Billions flow for Valencia uranium project
Written by Chamwe Kaira
Toronto Stock Exchange-quoted Forsys Metals Corporation moved a step further towards realising the uranium producing potential of its Valencia project this week when it signed a memorandum of understanding (MoU) with a South Korean power company.The company’s CEO, Duene Parnham, told the Economist on the sidelines of an international investment conference that took place in Windhoek that the MoU will see the Korean Electric Power Corporation (Kepco) availing over N$2 billion to move the project into a producing mine.
Almost an hour before mid-night on Wednesday this week, a multi-billion deal was struck between Korea Electric Power Corporation (Kepco) and Forsys Metal Corp, the owners of Valencia uranium project. The two met at the Namibia Investor Conference, which was held in Windhoek this week. From left is Duane Parnham, chief executive of Forsys Metal Corp, and Jin Sik Kim, vice president for Korea Electric Power Corporation. The Minister of Trade and Industry, Immanuel Ngatjizeko, witnessed the signing.
The MoU was signed by Parnham and Kepco’s senior vice president, Jim Sik Kim.
The Korean company runs 17 gas and energy companies.
Parnham said the agreement is one of the financing options Forsys is looking at, as it moves forward with developing the project.
“We are looking at a number of financing options and this agreement with the Korea Electric Power Corporation is one of them,” said Parnham.
He said Valencia Uranium Pty Limited, the local subsidiary of Forsys, has N$870 million in its coffers for the development of the project, adding that a ground breaking ceremony will be held at the end of this year, with production expected to commence at the end of 2009.
Parnham said Valencia Uranium has already lodged an application for a mining licence with the mines and energy ministry.
“We expect to make the first delivery in 2010,” he said.
The mine is expected to produce 2.9 million pounds of uranium oxide per annum, Parnham said. The mine has an 11-year lifespan.
The Valencia project is situated 35 kilometres from the Rössing Uranium Mine and 40 kilometres from Paladin's Langer Heinrich uranium mine.
Kepco is slowly relinquishing its status as South Korea's electric utility monopoly, but the company remains the country's sole power distributor, serving 11 million households and generating 90% of South Korea's power needs.
It has a power generation capacity of almost 56000 mW primarily from thermal and nuclear plants.
Kepco also purchases 4000 mW from independent power producers and it is building power plants in other Asian countries.
The company has privatised its telecommunications unit, Powercomm, and it plans to divest more than half of its generation assets.
The Korean government owns 54% in Kepco.
www.economist.com.na/content/view/2142/33/
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