Swakop Uranium Mining Company has mandated Standard Bank Namibia for a US$200 million (about N$2 billion) letter of credit facility to purchase equipment, The åç learnt at the Mining Expo and Conference last week.
Swakop Uranium Mining Company runs the N$20 billion Husab Project whose construction started late April this year.
The Husab Project is jointly owned by the China General Nuclear Power Group (formerly China Guangdong Nuclear Power Holding) and the Namibian state-owned Epangelo.
The two entities signed an engineering, procurement and construction management (EPCM) contract last year in November for the Husab Project, which would be the third largest uranium mine in the world with a potential of producing 6 800 tonnes uranium oxide per year.
The letter of credit is often used in international transactions to ensure that payment will be received because of the nature of international dealings, including factors such as distance, differing laws in each country and difficulty in knowing each party personally.
The bank will also act on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.
Standard Bank head of marketing Thaddius Maswahu could neither confirm nor deny citing client confidentiality.
"We cannot confirm nor deny this issue.As a bank we maintain client confidentiality relationship," he said.
Deon Garbers, the senior vice president of operations of Swakop Uranium revealed in his presentation during the Mining Expo and Conference last week that the equipment is expected to be delivered to the site during the third quarter of this year, before the commencement of the pre-stripping phase in the second quarter of 2014.
Garbers also said permanent power and water supply are expected to be available mid 2015 while the process plant and associated amenities, should be completed by end of 2015 with overall hot commissioning being done later the same year.
The EPCM contract was awarded to the Husab Project Joint Venture, comprising the international engineering and project management company AMEC, and Tenova Bateman (Sub Saharan Africa).
AMEC will act as lead on all Husab Project Joint Venture activities and will hold specific responsibility for project management and engineering, with responsibilities for procurement and construction management to be shared with the joint venture partner.
The Husab Project is expected to create 2 000 permanent jobs and up to 6 000 temporary jobs during the construction phase, while 8 000 indirect jobs are projected to be created in related service industries.
According to Garbers, progress at Husab stands at 23% as of April this year with 40% of value of contracts issued to Namibian companies.