GDP has increased from 0.9% in 2015 to 2% in 2022.

Namibia in 2022 produced 5 613 tonnes of uranium, making it the third biggest uranium producer in the world.

Uranium is expected to trade at US$83.19 by the end of this quarter, according to global macro models and analysts’ expectations, Trading Economics says. Looking forward, Trading Economics estimates it to trade at 88.65 in 12 months’ time.