24 April 2019

Namibia: Mineral Benefits Elude Namibia

THE absence of an elaborate mineral beneficiation strategy for Namibia which could dictate how the country can benefit from its natural resources, has industry experts worried.

Experts The Namibian spoke to stated that a mineral beneficiation strategy would help the country to export high-valued products and command more foreign reserves.

Although the Minerals Act of 1992 lists taxation and royalties as some of the ways through which the country can benefit from its natural resources, it is vague on how value addition should be applied to these resources. Currently, value addition to minerals beyond mine gates has been successful only to diamonds through the cutting and polishing industry. The beneficiation strategy for diamonds was enforced through the Diamond Act of 1999.

The act provides for control measures in respect of the possession, purchase and sale, processing, and import and export of diamonds.

The Diamond Act further obliges the producers and miners of rough diamonds to sell their output to Namibian diamond-cutters and polishers, leading to the establishment of 11 polishing companies in the country.

Chamber of Mines of Namibia chief executive officer Veston Malango believes that with the right approach, value addition to Namibia's abundant natural wealth is possible.

"Value addition is doable because of our coastline. We have more advantages than those countries that have no coastline. To facilitate value addition, our message to the government has been 'let us invite investors with different technologies and skills to invest in processing minerals'," he said.

In its presentation to parliament last year, the Chamber of Mines informed the government that investors are needed to set up manufacturing plants to further process the minerals to semi-finished products after they leave the mine gate.

The chamber also indicated that two scientific value addition studies have been completed, and that the ball is now in the government's court to enact a mineral beneficiation strategy.

Roman Grynberg, an economics lecturer at the University of Namibia, said the country has great potential to benefit more from its minerals, but stressed that political will is required to realise such potential.

"For it to work will require strategies, and not just policies on paper. Otherwise we let the Asian giants to reap the benefits of our minerals, as it has been," he added.

A study done by the Institute for Public Policy Research (IPPR) in 2017 on mineral beneficiation pointed out that only three minerals benefit from a form of value addition- diamonds, copper - which is refined to blister - and refined zinc.

More than eight other minerals such as gold, iron, lead, dimension stones and others are extracted and shipped out in their raw form. This translated to 80% of the country's mining exports being bulky raw material, the report indicated.

The call for a beneficiation strategy comes at a time when some mines are reaching the end of their lifespan.

Mineral beneficiation, experts argue, could spur on industrialisation as the manufacturing sector would grow, which would in turn employ more people and contribute to solving the country's unemployment problem which currently stands at 33,4%, while youth unemployment stands at 46%, according to the 2018 labour force survey.

"Namibia is exporting its mineral wealth, only to repurchase it once it has been processed. We not only lose out on the monetary value added to our resources, but also lose out on the nominal effect it can play on our economy - in terms of employment, growth in secondary industries, and the multiplier effect," the IPPR report said.

Mining commissioner Erasmus Shivolo told The Namibian yesterday that the strategy is a work in progress.

"You will have one at the end of this year," was all he could say when approached for comment on the matter.

He instead referred the newspaper to policymakers for further information on the topic.

Shivolo nonetheless said the "government has not restricted any investor to set up a factory and add value in the country. All are welcome to approach the ministry of trade with their value-addition proposals".

He also indicated that there are restrictions to value addition for certain minerals, giving an example of uranium, which he said requires a large amount of water, and that other minerals equally require a bulk supply of electricity to be processed - something the country cannot supply at this point in time.

Meanwhile, the 'African Mining Magazine' for February 2019 stated that "not only does Namibia seem to be replete with several minerals that could have some sort of use in the fourth Industrial Revolution, but many exploration geologists regard it as one of the best countries in Africa to look for new deposits."

Namibia

EU Committed to Promoting, Protecting the Rights of LGBTI Community

On the occasion of the International Day against Homophobia, Transphobia and Biphobia, the European Union reiterates its… Read more »

See What Everyone is Watching

Copyright © 2019 The Namibian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.