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Mining well-positioned to support domestic recovery

2022-08-31  Edgar Brandt

Mining well-positioned to support domestic recovery

In a post Covid-19 era, the mining sector is faced with difficult economic head wings, which have brought about supply side driven inflation of most commodities, not to mention the sky-rocketing fuel price. However, after years of stagnant growth, there is renewed optimism for the mining sector to rebound as elevated prices for most mineral commodities have boosted exploration activities and revitalised many expansion projects of Namibia’s existing mines. As such, the Ministry of Mines and Energy firmly believes the local mining sector is well-positioned to support Namibia’s much-needed economic recovery due to higher output for diamonds, gold and uranium. This view by the ministry is supported by the strong growth rate for mining in 2021 that was attributed to an increase in the production of diamonds and uranium, and a moderate increase in gold output. 

Responding to queries from New Era, the ministry’s department of Mines said
diamond production during the fourth quarter of 2021 confirmed there will be high growth for the sector in 2022. As such, diamond mining is estimated to grow strongly in 2022 and 2023 as Debmarine Namibia’s new N$7 billion mining vessel (The Benguela Gem) already commenced production during the second quarter of 2022. The ministry however noted that some companies in the mining sector were negatively affected by water supply interruption during the first quarter of 2022 that led to mines reducing their production targets for the year. 

In addition, mines are expected to increase production and take advantage of rising commodities prices. In this regard, the ministry expects some mines on care and maintenance to resume production due to the increase in the commodities prices. In fact, some mines that were placed on care and maintenance are already at an advanced stage to reopen mining operations, with some of these mines in a position to ramp up their production.

“The ministry has observed an increase
in the exploration of lithium, gold and uranium which will translate into revenue for the State when these projects are economically viable. 

The demand for battery minerals has introduced a new focus on these commodities (graphite, lithium, rare earths, etc) with three or four mining operations anticipated to be in production within the next 24 months,” the ministry stated. 

Furthermore, the mines ministry anticipates the mining sector rebound to have a positive impact on State revenue (royalties, levies and taxes) due to price increases in uranium and diamonds.  

The ministry also confirmed that most individuals currently employed by the mining sector are Namibians. During 2021, the country’s mining workforce was comprised of approximately 96%

“The ministry anticipates more employment opportunities due to multiple exploration activities, start of new mines and expansion of existing mining projects. Able employees who were retrenched due to unfavourable conditions as well as graduates in different disciplines stand to benefit from the rebound,” the ministry stated. 

In addition, rising prices for most
mineral commodities have boosted exploration activities and revitalised many expansion projects at Namibia’s existing mines.

According to the Chamber of Mines of Namibia the mining sector is also involved in exploring new frontiers such as using natural resources like gas or solar power to produce (green) hydrogen which has applications in mining operations. 

For instance, using hydrogen fuel cells
to power haul trucks and ammonium
nitrate being a product from ammonia has a wide application as a major component for explosives (ANFO). 

“The Chamber is at the forefront of the discussion around a green hydrogen industry in Namibia and linkages with other sectors of the economy and chairs one of the Private Sector Green Hydrogen Working Groups,” said chamber CEO, Veston Malango. 

According to Malango, even though it has been a grim time for Namibia’s mining
sector, collaborative partnerships demonstrate the industry’s commitment to operate safely to overcome the devastating impact of Covid-19.  

Some concrete examples of Namibia’s post Covid-19 mining recovery are AfriTin securing a finance deal with Standard Bank for expansion of operations and completing a dual listing on Namibia’s Stock Exchange and the Rössing mine, which recorded its best safety performance in the history of the operation. 

Meanwhile, Paladin Energy announced it will restart operations by Q1 of 2024 at its Langer Heinrich mine which was placed on care and maintenance in 2018. Subsequently, the Chamber is confident the industry will continue to explore new frontiers with inventive and innovative solutions that promote growth and resilience. 

2022-08-31  Edgar Brandt

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