Zambia approves uranium project, decision in Jan
Lumwana Mining Company said it has received the permission to proceed with its $200 million Zambia uranium project.
Lumwana Mining Company (LMC) said on Tuesday it has received the permission to proceed with its $200 million Zambia uranium project, but the decision to begin construction of processing facilities will be taken in January.
Managing Director Harry Michael said the environmental impact assessment report had been endorsed by the authorities, paving the way for the construction of processing facilities and also allowing the firm to seek separate licences for mining, storage and transportation of uranium.
Michael said the board of Lumwana's owner, Australia's Equinox Minerals, would take a decision in January on whether to proceed with the project on the back of a difficult global economic climate.
"We have received approval from the environmental council of Zambia (ECZ), but we are still evaluating whether to proceed with the project. We should reach a decision in the first or second week of January," Michael told Reuters.
Lumwana would process 1.0 million tonnes of uranium to produce around 800 tonnes of yellow cake per year, he said.
"About $200 million is required for initial start up of the project and we do not have the money in the backyard of Lumwana. So we will evaluate the potential of the project, look at the liquidity in view of the financial crunch," Michael said.
Michael said mining of uranium and stockpiling which started a few months ago would continue even if the Equinox board decided to defer the project.
"We will not lose the opportunity even if we defer the project and the only thing we may do is to wait for the right conditions," he said.
The project would employ 300 people during the peak of production. The LCM has previously said a $6 million uranium feasibility study at the Lumwana mine showed the existence of high grade uranium.
Zambia is Africa's largest copper producer and foreign firms including Zambezi Resources Ltd, African Eagle Resources Plc and Lithic Metals and Energy Ltd, have also discovered huge uranium deposits in the mineral-rich southern African country.
In October, Zambia enacted a law for mining, storage and export of uranium which bars the diversion of the mineral for use in making nuclear weapons or devices.
The law, which covers the prospecting, mining and milling of uranium ores and other radioactive minerals ores, gives all powers to the mines minister to issue licences for mining and exports of uranium as a safeguard to ensure it is exported to the right consumers.
Reuters Last Mod: 30 Aralık 2008, 16:35