NAMIBIA'S URANIUM: THE TRADE MINISTER'S VIEWS

C O N F I D E N T I A L WINDHOEK 000296 SENSITIVE SIPDIS STATE FOR ISN (NMENKHOFF),T, AND AF/S E.O. 12958: DECL: 08/18/2019 TAGS: KNNP MNUC PARM ENRG EMIN ETTC PREL IR WA SUBJECT: NAMIBIA'S URANIUM: THE TRADE MINISTER'S VIEWS REF: A. WINDHOEK 202 ¶B. WINDHOEK 200 ¶C. WINDHOEK 198 ¶D. WINDHOEK 159 Classified By: AMBASSADOR DENNISE MATHIEU for 1.4 (b) and (d). -------------- Summary -------------- ¶1. (C) Namibia's Minister of Trade and Industry Hage Geingob recently shared his views on his country's rapidly growing uranium mining industry with Ambassador Mathieu. The Ambassador emphasized the need for the Namibian Government (GRN) to be watchful of Iran that might attempt to employ various tactics - including the use of front companies - to obtain nuclear material. Geingob stressed that Russian and Chinese firms have entered the sector, but that the GRN remains vigilant of any efforts by rogue states to acquire Namibian uranium. While the government may be alert to the dangers, Geingob acknowledged that companies could attempt to bribe GRN officials and such deals would be difficult to detect. In a separate discussion with a high-level Ministry of Foreign Affairs (MFA) official, the Ambassador again stressed the need for the GRN to pay close attention to Iran's potential attempts to obtain Namibian uranium. End Summary. -------------- Let's Talk About Uranium -------------- ¶2. (C) On August 13, Hage Geingob, Minister of Trade and Industry and SWAPO Party Vice President, and Ambassador Qhieu discussed a broad range of issues. Responding to the Ambassador's inquiry into the GRN's plans for the upcoming Corporate Council on Africa's (CCA) business summit, the Minister steered the conversation to Namibia's fast growing uranium industry. The Minister reported that many companies from various countries had entered Namibia's uranium sector. He stressed that the Russians and Chinese were particularly active. In a surprisingly frank acknowledgment, the Minister said the Chinese and Russians leverage their historical (liberation struggle) ties of solidarity and comradeship to pursue uranium opportunities. ¶3. (C) Geingob, without prompting, mentioned that many Namibians acquired uranium exploratory licenses (EPLs) but did not exploit their EPLs for mining purposes. Instead, some Namibian recipients have simply resold their EPLs to foreigners for up two million Namibian dollars (USD $250,000) or more, noted the Minister. (Note: To better control the proliferation of exploratory licenses, the GRN introduced a moratorium on their issuance in 2007. According to a report by the Ministry of Mines Energy, the Ministry has processed 63 EPL requests related to uranium mining since May 2005. Nearly 40 were granted, while the rest are pending. End Note). -------------- Iran and the Uranium Sector -------------- ¶4. (C) When the Ambassador raised Iran, Geingob quickly responded that Tehran's interests in Namibian uranium date back to the time of Shah. He emphasized that the Iranian government's stake in Rio Tinto's Rossing Uranium mine predates the Islamic revolution. (Note: The Iran Foreign Investment Company (IFIC) maintains the Government of Iran's 15 percent stake in Rossing. Like other shareholders, IFIC has no off-take rights to the uranium oxide. Australia's Rio Tinto, which has a 69 percent equity position, has full control over production. End note.) ¶5. (C) The Ambassador warned that a rogue state such as Iran could use shell companies to obfuscate its attempts to acquire uranium and stressed the GRN should be vigilant about the potential for such arrangements. Geingob acknowledged that front companies could be an issue, and then - using the Ambassador's words - stressed that the GRN was being "very vigilant." Geingob remarked that Australian, Canadian, and French firms were the only companies currently running operational mines. He also commented that increased competition within the uranium sector is good, but noted that no U.S. companies were involved. Geingob repeated that the Russians had entered the market, but claimed the GRN was "not sure what they (the Russians) are doing." The Minister stressed that the GRN and the Ministry of Mines and Energy were keen to protect the country's reputation and thus would remain on the alert for any potential bad actors. Nevertheless, Geingob acknowledged that if an unscrupulous company bribed a dishonest official, it could be difficult to uncover. -------------- MFA on Iran and Uranium -------------- ¶6. (C) On the margins of a ceremony on July 29, Ambassador Mathieu took the opportunity to reiterate to the Deputy Permanent Secretary of the Ministry of Foreign Affairs that the GRN should remain vigilant to possible attempts by Iran, possibly through front companies and/or unscrupulous business dealings, to procure uranium from Namibia. The MFA Interlocutor -- Hinangerwa Asheeke -- responded that the GRN hoped the relationship between the United States and Iran would soon improve, and noted that Namibia had a longstanding relationship with Iran. Ambassador Mathieu acknowledged that legitimate business dealings were understandable and acceptable, but emphasized that UN sanctions must be respected. -------------- Comment -------------- ¶7. (C) Post has no indication that the GRN is planning or willing to enter into any deals that would circumvent UN Security Council sanctions against Iran. It is not clear, however, whether Namibia has sufficient safeguards and/or resources in place to detect and prevent an attempt by unscrupulous individuals to acquire uranium oxide on Iran's behalf. At every opportunity, we will continue to press GRN officials on the importance of remaining alert and adhering to UN sanctions. End Comment. MATHIEU