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Friday, 20 July 2007

Now Gwabe has uranium....

Forbes and Resource Investor report that now Gwabe has significant deposits of uranium, in what is becoming an endless tale of discoveries in Zambia:

Albidon Limited said it has intersected significant uranium mineralisation through drilling at the Gwabe prospect in Zambia. The company said results from an initial 25-hole reconnaissance programme confirm the presence of uranium mineralisation that may be amenable to open-pit mining.

9 comments:

  1. Hello cho,
    Join us in the african loft. We have a competition going on. Trying to garner enough support....

    pammy

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  2. At the risk of sounding a bit Sakist, perhaps Zambia should consider emulating Uganda on uranium policy and institute a moratorium on deals until a unified national strategy and oversight plan can be implemented.

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  3. Yakima,

    there's a double irony in that link!! " Besides the resolution on uranium, the NRM retreat also agreed on a law to empower the Government to fund political parties and organisations."

    On a serious note...I think there's a case for looking at this uranium issue seriously. Error27 made an interesting point in a different context in which he sited that the extraction costs for uranium had previously prevented the nation from exploiting it. Now that the prices are high - it has become profitable.

    In fact in this Gwabe context the extraction costs are most likely be very low - it appears the uranium is close to the surface hence the open pit method. I think. Also the significant size of the deposits makes it much more worthwhile to pursue.

    The Ugandan approach is possibly too negative. Government am sure will get a grip on it...with the Chinese leaning on the shoulders :) I mean all they are doing is exploring it....mining it requires a new licence I think....and a new contract with Government...Is my understanding correct there?

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  4. Cho,

    I am not certain that any new license is required, Albidon makes no mention of any regulatory hurdles left to clear and speaks of, "the exploration and development of a number of uranium and coal prospects that have been identified on Albidon’s tenements in Zambia," as if it were a "done deal". I shudder to think of the possibility that Government negotiators may have already signed away the public's rights in the existing lease agreements.

    I concur that the Ugandan reaction is somewhat extreme, however the principle of establishing a clear public policy regime before negotiating terms for new agreements or revising old ones appears to be generically sound.

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  5. According to the Mines Ministry website there are three types of licence available to the large-scale operator like Albidon:

    Prospecting Licence: this confers the right to prospect for any mineral over any size of area for a period of two years renewable.

    Retention Licence: the right to retain an area, subject to the Minister's agreement, over which feasibility studies have been completed but market conditions are unfavourable to development of a deposit at that time. Size of the area may be that covered by a Prospecting Licence or smaller area as redefined by the Licence holder. Duration would be for three years renewable for another single period of three years.

    Large Scale Mining Licence: this confers exclusive rights to carry out mining operations and other acts reasonably incidental thereto in the area for a maximum of 25 years. The area to be held should not exceed the area reasonably required to carry out the proposed mining operations. Applications need to be accompanied by environmental protection plans and by proposals for the employment and training of citizens of Zambia.

    After reading the bit I have highlighted in italics, I think it is fair to say Albidon could have not been granted the “Large Scale Mining Licence”. Most likely there are operating under the “Prospecting Licence”. That does raise some interesting questions, because if the company has not been granted any licence to operate, it does beg the question why they would declare the right amount of deposit before commencement. Couldn’t the Government just refuse them a license and then take over operations? I guess that is why they issue public pronouncement with every discovery . “Albidon has found X “, it reduces the chances of Government not granting a license down the line. So although they have no large scale mining license, Albidon are fairly confident tha only the environmental legislation can stand in their way. Incidentally that is where the room for Government might be – environment and “security” given the significant quantity of deposits.

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  6. I now forget the name of the company, but over 16, 17 years ago, it prospected for gold in the Lubungu area of the Kafue National Park, to the north-west of Mumbwa for a long time, one was left wondering if the exercise was profitable. The conclusion can only be that the company had a way of extracting the mineral for it to remain in the area for ages. It could be the same for the uranium. Anybody bold enough can get into Zambia, exploit the resources and get out. Does anyone remember the Placid Oil saga in Chama?

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  7. That does raise some interesting questions, because if the company has not been granted any licence to operate, it does beg the question why they would declare the right amount of deposit before commencement.

    Because they already knew? Which would mean that these deals were made in bad faith, and with bad intent. And without full disclosure.

    Can any of their licences be revoked? At least that would be good leverage when it comes to renegotiating the mining deals.

    Couldn’t the Government just refuse them a license and then take over operations? I guess that is why they issue public pronouncement with every discovery . “Albidon has found X “, it reduces the chances of Government not granting a license down the line. So although they have no large scale mining license, Albidon are fairly confident tha only the environmental legislation can stand in their way. Incidentally that is where the room for Government might be – environment and “security” given the significant quantity of deposits.

    And national health. And uranium is a security issue. It should really be mined by the state, and security provided by the army and security services.

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  8. Interesting developments in DR Congo
    - A joint venture is being proposed.

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