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AngloGold in 40% Ux boost
Allan Seccombe
Posted: Tue, 13 Feb 2007

[miningmx.com] -- ANGLOGOLD Ashanti will spend R250m expanding capacity at its Vaal River South Uranium plant by up to 40% from its current production of 1.5m pounds a year, the company said on Tuesday.

The board will decide in October on the expansion project, which will take up to three years to bring into production, said Robbie Lazar, the head of AngloGold’s African underground operations.

The uranium extraction plant is undergoing refurbishment that will keep production at 1.5m pounds/year until 2008 or 2009 when the new expansion will be built to deal with material from the Kopanang mine.

Uranium-rich feed from Kopanang is being stockpiled until the expansion of the plant is completed, Lazare told Miningmx.

The steady state output of the plant is 1.5m pounds a year, but this fell in 2006 because a key part of the plant, the counter current ion exchange (CCIE), experienced intense corrosion in the fourth quarter because AngloGold decided to use internal, recycled water in the plant.

By June, the five damaged columns in the CCIE will be replaced and recoveries will improve, Lazare said, adding temporary measures to repair the columns meant the plant was achieving 60% recoveries.

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Uranium is extracted from ore mined at Moab and Great Noligwa and is treated as a by-product.

“In the short term, the resulting uranium shortfall will contribute to higher cash costs at Great Noligwa and Moab,” said Neville Nicolau, chief operating officer for Africa.

The Vaal South River Uranium plant is the only uranium producer in South Africa, but TSX and JSE listed Uranium One will be bringing its Dominion mine and uranium plant into production from the end of February. Uranium One forecasts Dominion will produce 500,000 pounds of U3O8 in 2007, which will be sold on the spot market.

It will build up to steady state production of four million pounds a year. Uranium One is investigating doubling output from Dominion.

AngloGold Ashanti and First Rand’s jointly owned Nufcor International Ltd facilitated offtake contracts for Uranium One.

These contracts, along with another agreed in November, bring the total offtake to 4.7m pounds from 2008 to end-2012, representing 28% of production.

Uranium prices have increased 260% over the past two years to $75 a pound.