Yellow cake is a treat in area that is starved of jobs

Project will employ thousands, and Chinese owner is keen to respect Namibia's ways

Chinese companies in Africa hoping to ride on the coat tails of their country's reputation for reliability and hard work need to take a good look at how they are operating in the continent, the head of a mining company in Namibia says.

Zheng Keping, chief executive officer of Swakop Uranium, which is constructing a world-class uranium mine called Husab, says that the key to success for such companies is doing more than just adapting to local conditions by fully adopting the spirit of the communities in which they are located.

Bureaucratic inertia and red tape are holding back many Chinese companies in Africa from the rich rewards they could reap in the continent, so Swakop Uranium is bringing in senior staff to ensure that it is not thwarted in the same way, he says.

Swakop Uranium Mine's parent company is the state-owned China General Nuclear Power Group, or CGN, whose three main activities are generating nuclear power, producing nuclear fuel and generating recyclable energy.

In 2012 CGN and the China-Africa Development Fund bought Husab Uranium Mine in western Namibia and brought the Namibian Epangelo Mining Company into the project.

"Internationalization and diversification of our board and management is key to our direction and success," Zheng says.

Of 10 board members, four are from China General Nuclear Power Group, two are from the China-Africa Development Fund, and the rest are from Australia, Britain and Namibia, he says.

That make-up has ensured a smooth transfer of the mine, and local interests have been given a strong voice in the decision-making.

"Apart from the Board of Directors, our senior management, too, are highly localized and international," Zheng says. "Our operations, human resources and logistics executives are Namibians, the senior construction executive is from China, the business and corporate development head is from the UK and the executive running the regulation and risk control department is from France."

The path the company is following is fraught with difficulties, but there is no other choice if it wants to grow successfully overseas, he says, managed by competent people who ensure that what they do is appropriate to the local conditions and complies with both local and international rules.

The mine is in desert in the Erongo region of western Namibia, about 60 kilometers from the coastal city of Swakopmund. It is estimated to hold about 300 metric tons of uranium oxide, also known as yellow cake. It is said to be the world's second-largest uranium mine once in full production.

The total investment is more than $4.5 billion, and once the project is completed some time next year, the mine is expected to produce 6,500 tons of U3O8 a year, which would increase the value of the country's exports by about 20 percent and of its GDP by 5 percent. The mine is expected to have a working life of 20 years.

Husab project is forecast to create more than 6,000 temporary jobs and 1,600 permanent jobs during operation, an important economic fillip for the region at a time when other mining companies there have reduced production.

Hifikepunye Pohamba, who completed a 10-year term as the country's president in March, said the participation of Epangelo Mining Company in the project reflected the majority investor's commitment to creating a productive partnership with a local company.

"This is indeed laudable, and I commend the investors for implementing this significant investment in our country," Pohamba said when he was still in office. "This is a significant boost to our government's efforts to promote the creation of more employment opportunities for our people and to strengthen our national economy. The operations of the mine will also boost local companies through the provision of support services to the mine."

The regional governor, Cleophas Mutjavikua, says that if there were no such investment in the area, unemployment would be serious.

"There are two big mines that have introduced severe cost-cutting measures, and if it were not for the intervention of Swakop Uranium we would have had a serious crisis on our hands."

The company started evaluating the project in 2009 and eventually signed the deal three years ago. Construction of the project began in 2013, and mining operation began in 2014.

Zheng says the speed at which work has been carried out, the result of the company's adept handling of its relationships with its partners, has been remarkable.

"Uranium exploration in Namibia is a developed industry, and Western companies have had several decades' experience, so in teaming up with them we are making the most of that," Zheng says.

"Because we are responsible for all key parts of the project, experienced vendors have been selected to work with us to raise the project's quality and efficiency."

Bringing in a Namibian partner was regarded as critical to guaranteeing the company's long-term, sustainable growth, Zheng says, referring to Epangelo.

"We regard ourselves as a local company, so we value and respect our staff and relationship with the local community. We think the best way to understand their needs is to ask those who work with them who have the same cultural background. So Epangelo's joining has been important and is the basis of our sustainable development here."

Even as the company prepares to begin production next year it regards corporate social responsibility as vital, Zheng says.

A two-kilometer road that has been laid down is used for transporting of construction materials, equipment and supplies as the mine infrastructure is built and will be open for general use by company staff and the public once the mine is operating.

The company says it has invested more than $NAD5 million ($423,000) to become socially responsible and to promote education, recruitment, training and environmental management, Zheng says.

"To support all this we have set up the Swakop Uranium Foundation, which demonstrates our commitment to the Erongo region and to Namibia."

The company says local talent is critical in sustaining the mining operation, so it has made significant investments in staff training to build a competent workforce and leadership at all levels.

As part of the education drive, a bursary scheme has been set up to help impoverished and ambitious students complete schools and select excellent students to pursue further education overseas, which aims to overcome the dearth of skills in the field of uranium mining industry in Namibia.

"Graduates will get the chance to develop their skills and gain experience with Swakop Uranium through a structured graduate training program, providing a basis to develop future leaders," Zheng says.

lilianxing@chinadaily.com.cn

(China Daily Africa Weekly 05/22/2015 page8)