11 January 2013

Namibia: Three Mining Licences Issued

The Ministry of Mines and Energy says it has granted three mining licences to international investors in the past two months.

Mining Commissioner, Erasmus Shivolo told the Economist upon enquiry that mining licences had been granted to the Otjikoto Gold Project, the Shiyela Iron Project and to the Chinese-owned Zhonghe Resources for uranium mining.

The commissioner added that two other mining licenses were renewed for Fourth Mining Company in respect of Precious Stones (diamonds) and Semi-precious Stones during the 2012 calendar year.

In the meantime, Shivolo said twenty six mining license applications are still pending. "Most of them have been assessed and lack either technical and or financial viability information or some statutory compliance. Applicants are attending to those issues before we can take further consideration. It is difficult to predict when all those applications will be finalized because it depends on how quickly we receive the information from the applicants, and the availability of staff members to evaluate the additional information."

Although the granting of a mining licence involves other stakeholders such as the Ministry of Environment and Tourism, Shivolo noted that it takes up to a year for a mining licence to be granted. He said: "We are probably one of the fastest countries in that process in the world."

B2Gold Namibia, developer of the N$370 million Otjikoto Gold Project, was granted a 20-year mining licence early December. Parent company, B2Gold Corp said the granting of the licence was the last major requirement before the start of full scale mine construction, slated for the first quarter of this year.

Construction of the mine is expected to last two years with the first gold production from the mine projected for the fourth quarter of 2014 and the first full year of production being 2015.

The Otjikoto gold project is expected to produce over 100,000 ounces of gold over a ten-year mine life based on a Preliminary Economic Assessment , however, a feasibility study that is nearing completion, is expected to recommend a production Base Case that outlines significantly higher projected annual gold production in the first five years of the mine life.

The Shiyela Iron Project, is the only known commercially viable iron deposit in the country. Once operational, the project will initially produce two million tonnes per annum of a high quality, coarse grained magnetite expected to attract a premium price in the export market. Depending on the Walvis Bay port capacity, ongoing exploration success and overall market economics, the project could ultimately be expanded to around 7.5 million tonnes per annum of magnetite product.

Very little is known of Zhonghe Resources' operations, and a call to the company's offices in Windhoek yielded no response as management officials were said to be in China for their holiday.

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