Etango faces N$5.9bn build cost

Bannerman Energy’s Etango uranium project has moved into full-scale construction after securing funding for its development, bringing the country closer to adding another major uranium producer to its mining industry.

The project’s joint venture took a Final Investment Decision in October, following the completion of a strategic investment by China Nuclear Corporation Overseas Limited (CNOL) and an institutional share placement.

CNOL’s investment totalled US$320.4 million, equivalent to about N$5.33 billion at the specified exchange rate. This included US$294.5 million invested in the project’s joint venture and a US$25.9 million reimbursement payment to Bannerman.

Bannerman also completed an institutional equity placement worth A$124 million.

The company says the funding provides a fully financed pathway through construction, the ramp-up to production and the initial period of commercial operations.

Etango is targeting first production in 2028, with forecast average annual output of about 3.5 million pounds of uranium oxide.

For Namibia, the project represents a substantial investment in the mining sector. However, the wider economic impact will depend on how much of the construction expenditure, employment and future revenue benefits the domestic economy.

Local businesses enter the construction programme

Bannerman reported a contractor workforce of approximately 523 personnel at the site at the end of September, as early construction activities progressed towards full-scale development.

The company has also identified several Namibian businesses participating in construction and supporting infrastructure.

Local contractor Tulela Mining & Construction is producing aggregate for the project’s heap-leach drainage system, while K Neumayer Civil Contractors is undertaking concrete construction across key processing facilities.

Other Namibian-owned businesses involved in smaller construction packages include Dappa Trading Group, Dannie Construction and Nelugo Trading Enterprises.

AN Construction is working on the permanent water supply pipeline, which was about 90% complete at the end of the reporting period.

These contracts offer opportunities for local businesses to participate in a major mining development. However, Bannerman’s quarterly report does not disclose the total value of contracts awarded to Namibian-owned companies or the proportion of the overall project budget spent locally.

It also does not break down the workforce by nationality, occupation or employment status.

Those figures would help establish how much of the investment is translating into local economic activity rather than expenditure on imported equipment, foreign contractors or other costs incurred outside Namibia.

Infrastructure investment extends beyond the mine

The project’s development also requires supporting infrastructure for water, electricity and the handling of sulphuric acid.

Bannerman has a permanent water supply agreement with NamWater and a power supply agreement with NamPower. Detailed design work is progressing on a 132-kilovolt powerline and associated substations.

At Walvis Bay, the design of a sulphuric acid storage and handling facility was about 53% complete at the end of September.

The infrastructure requirements create potential opportunities for engineering firms, construction companies and other suppliers. Their longer-term value to Namibia will depend on the costs involved, the arrangements governing their use and whether any additional capacity can serve other users.

Bannerman estimates that pre-production capital expenditure will total about US$353 million, equivalent to N$5.87 billion, with a margin of plus or minus 10%.

About US$64 million, or N$1.06 billion, had already been incurred by 30 September.