Last month the Governor of Erongo Mr Cleophas Mutjavikua was quoted as saying that ‘Not only does Namibia have good nuclear resources and safety standards, but we need to turn this very important resource into energy for the Namibian people’. In other words he wants a nuclear power station in Namibia. To be polite, it is an idea that has almost no economic merit.
The first problem is that we could not use the yellow cake uranium that we currently export for generating electricity but would have to produce low-enriched uranium, U235 which is used in nuclear power stations. Making a profit now is almost inconceivable given the cost of building and operating an enrichment facility. After the nuclear accident at disaster at Fukushima in Japan in 2013 many countries moved away from nuclear power and there is now massive excessive capacity in enrichment facilities globally. As a result it is very improbable that a new Namibian facility could be commercially viable.
Once we have lost lots of money beneficiating Namibian uranium yellow cake into U235 then we would have to build a nuclear power plant. Since the Fukushima accident nuclear power has gone out of favor in most developed countries and so the engineering firms that build and export nuclear power plants to places like Namibia are very hungry and desperate for new business. Germany has abandoned its nuclear power industry altogether. Only the Chinese and to a lesser extent the Indians are involved in a serious nuclear energy expansion program which involves the construction of many nuclear facilities.
If we did decide to build a nuclear power plant in Namibia we would suddenly find ourselves with many new ‘friends’. One need only ask former president Jacob Zuma how many ‘friends’ he managed to find once he decided to build a new nuclear power plant in South Africa. There are at least a dozen countries ranging from Canada to Russia to China who would be more than willing to build a nuclear power plant for Namibia and fulfil the governor’s dreams. And of course many of these nuclear power plant exporters, as the South Africans could attest, would come to Namibia bearing ‘gifts’…. very big gifts.
Furthermore if we started an enrichment facility, this would almost certainly send up red flags in developed country capitals and would get the very unwanted attention of the intelligence services in developed countries. This would be compounded by the fact that last month Rio Tinto sold majority 69% ownership in the Rossing uranium mine in Erongo to Chinese state-owned China National Uranium Corporation Limited (CNUC) for about N$1,5 billion. The other 31% is owned by the Iranian Foreign Investment Corporation, the Industrial Development Corporation of SA and the Government of Namibia. The fact of partial Iranian ownership of Rossing combined with any uranium enrichment program would just spell trouble for Namibia.
The purchase of the uranium deposits at Husab and sale of Rossing to the Chinese is a real blessing for Namibia. Uranium has been decreasing in price since the Fukushima accident. In Namibia we have a tax free uranium mine at Trekopje owned by the French company Areva Resources Southern Africa, The mine ceased production in 2013 and has been under care and maintenance since. The only non-Chinese uranium mine in Erongo is Langer Heindrich mine which in 2018 produced a mere 394 tonnes of uranium in 2018 , down from over 2000 tonnes in 2013. The Chinese need uranium from a politically safe supplier and because of the country’s long and warm relationship with China, Namibia fits that bill perfectly. The reason why Chinese ownership is a blessing for Namibia is that ultimately the new owners of Rossing and Husab are not miners in the same way as Rio Tinto. For Rio Tinto they would only produce uranium if the price on world market covered costs. Since Fukushima this has been a challenge for everyone in the uranium industry. But the Chinese miners are directly linked to the electricity utilities in China and they will need the uranium for many years to come until China is willing to shift its energy mix away from nuclear in a profound way. They will buy come what may. The Chinese will continue to buy our uranium for many years to come and this is to Namibia’s benefit.
The real reason why the governor’s proposed nuclear power station is just a non-starter is because of the economics of nuclear power. First, the cost of uranium is a tiny percentage of the total cost of nuclear power. Having uranium in the ground gives Namibia almost no commercial advantage in generating much needed nuclear power. Second since Fukiushima nuclear power has become more expensive over time because the public is demanding ever more security guarantees. Nampower is proceeding with a much better option for Namibia - wind and solar power which in terms of cost per unit are already on par with the lowest cost energy sources. While solar and wind are not available all the time the storage issue will be resolved in time. So the good governor of Erongo should stick to better energy resources his region has in abundance- wind and sun to generate electricity and let the Chinese buy our uranium.
Lastly, a word of caution is in order. In early 2017, before the coup in Zimbabwe, I attended a diamond conference in Antwerp and Mugabe’s last minister of Minerals addressed the audience and said that Zimbabweans were in five joint ventures with Chinese diamond companies but the Chinese appeared never to make a profit. The Chinese were obviously mining in Zimbabwe so as to improve their health. Moreover, the minister said that they always conducted board meetings of their companies in Mandarin and of course the Zimbabwean partners understood nothing of what was happening. As a result the tax authorities in Namibia must be very cautious to assure that the new owners of our uranium mines conduct their affairs in a manner that the owners of the uranium i.e. the people of Namibia get their fair share of economic benefits and do not give it freely to the Chinese or anyone else.
These are the views of Professor Roman Grynberg and not necessarily those of UNAM where he is employed. 
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