27 May 2014

Namibia: Legislation for Strategic Minerals Imminent

Photo: Namibia Economist
Skorpion Zinc Mine

GOVERNMENT is drafting legislation for the mining of strategic minerals with two committees already in place to deal with the matter.

This was revealed by the permanent secretary in the Ministry of Mines and Energy (MME), Kahijoro Kahuure at the annual mining conference held last week.

"It is perhaps appropriate to have legislation for that," Kahuure said during discussions with participants. Responding to a question from the floor about how government would handle strategic minerals since nothing had been forthcoming after an announcement in 2011, Kahuure responded: "In the not too distant future legislation might be in place to deal with this matter. There is a committee dealing with strategic minerals and a technical committee was put in place."

He would not reveal if a new law would be drafted or if the Minerals Act of 1992 will be amended accordingly.

The mining industry in Namibia has repeatedly called on Government to end the uncertainty about strategic minerals.

At the annual general meeting of the Chamber of Mines last week, its president Werner Duvenhage said, "the uncertainty about strategic minerals continues with no legislation passed to date for its implementation." While the Chamber was not opposed to Government participation in the mining sector, it remained concerned about the prospect of the State-owned mining company [Epangelo] owning all strategic mineral deposits yet to be discovered. "We believe this will not lead to Government's desired outcome, but will instead result in stagnation of exploration activities," Duvenhage added. "Funding by publicly listed exploration companies will be highly challenging under the envisaged joint venture partnerships with the State-owned mining company".

On 20 April 2011, Mines and Energy Minister Isak Katali announced in Parliament during his ministry's budget presentation that Cabinet had declared uranium, copper, gold, zinc and coal, as strategic minerals. These would only be explored and mined exclusively by the State-owned company Epangelo Mining, set up on 2008.

The mining sector in Namibia and worldwide reacted nervously, fearing restrictions on their operations.

Three weeks later Katali met the Chamber of Mines to clarify uncertainties. Diamonds and rare earth metals were added to the list of strategic minerals, while zinc appeared to have been removed. Interestingly, manganese, which is mined in Namibia, is not on the list. Manganese is regarded by developed states like the USA, as a strategic mineral.

Minister Katali made clear that existing exploration licences (EPLs) and mining licences for strategic minerals were not affected.

New EPLs and mining activities for strategic minerals would only be carried out by Epangelo mining, which could however enter into joint ventures.

At the meeting Katali stated that according to the Namibian Constitution, "natural resources below and above the surface of the land" belonged to the State. He then further noted that "to implement the Cabinet decision, a change in legislation shall be effected." This has not yet happened. The Minerals Act of 1992 is being reviewed. A review of the Minerals Policy was completed three years ago and forwarded to the Attorney General.

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