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Swakop Uranium

The last big hurdle:


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Swakop Uranium is going to contribute to the economic development of Namibia in more ways than one. Asides from attracting significant foreign investment, the company and its Husab mine will create jobs, provide training and invest in local schools to align itself with ‘Vision 2030’. IndustrySA speaks to Director of communications and stakeholder involvement, Grant Marais to find out more.


Swakop Uranium Swakop Uranium’s Husab mine project is one of the most important in the history of Namibia. In last month’s edition of IndustrySA we looked at the history of the project and found that the Husab mine will be one of the most significant in the global production of uranium. Owned by China General Nuclear Power Company (CGN) through its entity Taurus Minerals (90%), and the Namibian state-owned mining company Epangelo (10%), Swakop Uranium and the Husab mine represent the largest ever mining investment to date from China in Africa. The investment is also the largest investment in Namibia since its independence. More than US$100 million (N$1 billion) was spent to get the project to the construction phase and a further US$2 billion (N$20 billion) will be required to bring the Husab Project to fruition. The Husab mine has the potential to produce 15 million pounds of uranium oxide (U3O8) per annum. This is more than the total current uranium production of Namibia and will elevate the country past Australia, Canada and Niger to second place on a list of the world’s leading uranium producers, behind only Kazakhstan. As we found out last month from Grant Marais, Director of communications and stakeholder involvement at Swakop Uranium, the project has so far not seen any delays and now attentions are turning to the issues that will surround production when the mine is fully operational – water

and power. “I don’t foresee any problems with water at all; in fact, I see the bigger challenge to be power,” explains Marais. “We have a temporary water line in place from a nearby reservoir. We are sharing this reservoir until our permanent pipeline is complete, which will happen in 2015. It’s a 70 km pipeline and we’re busy with construction right now.” When it comes to water, the pipeline (temporary or permanent) is not the worry. Critics have raised concerns over where the water will be sourced from. Again, Marais states that this issue has been addressed and resolved. “Traditionally in Namibia people use water aquifers; natural water aquifers which water is pumped out of. There are two aquifers on the coast, namely the Omaruru Delta (Omdel) aquifer and the Kuiseb aquifer. If we come on stream using around seven million cubes of water per annum, we’ll quickly deplete those reserves,” he says. “When the French company Areva were building the Trekkopje Mine, just outside of Swakopmund, they built a desalination plant which has a capacity of more than 20 million cubes per annum. The Trekkopje mine has subsequently been placed in care and maintenance. We have signed an offtake agreement with the Namibia Water Authorities and they will source water from the desalination plant so we will not touch the natural water – at significant cost to ourselves. “We are very aware of the water issue and I think we have mitigated it.”



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Two years on from the Alexander Forbes merger, Marsh Africa’s strong capabilities servicing the African continent have seen our growth ambitions as a pan-African leader come to fruition. “They say it’s the journey, not the destination that matters and our journey over the past two years has seen the business flourish to exceed expectations,” says Debbie Geraghty who heads up Mining, Metals and Minerals at Marsh Africa. Marsh has the strongest mining practice in the industry, with over 200 risk and insurance colleagues specializing in mining, metals and minerals, with more than 10% of that expertise based in Africa. Mining companies are facing greater challenges as they are progressively moving into more remote areas as they expand into geographies with regulatory regimes that are changing and can vary widely from one country to the next. This challenge not only requires that companies take a more strategic and customized approach to risk transfer, but also brings to light the need to deliver local expertise wherever our clients do business. “We’re in a fortunate position as the strength of our business and the way we work makes it easy to attract the best talent in the industry. Since the merger, we have had an excellent retention rate for existing clients and in 2013 we had our best year ever for new business,” she says. This has also meant the company has been able to employ additional staff to further bolster their offering to market. Marsh provides risk and insurance advisory & placement services to 87% of the Fortune Global 500 companies and the majority of the world’s major mining operations. This global expertise along with our ability to deliver economies of scale and international best practice ensure the delivery of consistent quality solutions to our clients. However, it’s not only about our energy, enthusiasm or our ability to have face-to-face negotiations with decision makers. We also make sure that we innovate and have recently developed our risk analysis tool to provide detailed, focused benchmarking of Assets and Business Interruption programmes. This is the most sophisticated tool of its kind in the industry and allows us to benchmark property damage and business interruption insurance programmes. Key challenges faced by mining companies range from property challenges to casualty and terrorism and political violence. Marsh provides structured programmes to our clients to deliver policy limit options to reflect our clients’ event risk exposures when dealing with risks such as natural catastrophes. With mining activity spread extending to geographies prone to changing seasonal weather patterns this type of cover has become vital for client consideration. Companies also need to assess operational challenges associated with more difficult mining environments such as deep underground, under water or high altitude mining and ensure they mitigate this risk effectively. Such risks include sudden and accidental pollution, which can have considerable environmental impacts and affect local populations. Other risks include employee exposure to pollution associated with mineral extraction. Marsh is the pre-eminent provider of Mining Sector business to the international insurance and reinsurance market. Our client base ranges from small single site operations to some of the world’s leading multi-national corporations and covers virtually every form of mining in all corners of the world. This diversity gives our highly experienced team a broad based knowledge of the exposures and requirements of clients within this very specific and challenging sector. With the size of our portfolio and our global network, we offer a real advantage to clients who are in need of an Insurance Solution. PAGE 4 APR 14

Swakop Uranium POWER As for powering the mine, you can probably imagine a serious amount of fuel will be required. A large scale load-and-haul method will be used and this will required the use of 39 haul trucks, each with a payload of 327 tonnes, four front-end loaders, three rope shovels and four hydraulic face shovels. When the haul trucks are fully loaded they will weigh around 570 tonnes and throughout the life of the mine, it is expected that 680 million litres of diesel will be consumed. Initially, during the first year of the project, diesel generators will supply the power. These will soon be replaced by a temporary supply from NamPower. After two and a half years, NamPower will provide permanent power at 220 kV. Marais says that discussions about power supply are ongoing with NamPower and ideas for a new power station are already being considered. “Namibia is very reliant on Eskom which has some major delivery issues right now. These may not be resolved in the short-term, so we are in discussions with NamPower. We have indicated to them our power requirements when we are in full production,” he says. “We’ve spoken to NamPower about the immediate commencement of construction of at least one 100 MW power station in or around the coastal region. This could take any form, maybe HFO, coal or gas, but whatever they decide, we want them to treat this as a critical issue. In the meantime, we are busy planning alternative power supply arrangements, which should be regarded as a fall-back option.”

Swakop Uranium is always keen on using existing infrastructure so that employment and turnover can be created for the local economy, but Marais says when existing infrastructure cannot provide, the company would look for alternative arrangements in need.

RECRUITMENT DRIVE The creation of jobs has been one of the standout factors when looking at the Husab Mine’s benefit to the local economy. It is reported that during construction, around 6000 jobs will be created. Marais confirms that when the mine is fully operational, Swakop Uranium will employ about 1500 people, increasing employment in Namibia’s mining sector by 17%. “Our recruitment process is very robust. We advertise in all local newspapers initially, looking for local skills. If we are unable to find skills locally, we would look to the international labour market, including South Africa, as it has a nice mining base. “Obviously, we are looking for engineers; mining engineers, chemical engineers, electrical engineers, and similar disciplines. When we have mining sorted, we will start looking at the processing team, which is critical. “Then we have the support functions including environmental specialists, health and safety people and laboratory people. The list is endless. “After we’ve done with that skills base, we have to look at supervisory mining, supervisory processing, export people, finance people, operators, drivers and the like,” explains Marais. Importantly, in-house training is set to be provided for

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company profile various positions providing yet a further benefit to Namibia, building a local skills base that will eventually be able to take care of the day-to-day running of the mine. “We will train our drivers and operators in-house. They will be driving massive pieces of equipment. We will probably have around 1000 drivers and operators, so it’s an important group,” says Marais. “There is a significant recruitment drive underway right now. We are finding that there is a shortage of local skills, so we will have to bring in some outside expertise and build training programmes so that local people can take over.”

A RESPONSIBLE CITIZEN Training people and contributing to economic development is part of Swakop Uranium’s input to a national drive which is focussing on improving education in Namibia. “There is a document in Namibia called Vision 2030. Part of that is a national vision surrounding the education of Namibians. We have aligned ourselves with that national vision and that is why we are committed to training people as part of our long-term sustainability plan. “There is no legal requirement for us to do this in Namibia. Bringing in expatriates to fill the gap is a short-term plan. The long-term plan is to train local people for senior roles. That’s why we’re taking people out to China so that they can get their Masters and Doctorates in mining, mining processes, geology and similar disciplines,” explains Marais. Swakop’s influence, however, goes a lot further than the training of employees and potential employees. “We are getting involved with local schooling, doubling capacity and improving education more generally there because bringing people into an area has an impact on the number of seats available at schools for employee’s children. We have had board approval to buy land and participate in the construction


of the school. “We will also be developing SMEs to participate in the supply chain for the life of mine,” says Marais.

NO SLOWDOWN When the results of exploratory drilling in the Husab area were returned and released in 2008, the world was facing a global economic slowdown, the likes of which had not been seen in modern times. While this slowdown had a major impact on businesses across the globe, the uranium market remained buoyant and Swakop Uranium felt little impact. “Whilst there was a global slowdown, the resources sector did not suffer in a major way, certainly not the uranium sector and certainly not up until Fukushima. “I don’t think the global slowdown had too much of an effect, there was already pent up demand from the existing reactors and planned reactors and this had to be met with increased supply and that would have continued despite the financial situation in the world.” The limited impact of the global financial crisis is demonstrated by the speed in which the mine has gone from exploration to development. “From 2008 to 2015, that is almost record time for getting a mine from discovery to production, it’s been radically quick; some mines take 15 years to come on stream,” says Marais. And there will be no slowdown in the coming months. With all deadlines met so far, it seems as though this project will fulfil its undoubted potential and help to put Namibia on the global mining map. The next milestone is the completion of all construction activities and the commencement of full scale production in both the mine and processing plant – an exciting prospect and one that Swakop Uranium and its partners are on track to deliver at the end of 2015.


Swakop Uranium SWAKOP URANIUM AND M-TECH PARTNERING IN CREATING A SUSTAINABLE MAINTENANCE CONCEPT Years ago, the consequences of failure were relatively slight and the demand for maintenance was activated purely by breakdown. However, due to the introduction of large, complex systems in production and refined production-control as well as the growing awareness of the natural environment and increasing labour costs have made the improvement of maintenance control imperative. Improvement of control presupposes the introduction of more sophisticated maintenance concepts. Therefore, when Swakop Uranium enquired from M-Tech (see the advert alongside this article) about the establishment of an ideal maintenance development process for their Processing Plant in the earlier part of 2013 the M-Tech Team went to work. The brief from their Managing Director, Dr Jasper Coetzee was that their proposal needed to include all the components to start the maintenance of the mine on an excellent footing. This, after all, is M-Tech’s focus and area of expertise! The M-Tech project team knew the importance of having a maintenance environment that is designed to be able to serve the plant appropriately. They also realised that in meeting the longer term objectives of successfully operating the plant system, it is essential that all aspects of the system be considered on an integrated basis. This is especially true of the support capability. Of particular importance is the determination of the maintenance needs of all critical equipment, with a view to ensuring that the necessary facilities and skills exist to service the maintenance demand. This meant designing a state of the art Maintenance Concept for Swakop Uranium. This Maintenance Concept is the set of rules prescribing what maintenance is required and how demand for it is activated. It includes identifying the critical equipment and their main subcomponents. Thereafter the main tasks to be performed on these units are determined and translated to workshop requirements, maintenance facilities, and equipment as well as establishing which skills are needed to execute the required tasks. A list of suggested support and test equipment is provided and the workshops are designed to ensure provision of adequate logistical workow to facilitate high Operational Readiness of the plant. Maintenance information and operational systems guidelines are developed to enable the selection of an appropriate CMMS (Computerised Maintenance Management System) and guidelines for maintenance organisational design are determined. The final step is the generation of a personnel training plan as well as the development of first approach maintenance strategy. In summary it is clear the development and execution of such a maintenance concept is a huge challenge and we wish Swakop Uranium well in continuing their drive APR 14 PAGE7 towards excellence. +264 (0) 61 419 600

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