Brigitte Weidlich
14 November 2008
THE proposed royalties to be levied on all unprocessed minerals exported in raw form could scare investors away, a Member of Parliament has cautioned.
"Many mining companies operating in Namibia spend millions in community development, (donate to) the health sector and education, and I cannot remember that any ministerial statement was made or words of appreciation spoken to thank these companies," said Jurie Viljoen of the Monitor Action Group (MAG) opposition party in the National Assembly this week.
"The intention of Government to amend the Minerals Act to introduce this royalty should not kill the goose that lays the golden eggs by penalising mining companies for exporting raw (mineral) materials," Viljoen cautioned.
In Namibia royalties only apply to the diamond industry so far, but the Minister of Mines and Energy, Erkki Nghimtina, last week tabled an amendment bill to expand the royalty payment to all raw minerals exported from Namibia.
According to Viljoen, the South African government did not have a royalty tax (except on diamonds) and corporate tax was only 28 per cent compared to 35 per cent in Namibia.
"The Namibian Government already has introduced a royalty of 3 to 10 per cent on turnover for some minerals and to expand it to all raw mineral exports might scare investors," Viljoen noted.
"A Russian company is currently looking at building a smelter near Otjozondu for manganese which might cost up to N$6 billion.
They have the market and probably the money to do it.
If they realise that their investment will become more risky due to the future royalty on top of the price fluctuations for commodities, they might look for other areas to invest," the MAG politician warned.
The Russians might be interested in Angola's Kassala Kitungu area, which is rich in manganese and where the Angolan government is looking for investors, he told Parliamentarians.
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