Langer Heinrich has allayed fears that placing its mother company, Paladin Energy, under administration would have a damaging effect on the Erongo-based uranium miner.
Paladin went into voluntary administration after it failed to settle a debt worth US$277 million with Electricite de France SA (EDF), which is due on 10 July.
Paladin owns 75 percent of Langer Heinrich while China National Nuclear Corporation owns a 25 percent stake.
This week, Paladin announced that it had appointed Matthew Woods, Hayden White and Gayle Dickerson of KPMG Australia to administer the company and its related companies, including Langer Heinrich ‑ its cash cow.
Langer Heinrich MD, Michael Introna, told the Windhoek Observer this week that the mine is a separate legal entity, and that it was ‘business as usual’ at the uranium producer.
Paladin signed the long-term agreement with EDF in 2012.
The two parties, Paladin and EDF, had been in discussions, with the former seeking renegotiated terms before an independent expert ruled on 9 June that the additional security Paladin proposed was insufficient.
Langer Heinrich Mine is Paladin’s flagship project. Having reached its initial production of 2,7 million pounds of uranium oxide per annum in 2008, the mine completed its Stage 2 ramp-up to 3,7 million pounds in 2010. Subsequently, the company has completed Stage 3 expansion, bringing up production to 5,2 million pounds per annum.
The Windhoek Observer has learnt from sources in the local financial market that Langer Heinrich may seek a loan to sustain itself while the process of administration is taking place.
Introna said the administration process may take up to one year.
“If it gets messy, it may take up to two years,” he said.
The Langer Heinrich executive added that there is likelihood that the Erongo region based mine will be sold to its minority shareholder, China National Nuclear Corporation.
Early this year, the Chinese firm tried to take over Paladin when it restructured its corporate bonds.
“I have informed the workers about what is going on. I have also briefed the Minister of Mines and Energy,” Introna said.
The company employs about 300 full-time workers. Paladin CEO, Alexander Molyneux, said this week the administrators will immediately undertake a financial and operational assessment of relevant companies and would continue to operate the company on a ‘business as usual basis until further notice’.
According to the 2016 Chamber of Mines of Namibia Annual Report, Langer Heinrich had a turnover of just over N$2 billion in the financial year ended 30 June 2016.
Last year, the company paid N$224 million in wages and salaries, while fixed investment amounted to N$89 million.
The company made a loss of N$2,1 billion in 2016, which means it was exempted from paying tax. It, however, paid royalties worth N$83 million.