By Chamwe Kaira

April 3 (Bloomberg) -- Namibia Water Corp., the state-owned water utility, plans to build a second desalination plant to cater for increasing demand for water from existing and planned uranium mines.

The facility will be built on Namibia's Atlantic coastline at a cost of 1.5 billion Namibian dollars ($192.1 million), Chief Executive Officer Vaino Shivute told reporters today in the capital, Windhoek. The plant is expected to be commissioned in 2010 and will have the capacity to pump 25 million cubic meters (6.6 billion gallons) of water a year.

``Due to pressure on groundwater sources, we were directed by the government to construct a desalination plant,'' Shivute told journalists in Windhoek.

Namibia is Africa's biggest producer of uranium, after Niger, according to the Web site of the Uranium Information Centre.UraMin Inc., a unit of Areva SA, is will open the southern African nation's biggest uranium mine in July, while Perth-based Bannerman Resources Ltd. and Vancouver-based Xemplar Energy Corp. are among companies exploring for the nuclear fuel in the country.

NamWater is already building a desalination plant jointly with Uramin, which is expected to be commissioned at the end of 2009. The facility will have the capacity to pump 20 million cubic meters a year and serve Uramin's Trekkopje project.

``All capital and operational costs associated with desalination and supply of desalinated water will be carried by the mining companies, either by capital payment upfront or via water tariffs,'' Shivute said.

Five More Mines

Demand from the existing mines, such as Rio Tinto Plc's Rossing Uranium mine and Paladin Resources Ltd.'s Langer Heinrich operation, and planned projects will increase water demand by 53 million cubic meters a year by 2015, Shivute said. Namibia currently consumes 67 million cubic meters a year.

``Five more uranium mines are being planned and if the current price of uranium holds, we expect them to be commissioned by 2015,'' Shivute said

Toronto-based Forsys Metals Corp. will commission its Valencia mine in Namibia by September 2009, while Bannerman's mine, as well as projects by Perth-based Extract Resources Ltd. and West Australian Metals Ltd., are scheduled to come on line in 2011. Deep Yellow Ltd. is expected to begin production in Namibia in 2013.

Uranium prices have fallen 49 percent to $71 a pound since hitting a record $138 a pound on June 6 last year, according to Metal Bulletin data.

To contact the reporter on this story: Chamwe Kaira in Windhoek via Johannesburg at pmrichardson@bloomberg.net.

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