Karoo towns set to make a bomb


The Headline of this article speaks for itself, but the content is misleading. Instead of referring to uranium and nuclear power as the answer to global warming, the reporter would do well to research the link between uranium mining and cancer, as well as the negative impact of atomic energy, in terms of war capacity and increase in overall radiation exposure. DRL

Karoo towns set to make a bomb

May 28 2006 at 04:56PM

By Nicky Blatch

The Karoo is believed to hold millions of tons of uranium worth hundreds of billions of rand which could be exploited as the world turns increasingly to nuclear power because of global warming.

Thirty years ago, the discovery of uranium in the heart of the Karoo sent prospectors flocking to towns near the border of the Eastern and Western Cape, from Aberdeen to Beaufort West, and further north and west.

But a drop in the price of uranium in the 1980s left the mineral untouched for decades, until now.

An increasing demand for energy on a global scale has led to steadily rising prices, bringing prospectors back – some of whom have paid out millions to farmers for mineral rights to their properties.

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Countries are converting from generating electricity with fossil fuels such as coal which cause global warming, to building nuclear power stations which do not emit greenhouse gases.

The Karoo prospectors are now waiting for their prospecting rights to be issued by the government, before the explorations can begin in earnest and the exact extent and worth of the uranium can be determined.

But researchers estimate there are several million tons of uranium in the area. At the current price of about R620 a kilogram, one ton of uranium would fetch almost R620 000, and a million tons a whopping R620-billion, meaning that both the prospectors and the townspeople could be sitting on a colossal fortune.

Beaufort West property developer Derick Welgemoed, a former municipal manager, is already planning ahead for the predicted boom that uranium will bring to the town by building Beaufort West’s first townhouse complex, and there are plenty of other developments in the pipeline.

“Uranium is going to turn the economy of the town upside down,” said Welgemoed, who was administrative head of the town until this year’s local elections.

The Ngondo family, from Beaufort West’s Mandlenkosi township, last year landed a R20m windfall when they sold the mineral rights on the farm Katdoringkuil to London-based mining company Uranco Incorporated.

The family bought the stony, semi-desert 6 000ha farm near the town in 2001 with a state subsidy and a loan of half a million rands.

They were paid R14-million up front, and will receive three subsequent payments of R2-million each, plus a four percent annual royalty once mining starts.

They sold their mineral rights just in time, for in May 2004, the new Minerals and Petroleum Resources Development Act transferred all unused “old order” mineral rights from landowners to the state, in line with international mineral rights precedents.

But the staggered implementation of the new legislation allowed the Ngondo family a year’s grace within which to apply to the state to sell their mineral rights.

In terms of the Act, all mineral rights belong to the state and owners have to apply for mining rights or licences. The final phase comes into effect in 2009.

Exploration by mining companies in the late 1970s and early 1980s stopped when the price of uranium fell from around R570/kg to about R100/kg, meaning uranium mining was no longer economically viable. The price is now about R620/kg and rising.

Minerals and energy departmental spokesperson Malebo Mahape said prospecting rights had so far only been issued to one company, Midnight Masquerade, for a small portion of the farm Rystkuil. The other applications were still being processed.

Garth Abrahamse, spokes-man for Midnight Masquerade, which has since changed its name to Beaufort West Minerals, said the company would not start prospecting until its other submitted applications had been approved.

Abrahamse said: “Studies have shown this is a well-known area for uranium. But we will only be able to tell where it is, and how much there is, once we start prospecting.”

Neal Froneman, chief executive of SXR Uranium One, which has also applied for prospecting rights in the area, said it was “too early to give an authoritative estimate” of the worth of the uranium in the area.

Johan Loock, honorary researcher in the University of the Free State’s geology department, has been involved with uranium studies in the area for about 14 years.

He said trial mines were set up in the 1970s at the farms Rystkuil and Rietkuil, near Beaufort West.

“They mined a couple of thousand tons and sent them overseas to be processed, to see if uranium could be extracted.

“But in the early 1980s the uranium price dropped and all the companies pulled out, and nothing further happened.”

That is, until the 1990s, when the Atomic Energy Corporation (now the Nuclear Energy Corporation of SA), contracted universities including Free State University to conduct collaborative research.

“The AEC forecast that the price of uranium would increase by the end of the century, because the US had stopped mining it in the 1980s and 90s, and the world would start running out of uranium.
Right now, China, Korea, Japan and Taiwan are desperate for energy. They are already building 30 nuclear power stations and planning 20 more. Since 2004,” Loock said “there’s been a renewed interest in the Beaufort West area, many companies are busy there.

But, he said, everything was now “on hold” as companies awaited their prospecting permits.

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