JOHANNESBURG (Reuters) - Rio Tinto’s Rossing uranium mine in Namibia is on track to produce 4,000 tonnes of the metal this year and plans to maintain that output on average until 2023, an official said late on Wednesday.
General Manager for Corporate Services Zebra Kasete said the company had updated the forecast on output and the mine’s lifespan after further drilling on the open pit mine in the Namib desert in Namibia.
“We have a better understanding of the ore body ... on average, 4,000 tonnes per year is what we expect to maintain,” Kasete told Reuters in an interview.
He said Rossing was conducting further exploration to see if it could go beyond. In 2008, the mine produced 4,108 tonnes, its highest level in the past 20 years.
Forty-one percent of the uranium produced at the mine is exported to North America, 10 percent is absorbed by Europe, and the rest nearly evenly split between Japan and the rest of Asia.
Demand for uranium is growing as more nuclear power plants are being built by countries scrambling to cut emissions and reduce fossil-fuel dependence, also giving support to the price for the metal going forward, Kasete said.
“Countries are looking to diversify their energy mix ... companies are taking longer to bring new mines into operation -- we will see prices picking up in the coming year,” he said.
Spot uranium on Thursday stood at $46 per pound, down from a record around $136 in June 2007.
Rossing continues to explore the option of using a heap leaching facility at a satellite deposit to boost output.
A study on the project will be completed in the first quarter of next year, Kasete said. Rossing had initially planned for the project to yield 1,000 tonnes of additional annual output, with first production seen in early 2011.
“We are still targeting that number ... but we will only be able to confirm that with the feasibility study,” he said.
Rossing, which supplies nearly 8 percent of the world’s uranium, has completed a study for building its own sulphuric acid plant to end its dependency on imports, but has put the project on hold for now due to market conditions.
“With acid prices dropping significantly lower and given the constraints in the financial markets ... we’ve shelved this to be taken up at an appropriate time,” he said.
The plant was expected to produce 1,200 tonnes of sulphuric acid per day, a major cost item in the uranium recovery process.
Kasete said costs had risen on the back of a higher exchange rate, but the company had no intention to cut jobs, and hoped to mitigate most impact via cost cutting and efficiency measures.
“We don’t know how the exchange rate is going to behave ... but we should start seeing the results (of the steps taken), although it will be tough,” he said.
Rio Tinto owns a 68.6 percent stake in Rossing, one of two uranium mines within the group.