France's Areva will put its Trekkopje project in Namibia on care and maintenance until such time as market conditions for uranium improves.
Areva has been struggling financially since the March Japanese Fukushima nuclear disaster led to a drop in uranium prices.
At the end of 2011 Areva announced write-downs of EUR1.5 billion in relation to the African mining operations and specifically Trekkopje, and more than EUR800 million in charges against its nuclear operations.
Spot uranium prices fell below $50 per pound level this year, well below the $66.50 prior to Fukushima and down from historic high levels above $120 in 2007.
World Nuclear News reports a mining licence for Trekkopje located near the coast in the Namib desert was granted in June 2008 and the project was supposed to enter production less than two years later:
"The ore at Trekkopje has very low uranium content, and the challenging project will be the world's first uranium mine to use a sodium carbonate/bicarbonate heap leach process. Some 100,000 tonnes of rock per day would need to be processed in order to produce the planned output of 3000 tonnes of uranium per year."
Apart from Areva's project, London-listed Rio Tinto Plc and Australian miner Paladin Energy currently produce uranium in the country while another three projects are in various stages of completion.
Last year nuclear power consumption declined 4.3%, the largest drop-off on record, said BP in its annual study of global energy use. Japan cut back nuclear power by 44.3%, and Germany reduced nuclear consumption by 23.2%.