Chart of the Week

Namibia applies distinct tax regimes to different segments of its mining industry, drawing a clear line between diamond and non-diamond mining. Diamond mining is subject to a corporate tax rate of 55%, compared to 37.5% for gold and base metals. Additionally, diamond producers pay a 10% royalty, whereas other mineral producers are subject to a 3% royalty. Export levies, which are intended to encourage local value addition, also vary, ranging from 1% on gold bullion to 2% on uncut diamonds. VAT is uniformly applied at 15% across all mining activities. The tax structure places a significantly higher burden on the diamond industry, which has historically contributed the bulk of mining-related revenue to the fiscus. However, this is set to change. Although diamond production has not yet declined substantially, revenue has fallen due to a drop in natural diamond prices. Debmarine has retired two of its vessels in a bid to reduce costs. As a result, diamond-related taxes are projected to fall to NAD1.9 billion in 2025/26 from NAD3.3 billion the year prior – the first time it will be below non-diamond mining taxes. While the outlook for the diamond sector remains uncertain – particularly if the rise of synthetic diamonds proves to be a structural shift – the prospects for non-diamond mining are far more positive. Gold prices have surged, and several new uranium operations are expected to come online in the coming years. This aligns with the increasingly bullish sentiment around uranium, as the global cost-of-living crisis slows Western governments’ transition to renewable energy. These developments should help to offset the estimated decline in government revenue from the diamond sector despite facing a more favourable tax structure. At the recent Mining Expo in Windhoek, concern rippled through the mining industry because of the announcement of a proposed requirement for 51% local ownership in all new mines. Concerns around feasibility and what it would mean for the industry were whispered in ad hoc meetings throughout the event. Despite its shortcomings, the mining industry has played a critical role in Namibia’s economy. B2Gold has, since 2015, reinvested 61% of the USD2.9 billion revenue it has generated into the Namibian economy through taxes, wages, and local procurement, and is currently the largest single taxpayer in the country. While the proposed policy does not apply to existing operations, it could prove to disincentivise future exploitation and development investment. Questions persist over whether Namibia will still have a viable mining industry in a decade if the policy is realised.

Chart of the Week

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Republikein 2026-03-12

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Chart of the Week

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Republikein 2026-03-12

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