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move to extend life of rössing’s

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    Move To Extend Life Of Rössing’s Namibia Mine
    By Charlotte Mathews
    11 Nov 2008 at 09:27 AM GMT-05:00

    Rössing Uranium, which is 69% owned by Rio Tinto, is examining ways to exend the life of the mine beyond its official estimate of 2021, says MD Mike Leech.

    JOHANNESBURG (Business Day) -- The mine, which was originally scheduled to close last year, contributes 7% of Namibia’s gross domestic product, and employs about 360 people.
    The company spent about $N4.3 million ($432,248) last year on education funding and support, including technical skills and mathematics and science tutorship for schools, so its loss would be a blow for the region and the country. Rio Tinto, through Rössing and its uranium mines in Australia, is the second-largest uranium producer in the world.

    Five years ago, the spot uranium price, which had lingered at about $10/lb for about a decade, started to climb on rising global energy demand and plans to build new nuclear power stations. The spot price topped $130/lb last year, encouraging a flood of new exploration and expansion projects, including in South Africa and Namibia. Those projects may not be as viable after the fall of the spot price to $46/lb now.

    Rio Tinto CEO Tom Albanese told reporters on a visit to the group’s southern African operations last week that Rössing was negotiating to pick up more of the new generation of contracts to supply nuclear plants, and was in a good position to do so as other projects were less certain in their production profiles.

    He said the long-term contract price of uranium was stable, and well above the spot price. Rio Tinto did not disclose costs at Rössing, but said the mine was profitable in this market environment. Rössing Uranium has been ramping up production since 2001, when it made 2,751 tons of U308 or yellowcake. This year management is confident production will reach 4,000 tons, its highest level since 1990.

    Rössing is targeting a rise in production from 2012 to about 5,500 tons of U308.

    GM of projects André Genis said this would come from the introduction of heap leaching or expanding the existing tank leaching plant. Various initiatives to improve operational efficiencies were under way.

    Heap leaching, which is being researched, would enable Rössing to treat lower grade material from mining and stockpiles.

    If studies are positive, first heap leach production could be possible by the first quarter of 2011, and add up to 2000 tons of U308 a year to the mine’s output.

    To support higher levels of production, Rössing is exploring resources in three areas near the pit.

    Around the lease area, other companies are exploring for uranium but in the present market it could be more difficult to finance new mines.

    Genis said there could be opportunities for co-operation between Rössing and its neighbours and “there have been approaches about joint mining and processing”.

    Rössing is studying the feasibility of building its own 1200-tons-a-day sulphuric acid plant after supply disruptions hit the global mining industry last year. Sulphuric acid is used in concentrating the uranium.

    Eight months ago, when prices were lower and exchange rates more stable, Rössing estimated it would cost about $80 million for the plant and $30 million for associated infrastructure, but prices are likely to be steeper now.
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