Socio-economic baseline and assessment study as input to the environmental impact assessment and management plan for Rössing Uranium’s proposed desalination plant near Swakopmund

Type Report
Title Socio-economic baseline and assessment study as input to the environmental impact assessment and management plan for Rössing Uranium’s proposed desalination plant near Swakopmund
Publication (Day/Month/Year) 2014
Publisher SLR Environmental Consulting (Namibia) in association with Aurecon Namibia
URL D1 - Socio-economic - Final​specialist report.pdf
This socio-economic study considers the socio-economic impact on the receiving environment of the
proposed Rössing Uranium Limited (RUL) desalination plant. The plant aims to meet the Rössing mine’s
water supply needs estimated to be 3 million cubic metres of water per annum (3Mm3
/a). The baseline and
assessment was undertaken by Ms Auriol Ashby, a Namibian-based socio-economist.
The proposed desalination plant is sited approximately 6 km north of Swakopmund on the coast of the
Erongo Region where the biggest users of water are the Municipalities of Swakopmund, Arandis and
Henties Bay and the mines of RUL, Langer Heinrich Uranium (LHU) and the future Husab uranium mine
currently under construction. NamWater sells the municipalities relatively cheap groundwater from the
Omdel aquifer whilst the mines are sold very expensive water produced from Areva’s desalination plant.
In 2011, Swakopmund had a total population of 44,700, compared to Arandis which had 5,170 people and
Henties Bay which had 4,720. Approximately three quarters of households in both constituencies rely on
wages and salaries as their main source of income. Unemployment in the two constituencies is 26% and
28%, compared to the national average estimated between 29% and 37% (NSA 2014a and 2014b). The
region boasts the second highest living standards in the country, estimated at an annual N$22,700 per
capita consumption in 2009/10. The region’s growth, in both population and economy, has been largely
due to the mining sector, the harbour and fishing industry based in Walvis Bay, and the tourism sector.
The mining sector in this area is dominated by uranium mining and exploration which has suffered from
low global uranium prices and over supply since the Fukushima disaster of 2011. Mines with long term
contracts at higher prices have weathered the market despite the low spot price currently at US$35/lb.
The two operating mines of RUL and LHU jointly employ about 2,000 permanent employees and the
Husab mine will employ a further 1,600 employees once in full production in 2016. There are likely to be
at least a further 5,400 jobs created through the supply chain. The mines also contribute to the national,
regional and local economy as illustrated by RUL’s accounts for 2013, when RUL:
 Spent N$1.9 billion on goods and services
 Generated N$83 million in royalty payments
 Generated N$143 million in PAYE payments
 Made N$289 million of payments to state owned enterprises, and
 Paid N$783 million in employment costs.
The mining sector is dependent on desalinated water for its survival as sustainable yields from the Omdel
aquifer are insufficient. NamWater predicts that the demand for affordable water at the coast will outstrip
supply by 2016 when Husab becomes fully operational, unless Areva’s plant works close to full capacity.
The issue is not only about inadequate supply of water but also the cost at which it is being produced and
sold to NamWater by Areva. RUL is currently paying N$45 to N$50/m3
for desalinated water. However,
these contracts are on a take or pay basis and therefore during periods of low usage, the actual water
tariff can be much higher. Anticipated water production costs from the proposed project is substantially
lower and affordable for RUL. Preliminary indications are that it can produce water at below US$2.5/m3
), before conveyancing costs. By constructing its own desalination plant, RUL is anticipating a
saving in water costs of approximately N$30million to N$50million per year against the current water cost
and anticipates recovering the cost of construction within four years

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