Extract: Proposed Namibia Mining Policy Won't Hit Husab Project

Australia's Extract Resources Ltd. (EXT.AU) said Monday it's confident that proposed changes to Namibia's mining policy won't adversely affect its US$1.48 billion Husab project, one of the world's largest untapped uranium deposits.

Shares in Perth-based Extract fell sharply last week after Namibian Mines and Energy Minister Isak Katali said uranium, copper, gold, zinc and coal have been declared strategic minerals to allow for exclusive exploration and mining of them by Epangelo Mining Co.

"Extract continues to have regular and positive consultation with the government of Namibia in relation to its Husab uranium project," the company said in a statement to the Australian Securities Exchange.

It added the permit area that covers the Husab project in Namibia was recently renewed for a further two years through the end of April 2013.

Namibian President Hifikepunye Pohamba in his state of the nation speech Wednesday said he planned to introduce new mining legislation later in the year that would target strategic resources. "Legislation will be introduced to ensure that strategic minerals are exploited with the participation of the public sector," he said.

The comments come at a time when South Africa, from which Namibia gained its independence in 1990, is discussing a greater role for the government in the mining industry and the possible nationalization of assets. The nationalization debate is being driven by the youth wing of the governing African National Congress and has been dismissed by among others Susan Shabangu, minister of mineral resources.

Extract said it endorsed an Apr. 29 statement from the Chamber of Mines of Namibia, which expressed concern over Katali's comments in parliament about the proposed changes to mining policy more than a week earlier.

The Chamber of Mines of Namibia had been assured by the minister that any changes wouldn't affect mining licenses already in issue, Extract said.

However, Katali hasn't yet confirmed this position in a press conference.

-By David Winning, Dow Jones Newswires; [phone]; [e-mail]