India is seeking participation in uranium exploration in Namibia in its global search for fuel to enhance nuclear power generation.
Namibia is an African country endowed with rich mineral deposits. Diamonds and uranium production constitute key activities in the mining sector. While the diamond industry is on a downward slope, uranium extraction, on the contrary, is on an upward slope. The mining industry creates approximately 10 percent of GDP and is responsible for over 40 percent of total export revenues (Conde and Kallis, 2012). After 2010, Namibia ranks as the 4-5th global uranium producer with perspectives to become the leader in the near future (OECD, 2012). Apart from being a heavy metal, uranium is radioactive and usable to produce nuclear weapons (Hecht 2012). Throughout history, especially between the 1940s and the 1980s, uranium application in nuclear weapons manufacturing has been an important source of demand. It can also be used for the desalination of water. Another use of uranium is in maritime propulsion, mostly of submarines. Finally, radioisotopes made from uranium are widely applied in medicine, agriculture and industry.
A number of uranium projects were under development in Namibia. However, rising prices of the resource attracted an influx of foreign exploration companies, the 'Uranium Rush' phenomenon. Hence, in 2007, the government felt that it was difficult to control this situation effectively. Therefore, it issued a moratorium on new prospecting licenses for foreign companies.
Global Forces and Uranium Mining Development
Global trade in uranium is due to rapidly changing perceptions of predicted demand and supply, which uranium prices reflect. A random event like the Fukushima disaster can highly influence political decisions concerning nuclear power worldwide and pose a serious impediment to the progress of new uranium mining projects. In May 2013, the spot market uranium price was at the lowest level since 2006, amounting to $105/kgU (Cameco, 2013a, b). Massive investments in nuclear power by China, India, Russia and other smaller countries might eventually elevate the uranium price, but currently, the nuclear stand-by of Japan along with the political trends of moving away from nuclear power in Germany and France still seems to have a strong effect on uranium trade. In such a situation, the cost of resource production might be decisive in the developments of new uranium mines. Therefore, systems and stakeholder analyses demonstrate high dependency on external factors for Namibia’s uranium mining developments.
Uranium Mining Regulatory System in Namibia
Mining operations usually take place on a territory belonging to a certain country. Therefore, they function within a framework of laws and regulations of that country. The regulatory system defines the procedures, which are mandatory for a mining company. The goal is to protect the country's environment and society from the negative impacts of mining. In the case of uranium production, two additional factors result in a need for further regulations. Radioactive properties of uranium need to be addressed, because of related health hazards and its potential for use in the development of nuclear weapons calls for more stringent systems of control of international trade in uranium.
On January 25, 2017, Namibia announced the lifting of a 10-year moratorium on new applications for exploration licenses on nuclear fuel minerals; 14 companies applied for 18 exploration licenses during the rest of January 2017 alone. Namibia, despite being one of the largest producers of uranium and having a treaty with India for peaceful use of nuclear use, does not supply the fuel to India because of Palindaba treaty among African Union countries which bars exports of the element to non-NPT signatories (PTI, 2016). Both China and India are interested in acquiring uranium from Namibia. Chinese companies have taken major equity positions. India is discussing how to open the way to be able to buy Namibian uranium, at present ruled out by Namibia’s non-proliferation commitments. That is, Namibia is party to the Nuclear Non-Proliferation Treaty, with comprehensive safeguards, in force since 1998; in 2000, it signed the Additional Protocol. Namibia has also ratified the 1996 African Nuclear Weapon Free Zone Treaty, which came into force in 2009 and precludes export of uranium to India.
India is seeking participation in uranium exploration in Namibia in its global search for fuel to enhance nuclear power generation. In early 2008, India asked Namibia to supply uranium from its vast reserves. Namibia invited India to mine uranium from here and reiterated its commitment to honour the deal for the supply of the mineral inked in 2009. The deal, however, could not move forward, as Namibia has to take concurrence of the African Union and get the deal ratified from its parliament. However, Namibia assured India that it did study the framework New Delhi has signed with 12 other countries including UK, US, Australia, Sri Lanka, France and South Korea besides others. Counterpart officials accompanying the Indian President on a three-day visit informed Namibia about its efforts to gain membership of the Nuclear Suppliers Group. They also explained that India, even though is not a member of Nuclear Non-Proliferation Treaty (NPT), it has inked the deal for procuring uranium from these countries, as there was no hindrance in buying uranium. Further, there was also there were also plans for a high-level expert team from India to visit Namibia to explore possibilities of mining Uranium in the country. There have, however, been efforts undertaken by the National Aluminium Company Ltd. (Nalco) to renew its efforts in the African country by scouting for uranium assets as early as 2010, and trying to get an allotment of some leases for uranium in Namibia, (ET, 2010) with a possibility of a joint venture for exploration.
However, the situation seems to be a stalemate. Moreover, prospecting and exploration are terms used to describe the process of looking for minerals; yet to be legally able to conduct these activities, a company has to obtain a prospecting or exploration license tied to a specific area and issued by a government body. Prospecting is usually associated with the first phases and then conducting a geophysical survey from air or surface is also important. After the features of the mineral deposit are recognised, a feasibility study taking into consideration costs connected to the complete life cycle of the planned mine, including closure and rehabilitation of the whole project is necessary. Nevertheless, this depends on a regulatory context and might not always be easy, especially in a joint venture with international partners.
The Way Forward
After analysing the legal and policy framework, the opinions of national stakeholders and international best practices, the challenges facing India and Namibia’s furtherance of Uranium deals are addressable through a series of concerted and proactive steps. In brief, these include:
• Modification of Existing and Proposed Legislation of The Minerals (Prospecting and Mining) Act of 1992 and The Proposed Parks and Wildlife Management Bill
• Increased Enforcement and Proper Implementation of Current Laws
• Development and Practice of Improved Policy
• Speeding up the processes to take off from the talks and negotiations to hitting the ground.
• Carving out policies and frameworks suitable for establishing joint ventures and technology transfer of know-how for efficient mining.
• Adopting a holistic stakeholder approach (Freeman, 2010) to chalk out international bilateral trade agreements or treaties with African countries in general and, more specifically, with Namibia.
However, over the past few years, India-Namibia bilateral relations are witnessing a steady qualitative and quantitative enhancement, and are poised for major intensification in the years to come. Even the pace of bilateral exchanges between the two countries has significantly increased with visits of high-level dignitaries and national leaders in the past few years, yet a lot of work is required at ground level to bring these efforts to fruition and, no doubt, there are going to be much-anticipated paraphernalia of these current developments, which one needs to watch.
• Cameco Corp, (2013a). Spot Price History. Available at:http://www.cameco.com/investors/markets/uranium_price/spot_price_complete_history/ [Accessed 15 March 2018]
• Cameco Corp, (2013b). Uranium 101. Markets. Available at: http://www.cameco.com/uranium_101/markets/[Accessed 15 March 2018]
• Conde. M., &Kallis. G., (2012). The global uranium rush and its Africa frontier. Effects, reactions and social movements in Namibia, Global Environmental Change, 22, 596-610.
• ET, (2010). The Economic Times Sep 6, 2010.
• Freeman R.E., (2010). Strategic Management: A Stakeholder Approach. Cambridge University Press.
• Hecht G., (2012). Being Nuclear: Africans and the Global Uranium Trade. MIT Press.
• OECD (2012). Organisation for Economic Co-operation and Development, International Atomic Energy Agency, Uranium 2011: Resources, Production and Demand. OECD Publishing.
• PTI, (2016). Press Trust of India, June 16, 2016
• World Nuclear Association (2012). What is Uranium? How does it work? Available at: http://www.worldnuclear.org/info/Nuclear-Fuel-Cycle/Introduction/What-is-Uranium--How-Does-it-Work- [Accessed 15 March 2018].