Mining’s contribution to developing Namibia

AUGETTO GRAIG The vibrant mining industry is home to some of the brightest gems in the crown of Namibian industry, and houses prime examples of the vision of an independent African nation that this young country is trying to become.From the incredibly fruitful diamond partnership model that the country has established with De Beers, spawning Namdeb and leading ocean-floor miner Debmarine; to Rössing, the oldest running open-pit uranium mine in the world; and lately with gold production breaking records from the start at B2Gold’s Otjikoto mine, the country knows how to mine.Constitutionally a mixed economy, Namibia has made considerable strides in getting a bigger contribution to the government and its citizens from lucrative mining activities sparked in 1908 when the diamond rush started near Lüderitz. Throughout long years of colonial subjugation vast wealth was extracted and shipped beyond the horizon to buy development abroad. Since Independence in 1990 policies and ministerial guidance have been aimed at making more of that money work here in Namibia. The latest 2015 annual industry report, brought out by the Chamber of Mines, tells us that since 1997 in-country value addition to Namibian mining activities has increased from N$3422 million to N$19 641 million in 2014. Most of that has been achieved in the diamond mining industry, which contributed N$12 065 million of the 2014 figure quoted. Total contribution to Gross Domestic Product (GDP) from all the activities of the mining industry was N$139.3 billion, no less than 9.6% of the entire GDP that year. National Statistic Agency projections for 2015 put the mining contribution at 11.9% of GDP. In 1997 mining brought home only 6.7% of GDP. Meanwhile, statistics generated by the chamber indicate its members paid N$3.76 billion in taxes and royalties in 2015, 11% more than the 2014 payout of N$3.39 billion. These achievements have been made in the face of a headwind from global economic conditions and a slump in international commodity prices. According to the chamber’s chief executive officer, Veston Malango, the 2016 financials may be even better than 2015 as Namibian mining reaps the rewards of riding the global economic waves better than most. He says work done in 2011 - when the government accepted proposals on initiatives to attract new investment and set up a joint value-addition committee - contributed to the solid position that helped local miners weather the storm. Two independent studies at the time identified ‘low-hanging fruit’ and what needed to be done, mineral by mineral. “The only thing outstanding, and we hope for delivery this year, is the mineral beneficiation strategy for Namibia,” Malango said earlier this year.From humble beginnings as diamond miners, mining in Namibia has grown to include the production of gold, copper, zinc, fluorspar, lead, uranium, pyrite, iron, salt and cement. Today almost twenty established mines are considered the ‘big boys’. New mines are joining the fray, such as Gecko’s Okandjande graphite mine which will soon supply the Okorusu Fluorspar operation which is moving out of care and maintenance, Malango said. There are several others on the horizon like the rare-earth project in the Kunene Region which is being pushed hard, and Namib Lead and Zinc outside Swakopmund where North River Resources recently obtained their mining licence, he added. Another new development of consequence is the opening of the pit at Skorpion Zinc and their planned expansion of the refinery with the addition of a roaster plant, which will remove the need to export zinc concentrate and add to Namibia’s value-addition capabilities. Synergies are coming to the fore, such as Dundee’s multibillion-dollar new plant built at Tsumeb to facilitate the copper operation as well as supply the Rössing uranium mine with sulphuric acid to obviate the need for importing the dangerous chemical. Malango is hopeful that other developments such as the Otavi steel mill, or the foundry suggested at last year’s Mining Expo, may accelerate this trend. “As a chamber we support downstream linkages and value addition. It is in our interests to see minerals used for further activities beyond the mine gates. This will require a new set of investors but now we are producing the right stuff,” he said. For example, at Tschudi Mine the pure copper is turned into copper cathodes, “which opens the door for the manufacturing of copper cables or electric motors, et cetera. Refined metal first time, that is the starting point,” said Malango.The focus area where mining is trying to do more to contribute to Namibian development is procurement. According to Malango improved local procurement has been identified as a strategy under President Hage Geingob’s Harambee Prosperity Plan and is an aspect that the mining community has welcomed wholeheartedly. “We have committed ourselves,” he said. “The figures speak for themselves.”Local procurement of goods and services by the Namibian mining industry increased by over 50% between 2014 and 2016 - from over N$7 billion, or 34% of total industry revenue in 2014, to more than N$11 billion, or 44% of total industry revenue in 2015.But Malango emphasised that the level of procurement of local goods and services could only increase significantly if the level of industrialisation in the country increased. “The local content is really a function of the level of industrialisation. The upstream manufacturing component needs to be developed locally. You need to have industries that produce the goods the mining industry requires,” he said.He added that local content in the industry could make a significant impact on the economy and that Namibia had legislation to encourage local procurement as much as possible. “Look at the Minerals Act; one of the conditions for receiving a mining licence is that investors must procure local goods and services as much as possible and should also employ Namibians as much as possible.” A recent report by the Canadian International Resources and Development Institute and Mining Shared Value, in conjunction with the Namibia University of Science and Technology (NUST), on local procurement regulations in the mining industry in Namibia and South Africa, recommends building up the capacities of suppliers and introducing new manufactured goods at competitive prices. In addition to capacity building targeted at suppliers, there are significant opportunities to coordinate across mining companies to aggregate orders in a way that allows domestic suppliers to utilise them as the basis for expansion, it found.The study also shows that many non-regulatory approaches can help mining companies purchase more local goods and services. Government-created programmes, including supplier portals, capacity-building support for businesses, coordination of aggregate orders by industry, and regional cooperation, all offer opportunities that should not be ignored, according to the research. The governments of both countries should engage with industry to better understand the non-regulatory incentives that can be supported, reads the report.

Mining’s contribution to developing Namibia

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Republikein 2026-02-03

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Mining’s contribution to developing Namibia

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