AUSTRALIAN uranium miner Paladin Energy withdrew its production forecast for 2025 following heavy rainfall at its Langer Heinrich mine in Namibia, described by the company on Wednesday as a “one-in-fifty-year rainfall event”.
Rainfall soaked ore stockpiles and interrupted access to the mine’s processing facilities. Access to the mine was also interrupted owing to road infrastructure damage. Paladin said its processing facilities “appeared” to be undamaged by the weather.
However, mobilisation of key mining equipment and personnel to site was affected and water ingress into the open mining pits would also delay access. This was despite “adequate” pumping infrastructure, although Paladin said the pits would eventually be de-watered.
Shares in Paladin fell nearly 12% on the Australian Securities Exchange.
“This was a massive amount of rain,” said Paul Hemburrow, COO of Paladin in a conference call on Wednesday. “The ground is absolutely saturated; the pit is completely full to the brim,” he said, adding that Langer Heinrich was unprepared for heavy rains as it is located “in the middle of the desert”.
Deliveries to customers would be unaffected in March (already dispatched) and April (already packed), but the company might have to invoke force majeure clauses in terms of its supply contracts, said Hemburrow.
Paladin processes uranium from surface ore stockpiled during the mine’s mothballing prior to its reopening by current management. Since the grade of this ore was relativley low, the company previously sought to accelerate mining from existing pits that had been reopened.
Today’s announcement represents another blow to the company’s efforts in accelerating output of uranium oxide. It cut production forecast last year following ramp-up difficulties which required a maintenance shut down.
Paladin said it expected the processing plant would “return to normal” operation as the in-circuit inventory and chemistry stabilises and stockpiled ore saturation levels decrease. But for this year, its previously forecast nameplate run-rate guidance of six million pounds was no longer possible.
Paladin said on March 21 that it had suspended production from Langer Heinrich following the heavy rainfall. “The full impact of the weather event and disruption to production will be assessed when conditions have stabilised,” it said at the time.
Commenting on recovery, Hemburrow said “the expectation is that it could take a few weeks before the plant is stabilised”. He added: “It would depend how the moisture content of the stockpiled ore goes”.
Paladin did not expect to incur significant capital costs as a result of the rain event which had also affected a number of other miners in the region.
Shares in the company are 60% lower over the last 12 months.
