• Pages
  • Editions
01 Cover
02 Welcome Letter / Sections
03 Index & Interview Directory
04 Section 1: Introduction
05 The Road to Recovery
06 ABSA Group Interview
07 PwC Interview
08 Regional Trends
09 Sustainability & ESG Gaining Momentum
10 SRK Consulting Interview
11 Nafasi Water & ZN Geo Services Interviews
12 Section 2: Production, Development and Exploration
13 Precious Metals
14 Gold Fields Interview
15 Harmony & Pan African Resources Interviews
16 Base and Energy Metals
17 Lepidico Interview
18 Trevali Mining Interview
19 Orion Minerals Interview
20 Vedanta Zinc International Interview
21 Kumba Iron Ore Interview
22 Diamonds
23 Lucara Diamond Interview
24 Debswana Interview
25 Section 3: South Africa
26 South Africa
27 Ministry of Mineral Resouces and Energy SA Interview
28 Minerals Council SA Interview
29 Seriti & Exxaro Resources Interviews
30 NSDV & ENSafrica Interviews
31 Insights on South African Mining Industry's Health
32 Section 4: Namibia
33 Namibia
34 Chamber of Mines Namibia Interview
35 RMB & Standard Bank Namibia Interviews
36 Walvis Bay Salt Holdings Interview
37 Insights on Namibia as a Mining Investment Destination
38 Section 5: Equipment and Services
39 The Journey to Modern Mining
40 Murray & Roberts Interview
41 Kal Tire Interview
42 Eazi Access Interview
43 METC Engineering Interview
44 Insights on Digital Mining Revolution in Africa
45 MEMSA Interview
46 Fabchem Mining Interview
47 Insights from Local Manufacturers
48 Energy
49 juwi Interview
50 Engie Impact & Vivo Energy Interviews
51 Howden Interview
52 Section 6: Sponsored Company Profiles
53 Trevali Company Profile
54 Murray & Roberts Company Profile
55 Concluding Remarks
56 Credits

Namibia

Namibia's mining industry driving local economic development

Bordering South Africa, Botswana, Angola and Zambia, this largely deserted ranch land with its small population of 2.5 million is positioning itself as a gateway to the Southern African market as it enjoys one of the most stable and peaceful political environments not only in the region but on the continent. It is also home to uranium, diamond and metal ores.

The Namibian economy is projected to grow by 2.6% and 3.3% in 2021 and 2022, respectively, according to the African Development Bank (AfDB). However, it faces substantial risks as it battles with the rapid spread of Covid, which is overwhelming a small population where vaccine rollout has been slow. "We were already in the midst of a recession that started in 2016, which we have been struggling to recover from," explained Gert Maritz, CEO of Lithon, a group of companies primarily focused on engineering, development and investments supporting the mining industry in South Africa and Namibia. "The pandemic exacerbated pre-existing structural challenges and we witnessed an economic contraction of around 8%, especially as demand for diamonds dwindled."

The government is trying to mitigate the risk and revive local tourism, agriculture, retail, and wholesale trade through its economic recovery program of US$0.5 billion. According to the World Bank, even the mining sector contracted by 12.2% year-on-year in 2020 due to the falling demand for diamonds and domestic factors. "Overall, the impact of Covid was well-buffered by the nature of the diversified mining portfolio of the country," highlighted Fabian Shaanika, sector lead of mining and natural resources at Rand Merchant Bank (RMB) in Namibia.

Namibia is the world's fourth-largest uranium producer, has the seventh-largest diamond output and hosts smaller mining operations in other strategic commodities such as copper, iron and zinc. The mining value chain is one of the historic bedrocks of Namibia and it accounted for 33.6% of GDP in 1980 and today accounts for approximately 11.1% of GDP and employs over 1.5% of the labour force, according to the Namibian National Planning Commission (NPC). The mining sector is also the largest source of foreign exchange earnings and led to the establishment of towns such as Orangemund and Arandis.

The Namibian mining industry is attractive due to the country's consistent economic and political stability, well-established infrastructure and rich mineral resources. The country witnessed an increase in its Investment Attractiveness Index from 58.22 in 2019 to 59.72 in 2020 in the Fraser Institute's Annual Survey of Mining Companies. "Namibia is an excellent mining jurisdiction. It is politically and legally stable, and the permitting and licencing process is clear, precise and visible," confirmed Jurie Wessels, executive chairman of Vanadium Resources, an Australian junior mining company. "It also has a very receptive and involved Minerals Department that is not overly bureaucratic."

“We commenced with a US$430 million refinery conversion project to co-treat sulphide and oxide ores and to increase capacity to refine zinc sulphide concentrate from the Gamsberg mine. This project sees the refinery’s production double its capacity to 300,000 mt/y within the next 18-20 months.”

Laxman Shekhawat, Executive Director and Business Head, Vedanta Zinc International

Nonetheless, it poses some challenges to operators, especially regarding regulatory duplication and lack of skilled labour. According to André Snyman, managing director of Walvis Bay Salt Holdings, a solar salt producer in Namibia, the weak labour force is a product of the country's ailing educational system. "The education system in the country is problematic due to the constant lack of funds. Many of Namibia's strengths are weakened due to improper management fuelled by corruption," he said.

All African jurisdictions, with the exception of Namibia, increased their Policy Perception Index (PPI) scores in the Fraser Institute's survey in 2020. Namibia, however, witnessed a 13-point decline as its ranking fell from 14th out of 76 jurisdictions in 2019 to the 47th out of 77 jurisdictions in 2020. "There have been some uncertainties in Namibia about legislation that could possibly be introduced and this has affected Namibia's rankings recently," indicated Werner Ewald, managing director of Bannerman Mining Resources, an ASX and NSX listed exploration and development company with a 95% interest in the Etango uranium project in Namibia.

To address regulatory inconsistencies and ensure certainty in the licensing process, the government has implemented a complete moratorium on issuing new licenses within Namibia. However, there remains a lack of clarity concerning other regulatory frameworks, such as regarding the future of local content laws, for example, as well as the National Equitable Economic Empowerment Bill (NEEEB). "The NEEEB has been on the table for many years and has several pillars associated with it. The one pillar that sometimes creates some uncertainty is the ownership pillar. If legislation keeps hanging, it creates uncertainty," elaborated Ewald.

Nevertheless, the regulatory uncertainty in Namibia is minimal compared to other SADC mining countries, and the country has more established communication channels and open discussions with mining companies before any drastic changes are made. "There is an ongoing dialogue between mining companies and the government, which is rare, so we are fortunate to be operating there," confirmed Ricus Grimbeek, president and CEO of Trevali Mining, a Canada-based natural resource company, operating the Rosh Pinah underground mine.

"For explorers to invest, there needs to be certainty of tenure, and the economics in terms of taxes and royalties must be attractive. There have been some uncertainties in Namibia about legislation that could possibly be introduced and this has affected Namibia’s rankings recently."

Werner Ewald, Managing Director, Bannerman Mining Resources

Local beneficiation and value addition journey

Being a small commodity-dependent economy makes Namibia susceptible to the volatility of commodity prices. There have been several attempts to diversify the mining sector and to process its products, which the Namibian government is promoting under its National Development Plans (NDPs), Industrialization Policy (IP) and its implementation document "Growth at Home Strategy."

Examples of increasing value addition through beneficiation are the production of uranium oxide from uranium ore, processing zinc on a small scale, production of gold bars (B2Gold) and copper cathodes. According to Shaanika of RMB, there has also been an enormous drive to promote the local cutting and polishing of diamonds and approximately 15% of the diamond production in Namibia is handled by a local company.

In zinc, Vedanta Zinc International (VZI) is investing N$6.5 billion to develop the Skorpion refinery. “We commenced with a US$430 million refinery conversion project to co-treat sulphide and oxide ores and to increase capacity to refine zinc sulphide concentrate from the Gamsberg mine,” explained Laxman Shekhawat, executive director of VZI. “This project sees the refinery’s production double its capacity to 300,000 mt/y within the next 18-20 months.”

However, the challenge with local beneficiation is power as Namibia relies on imported power from South Africa. Recently, however, the country's power infrastructure is rapidly developing, according to Joe Walsh, managing director of Lepidico, a vertically integrated lithium exploration and development company operating the Karibib project in Namibia. "By around 2025, Namibia expects to generate some 80% of its power from renewable sources," he confirmed.

Image courtesy of Walvis Bay Salt Holdings

Next:

Interview: Chamber of Mines Namibia