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).

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Summary
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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.

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Let's Talk About Uranium
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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).

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Iran and the Uranium Sector
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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.

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MFA on Iran and Uranium
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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.

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Comment
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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