Second Namibia Desalination Plant to Replace Areva Supply

Namibia will name a private investor to help build the second desalination plant in the nation, a 1.5 billion-Namibian-dollar ($145 million) project to replace water supplied by Areva SA (AREVA) for uranium mines.

Construction of the water-treatment plant adjacent to Areva’s is expected to start in 2014, Nehemiah Abraham, under-secretary for water and forestry in the ministry of agriculture, water and forestry, said in a phone interview.

An evaluation of three shortlisted companies is being concluded, and a contract to build the plant in the Erongo region about 380 kilometers (235 miles) from the capital Windhoek with the capacity to produce 60 million cubic meters of water will be awarded before year-end, Abraham said.

Construction will start in 2014 and once in production, the plant along Namibia’s coastal region will take over supplying water to uranium mines in the Erongo area from Areva’s plant, which signed a deal with Namibia Water Corp. on Aug. 15 to distribute water to three uranium mines.

Areva agreed to supply 10 million cubic meters of water a year to Paladin Energy Ltd.’s Langer Heinrich uranium mine, China Guangdong Nuclear Power Co.’s Husab uranium project and Rio Tinto Plc’s Rossing mine.

Areva’s existing desalination plant was built to supply water to Trekkopje uranium mine, which the world’s biggest producer of nuclear reactors mothballed last year after prices of the fuel slumped. The southwest African nation is enduring its worst drought in three decades.

Water Shortages

Namibia’s semi-arid Erongo region suffers from severe water shortages. The water-supply agreement between Areva and Namwater is a “stop-gap measure as private companies are not allowed to sell water” in the country, Abraham said on Aug. 21.

“Areva will make the water available until our plant is in place,” he said. “Water is not privatized in Namibia.”

The desalination plant will be a public-private sector partnership with Namibia financing 30 percent of the capital required through state-owned Namibia Water. Namibia has an option to raise its shareholding over 15 years, Abraham said.

“A contract to the winning bidder will be awarded before the end of the year and the government wants plant construction to start next year,” Abraham said. “First water from the plant should start running by around 2016.”

To contact the reporter on this story: Felix Njini in Windhoek at fnjini@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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