Uranium Mining and Economic Prospects in Namibia
Hugo Folliss | 14 January 2025
Summary
Namibia is a large uranium producer making it an appealing country for foreign investment. Uranium offers a solution to the economic problems the country faces but poses risks to its traditional farming industry.
Uranium mining is seen as a solution to improve the economic situation in deprived areas of Namibia. However, it could lead to increased cancer rates and the contamination of groundwater vital to the farming industry
Without a mine current rates of crime and malnourishment would increase in the region of Omaheke. Building a mine would alleviate the economic issues in the region but would need to be managed to counter the potential negative effects on farming and public health.
Namibia is the third largest uranium producer in the world giving the country global prominence. There are 60 uranium reactors under construction globally with a 50-million-pound shortfall predicted over the next decade. Large uranium deposits have made Namibia an appealing country for foreign investment, including from Australia, China and Russia. Two of the most productive mines in Namibia are majority-owned by Chinese companies whilst Russian company Rosatom had acquired a license to build a mine near Leonardville in southeast Namibia. However, this was revoked in 2021.
The Leonardville mine highlights the risks of uranium mining. The deposit is situated in the Stampriet basin which holds a major aquifer providing groundwater to Botswana, Namibia, and South Africa. The company had suggested using in-situ mining, whereby a solution including sulphuric acid is injected into the aquifer possibly endangering the groundwater. This groundwater is vital for farming, an industry that has already struggled with persistent droughts, stagnant prices and increased costs caused by international conflicts. Additionally, water contaminated with radiation could increase the risk of cancer which is already on the rise in Namibia, especially in cities that have uranium mines.
Even accounting for the associated dangers with mining, pastoral communities and citizens in Leonardville are in favour of building the mine, citing economic benefits as the reason. Traditional farming is struggling to make up for economic short falls where a recent NAD 7.8 billion (USD 431 million) trade deficit was caused by declining food exports. Coupled with the minority white farmers controlling 70% of agricultural land job opportunities in the traditional economy are limited. Subsequently Pijoo Ngante, the Omaheke governor, suggested that the mine would help address the lack of jobs. Omaheke has borne the brunt of the struggling farming industry with a poverty rate of 51% and the malnutrition rate rising to 4.9%.
In addition to mining, a universal basic income (UBI) of NAD 500 a month (USD 27.54) has been suggested as a solution. A recent experiment in the village of Otjivero saw the poverty rate drop from 76% to 37% with only a NAD 100 (USD 5.51) UBI highlighting its prospective impact. The study highlighted how local economies could be boosted with increased demand for services and goods boosting entrepreneurial activity. However, the pilot programme was conducted using private donations and a nationwide UBI would require significant government funding.
Uranium mining is a viable solution when global demand for uranium is increasing as it could have positive benefits for Namibia’s economy. However, it will likely increase harm to the environment if managed incorrectly. Another concern is the foreign ownership of the uranium mine. The Rössing uranium mine, owned by a Chinese company, fired an entire mineworker’s union after they protested the removal of basic health and safety standards. If something similar were to occur in the Russian-built mine, it would undermine any progress to alleviate poverty in the region. As such, finding a balance between protecting local Namibians and the environment in the context of uranium mining could have strategic benefits for Namibia’s economy.
IAEA Imagebank/CC BY-SA 2.0
Forecast
Short-term
The reliance on farming in both the region of Omaheke and Namibia has contributed to current economic struggles. It is highly likely that, without proper economic diversification, poverty and malnutrition rates will continue to rise. This could, in turn, likely lead to higher crime rates.
With the success of the pilot programme, it is likely that UBI will be instituted throughout Namibia to address poverty. This would require funding to be available to the Namibian government by reducing Namibia’s trade deficit.
Long-term
It is likely that the mine will be built with specific environmental controls in place to improve Namibia’s trade deficit and to fund a UBI programme.
Inadequate management of in-situ mining would likely undermine the economies of Namibia and neighbouring countries through environmental contamination.
It is highly likely that with poor oversight cancer rates would rise negatively impacting the economy.