It certainly has not been a great day to be an investor in ASX uranium shares.
Two prominent shares have taken a sizeable tumble on Tuesday due to news out of one of Africa's smallest countries, Namibia.
During Tuesday's session, comments from the government of the southern African country, with a population of just over 2.5 million, have wiped off half a billion dollars from the combined valuations of Deep Yellow Limited (ASX: DYL) and Paladin Energy Ltd (ASX: PDN).
This follows a 20% decline by the Paladin Energy share price and a 10% fall from Deep Yellow's shares.
What is going on with ASX uranium shares and Namibia?
Reports claim that the Namibian government is looking to acquire minority stakes in mining operations across the country.
Bloomberg quotes Namibia's Mines and Energy Minister, Tom Alweendo. He said:
We are making a case that local ownership must start with the state, which holds ownership of our natural resources. The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay.
Just how large a stake, nobody quite knows at this stage. But whatever happens, it will be a bitter blow for Paladin Energy. That's because it owns the Langer Heinrich Mine in Namibia. This is described as a proven tier one asset in the global nuclear fuel energy cycle.
After being out of action for several years due to low uranium prices, the operation is currently on a pathway back to production. Much to the delight of the Namibian government, no doubt.
As for Deep Yellow, it has an ownership in a number of projects in Namibia. This includes Tumas and Omahola Projects (100%), Nova JV (39.5%), and Yellow Dune JV (85%).
In respect to the former, the Tumas project is understood to be similar to the Langer Heinrich Mine. Management estimates that it has net present value of $613 million.
These are interesting times for ASX uranium shares.
