Rio Tinto, Paladin Namibia Uranium Mines Face Water Shortage

Uranium mines operated by companies including Rio Tinto Plc (RIO) and Paladin Energy Ltd. in Namibia face a water shortage as a drought in the southwest African nation curbs supply to the operations and three coastal towns.

Volumes from the Omaruru Delta aquifer, about 200 kilometers (124 miles) northwest of the capital, Windhoek, have declined to 4 million cubic meters this year from 9 million cubic meters a year earlier, said Nehemia Abraham, under-secretary for water and forestry in the Ministry of Agriculture.

The source is in the semi-arid Erongo region, which supplies the towns of Swakopmund, Walvis Bay and Henties Bay and suffers from severe shortages. Water from a desalination plant owned by Areva SA (AREVA), the country’s first such facility, isn’t enough to meet the needs of Paladin (PDN)’s Langer Heinrich uranium mine, China Guangdong Nuclear Power Co.’s Husab uranium project and Rio’s Rossing complex.

“The water-supply situation at the coastal area has become too critical,” Abraham said by phone yesterday. “Mining companies in the area will have to operate with less water. We are reviewing the situation now and from end of November we might be unable to get enough water from the aquifer to supply to mines.”

Langer Heinrich spokeswoman Ratonda Murangi didn’t immediately respond to e-mailed questions. Botha Ellis, a spokesman for Rossing, directed queries to Namibia Water Corp., the country’s state-owned utility known as Namwater.

Water Needs

Rossing’s total water requirement for 2012 was 7.48 million cubic meters, 41 percent of which was for fresh water, while the rest was recycled, according to its website.

The three towns use about 4.5 million cubic meters and there is currently no spare capacity from the aquifer, known as Omdel, Abraham said.

Areva, the world’s biggest nuclear-reactor builder, in August signed an agreement with Namwater for it to supply 10 million cubic meters to the three uranium mines from its desalination facility. The plant was built to supply the Trekkopje complex, which was mothballed last year after the fuel’s price fell.

The government of the southwest African nation, which is enduring its worst drought in three decades, in August said it would name a private investor to build the country’s second desalination plant, which will cost 1.5 billion Namibian dollars ($148 million).

The state is evaluating three bids for the project, which will have capacity of 20 million cubic meters annually, Abraham said.

“We want this plant to be in operation yesterday because of the serious water crisis the Erongo region is facing,” Abraham said. “We can’t take chances; all the financial, technical capacity and social issues pertaining to this project have to be properly looked into,” he said. Construction will start next year.

Rio Tinto declined 1 percent to 3,232 pence by 8:12 a.m. in London, extending the drop this year to 8 percent. Paladin fell 3.7 percent to A$0.39 in Sydney.

To contact the reporter on this story: Felix Njini in Windhoek via Cape Town at dgriffiths1@bloomberg.net

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

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