Gecko Namibia has diversified and thrived.
PE: Gecko was founded in 2008 with a view to developing a number of projects, with our flagship project being Vision Industrial Park (VIP). We have had a few setbacks, namely the onset of the global financial crisis shortly after our inception. In addition, the basis of VIP was to assist the expected uranium rush in Namibia by providing the leaching reagents required for uranium mining. The events in Fukushima and its subsequent effects on the nuclear power industry have lead to Gecko delaying and adapting its plans for VIP. We began concentrating on the burgeoning marine phosphate industry before the ministerial announcement of an 18-month moratorium on the environmental impact of marine phosphate mining. Despite these events I still regard VIP as Gecko’s flagship project, although the group has diversified its business significantly in order to absorb the numerous setbacks to the implementation schedule of VIP.
Considering the unexpected developments in the global economy and the nuclear power sector, what is the current focus for Gecko?
PE: Gecko’s primary focus at present is the Okanjande graphite project. We took on the project with comprehensive environmental impact assessment (EIA), engineering reports, feasibility studies and pilot plant results from Rio Tinto in the 1990s. We acquired the rights to the project in the form of a mining claim along with a pending court case; all of that has now been resolved, so as of late September 2013 Gecko is now the owner of all the rights to the graphite in that area. We now intend to develop that project at full pace beginning with updating the EIA which we hope to complete by early 2014. In the meantime we will be working on the engineering studies.
RB: Gecko would need to have the EIA complete and have a sizable amount of the engineering study finalised before we can begin construction, but we can feasibly look to be breaking ground on the project before the end of 2014. From that point we would add 18 to 24 months to see our first production, so potentially Q2 2016. The project has very good access to infrastructure, in terms of power, water and transport.
Where do you see the major demand coming from for graphite and how does this timeline position you to take advantage of that demand?
PE: The timeline puts Gecko in a favourable position considering other graphite projects under development around the world. The indications are that graphite is soon to become a very popular mineral and it is always ideal to begin developing deposits before demand rises for that particular mineral. I see two main streams of demand for graphite; one is the development of graphene, which although in its early development stages is showing significant potential in a vast array of applications. More traditionally is the application of graphite for lithium ion batteries, which have no viable alternative due graphite’s high conductivity and low heat and expansion properties. If the electric car industry really takes off then we would expect the demand for graphite to increase substantially. The Okanjande graphite project will produce very high quality graphite and the flake size is very positive for these applications, making it a world-class deposit.
How much does the diversified nature of the Gecko group help in safeguarding you against demand fluctuations in certain minerals, such as uranium?
PE: When facing unexpected demand fluctuations in certain mineral types a company like Gecko has two choices; it simply dies a natural death or we start looking at alternatives. We believe in Namibia as a country and we want to make this company work with Namibians in Namibia, we therefore are looking to diversify our business within Namibia. We are active, through sister companies, in Zimbabwe and Angola but we believe Namibia is still the best growth point when you look for stable investment opportunities in Africa.
Beyond the Okanjande graphite project what other Gecko businesses are most active within the mining sector?
PE: Gecko Drilling, which conducts exploration drilling in the Walvis Bay area, is proving to be extremely successful. Despite the set backs in the uranium industry, that sector still makes up our largest group of clients. Between RC and DC, Gecko currently maintains 17 drill rigs. The drilling industry in Namibia was much more competitive two years ago but, due to the decline of the world economy and the instability in the mining sector, we have seen a number of the foreign drilling companies pull out of this market. Subsequently we have grown our market share and are now the biggest drilling company in Namibia. Being focused on uranium, there are of course concerns about the impact the continuing negative slide of the uranium price might have on this business.
What is your view of the current uranium price and the long-term potentials for the mineral?
PE: It is our view that the uranium price has now reached the bottom. In the short-term we expect to see the price to stabilise slightly higher than it is today, perhaps in the $40/lb region and in the long-term we are confident that uranium will be back in the region of $60/lb to $75/lb. Once we see uranium back around $75/lb we expect to see the reactivation of the many juniors here in Namibia. We could see three new mines coming online at that point. There will continue to be a demand for base-load energy across the world and this will have to come from either nuclear power or development of shale gas deposits, which still have some question marks over it. Nothing beats the efficiency of cost versus output you get from uranium. Nuclear is also, if controlled well, a very clean form of fuel. We do not expect to see a uranium boom but demand should rise and only the most cost efficient mines will survive. We believe Namibia is conducive to creating long-term, stable and cost-efficient uranium mines.
The president has set out his Vision 2030 for Namibia. How big is the potential for economic growth in Namibia, how important is the mining industry for that growth and what is Gecko’s role within that?
PE: Looking wider I believe Africa as a whole is in line for growth. Not many regions offer the array of minerals in addition to barren agricultural land as Africa does. The question for me is, which part of Africa will lead such growth? Namibia has the potential to play a significant part in leading growth for the continent. Namibia offers a level of infrastructure and stability well above the majority of countries in the region. Namibia may not have the abundance of minerals seen in other countries across Africa but as a base from which to channel a business’s regional activities, Namibia is a very good proposition. In the uranium sector, the establishment of Husab mine will make Namibia the third largest uranium producer in the world and the recovery of the uranium price would see two or three additional mines putting Namibia behind just Kazakhstan, as the world’s second largest producer of uranium oxide. All these factors mean that Namibia has the potential to become a hub for the southern African region.
This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Official Mining in Africa Country Investment Guide, will be launched next February 2014, as the only official publication providing country-specific information at Africa’s top mining event, the 2014 Investing in Africa Mining Indaba™ held in Cape Town, South Africa.