Hundreds employed to kickstart Langer Heinrich
Offtake agreements with five majors
In the three months ended 31 March 2023, Paladin Energy invested more than N$300 million in the Langer Heinrich uranium mine.
More than 600 contracted personnel have been deployed to the site of the Langer Heinrich as majority shareholder, Australian-listed Paladin Energy, ramps up restarting the uranium mine in the Namib.Releasing its latest quarterly activities report on the Namibian Stock Exchane (NSX), where Paladin is dual-listed, the company said the restart project at Langer Heinrich was estimated to be approximately 40% completed.
Paladin has a clear focus on meeting its target of resuming production at Langer Heinrich by the first quarter of 2024, it said.
The project is currently progressing according to plan and within the designated budget of US$118 million, or just over N$2 billion, Paladin added.
In the three months ended 31 March 2023, Paladin spent US$2.4 million, about N$43.4 million, on operations at Langer Heinrich. About N$262.3 million or US$14.5 million was pumped in to the mine’s restart project.
At the end of March, Paladin had a cash balance of US$147.2 million, excluding restricted cash of US$1 million, and zero corporate debt.
Significant progress
Commenting on the contractors deployed at Langer Heinrich, Paladin said the team has made significant progress on critical work packages, such as the ongoing repair and refurbishment work, the commencement of civil construction, and the delivery of the second Hydrosort classifier to the site. Additionally, the contract for the drum packaging plant has been awarded.
Paladin CEO Ian Purdy said: “Paladin continues to progress restart activities at the Langer Heinrich Mine in Namibia. The work executed to date, combined with our well-defined pathway to production and onsite project execution team ensures that the project remains on time and budget with first production targeted for the first quarter of 2024.
“With a strong uranium contract book and a world class asset in the Langer Heinrich Mine, Paladin remains well positioned to deliver long term value for our stakeholders.”
Uranium market
Paladin is actively pursuing partnerships with top-tier industry players through various means such as request for proposal (RFP) processes and off-market discussions. This is in line with the company's objective of securing industry-leading offtake agreements well in advance of production.
Paladin has successfully secured uranium offtake agreements with five prominent counterparties across the United States, Asia and Europe, the company said.
The company has also completed the contract negotiations for the remaining tender award and anticipates executing the offtake agreement within the current quarter.
Paladin has outlined a strategy to secure contracts well before the start of production, it said.
These contracts come with varying durations and pricing structures, including base-escalated, fixed-price, and market-related pricing mechanisms. In addition to the existing market-related contract with China National Nuclear Corporation (CNNC), this approach ensures that Paladin retains substantial exposure to the upward trend in uranium market fundamentals. CNNC owns 25% of Langer Heinrich.
Paladin has initiated commercial discussions with conversion facilities and shipping companies in preparation for its imminent return to production, it said.