3 December 2018

Namibia: 'Proposed Taxes Could Harm Mining'

The mining industry is concerned that the proposed taxes in the income tax amendment bill of 2018 could be detrimental to the industry, and thus be counterproductive to growing the economy.

The Chamber of Mines' president Zebra Kasete made these remarks at the mining industry's briefing with mines and energy minister Tom Alweendo on Wednesday.

He said in line with this, the industry had made a submission to the finance ministry, and the mines and energy ministry had engaged finance on the concerns of the industry.

"Recognising the state of the economy and the tight fiscal environment that the government finds itself in, the only solution is growing the economy through further investments. New mines will create new jobs and grow the economy," the chamber president said. Kasete added that 2018 was a very challenging year for the mining industry as commodity markets continued to be volatile, with uranium prices still being very depressed, "a situation that has forced the Langer Heinrich uranium mine to go into care and maintenance, unfortunately with a loss of about 600 jobs."

Robust fundamentals of the uranium markets in the medium to long term are, however, consoling.

"Indications are that the markets may recover by 2022, at which point the two mines under care and maintenance (LHU and Orano Mining Namibia's Trekkopje mine) will come back into production, and at least five uranium projects will advance to mine development.

"We have equally seen new operations in graphite and lithium open mines quickly close down due to market volatility and other operating overheads, which rendered these operations unprofitable. The challenges are being addressed and the mines may come back into operation once market conditions improve," Kasete said.

Alweendo noted that the industry has not been doing very well due to unfavourable commodity prices for some minerals.

"There have also been other challenges, including water and power constraints, depleting deposits and others beyond our control. However, despite the challenges the industry is facing, mining activities in our country contribute significantly to our economy and national development agenda," the minister said.

Alweendo added that the long-outstanding issue of additional conditions on granting exclusive prospecting licences (EPLs) have been removed, but those concerning the granting of mining licences remain applicable. He added: "I have taken note of your concerns and issues regarding pending mineral licence applications. In order to improve the process, it has been resolved that the Mineral Prospecting and Mining Rights Advisory Committee is now meeting twice a month instead of once to speed up the process. We have also resolved to expedite the review of the Minerals and Diamond Act, focusing on identified critical and strategic issues."

charmaine@namibian.com.na, twitter: Char_Ngatjiheue.

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