How significant is the mining industry to the Namibian economy?

Namibia is a renowned mining jurisdiction, home to some of the world’s largest uranium deposits, and is the world’s largest producer of marine diamonds. It relies on the industry for economic growth as it contributes approximately 10% to the country’s GDP. Unfortunately, due to the pandemic and resulting restrictions, mining’s contribution to Namibia’s GDP contracted by about 12% over the past year.

There are ongoing efforts to develop local beneficiation. For example, in the diamond industry there has been an enormous drive to promote the local cutting and polishing industry. Today, 15% of the diamond production in Namibia is handled by a local Namibian company. Although still at feasibility stage, there are plans to increase the amount of locally refined zinc with the possible conversion of a zinc refinery plant in Namibia.

What is hindering the Namibian mining industry’s growth?

There is room for improvement in how exploration licenses are allocated. Currently, there is a complete moratorium on issuing new licenses within Namibia, which will only be removed in August this year. It was put in place because the Ministry saw a need for improvement in the licensing process and established a new policy and regulatory frameworks. By the end of 2021, we will have a positive policy outcome and (hopefully) a more conducive environment. The availability and quality of geological and geophysical data could also improve. Currently, the Geological Survey of Namibia hosts and owns the geological data sets. This information should be easily accessible to the scientific and mining fraternity and should be free (or subsidised) to encourage exploration investment.

How does Standard Bank Namibia support the mining industry?

In addition to providing funding and access to liquidity, more recently our focus has been on partnering with the mining sector providing solutions that are not necessarily in the day-to-day operations of a bank. As a financier, we ensure that we take part in critical conversations that happen in the sector.

What has been Namibia and the mining sector’s experience with the pandemic?

The mining industry’s contribution to the GDP has decreased over the past year as mineral prices were affected, operations were delayed, economic activity in key demand markets slowed down, and there were logistical challenges in getting raw materials in and finished products out. Mining houses faced a very complex operating environment of trying to continue to operate while also maintaining the necessary safety measures In terms of recovery, the Namibian government has made considerable efforts to mitigate risks. The industry has also learnt valuable lessons throughout the pandemic and now has to continue to apply those to increase productivity and efficiency. The impact and uncertainty of the pandemic continues, but there seems to now be a glimmer of hope on the horizon.

How would you characterize the health of the Namibian mining industry compared to other mining jurisdictions?

The Namibian mining industry is quite resilient, as demonstrated over the past few months through continuing to operate in these unprecedented times

There are certain industrial and battery minerals that will play an essential role in the future, and Namibia is well-positioned for this.

Namibia offers a socio-political environment that is favourable to investors. There is a challenge around skills development, but a number of higher institutions are starting to design and develop specific courses to address the shortage of skills in the mining industry.