Zambian project approved but construction deferred

Wednesday, 7 January 2009

This article has been updated following Equinox Minerals' 7 January announcement of its decision to defer the Lumwana uranium facility.

The environmental impact assessment report for a $200 million uranium production facility at Zambia's Lumwana copper mine has been officially approved, but the project's owners have decided to defer development until economic conditions improve.

Copper production began in December 2008 at Lumwana, which will be Africa's largest copper mine when it reaches full capacity in 2009 according to owner Equinox Minerals Limited. In addition to its copper reserves, Lumwana has uranium resources of 16 million pounds U₃O₈ (6154 tU), with 13 million pounds U₃O₈ (500 tU) within the designed copper pits. A feasibility study showed that it would be economically viable to treat the uranium mineralisation on site, and an Environmental Impact Assessment was prepared and submitted to the Environmental Council of Zambia (ECZ) for approval in July 2008.

Lumwana copper plant: one day to be joined by uranium? (Image: Equinox Minerals)

The proposed uranium processing plant would produce 2 million pounds U₃O₈ (770 tU) per year for the first five years, as well as 12,800 t of copper concentrate per year, and Equinox has previously set a target of 2010 for first yellowcake production.

ECZ approval was granted at the end of December, but Equinox has now annnounced that it is deferring the project "due to current difficulty in international project financing as well as current market prices for uranium oxide." The company will stockpile mined uranium ore at Lumwana until conditions improve sufficiently for the uranium project to go ahead.

Zambia passed legislation clearing the way for uranium mining to start in the country in October 2008, and Australia and Canada-based Equinox is not alone in working towards producing uranium in Zambia. Canadian uranium miner Denison is due to complete a feasibility study later this year for the Mutanga Project (formerly called the Kariba Uranium Project), which it estimates should ultimately produce 1.5 million pounds U₃O₈ (577 tU) per year. Albidon Ltd of Australia and African Energy Resources Ltd suspended a project feasibility study into the Chirundu uranium project shortly after the new legislation was passed, citing prevailing financial conditions.