Elevated commodity prices and buoyant global demand continue to support the global and domestic mining activities. To interrogate the anticipated boost in mining industry output, New Era’s Head of Business and Lifestyle Edgar Brandt (EB) sat down for an exclusive interview with CEIO of the Chamber of Mines of Namibia Veston Malango (VM). 

EB: How would you describe the attendance of this year’s Mining Expo and Conference, considering it was the first time the event was conducted virtually?

VM: The attendance of this year’s mining conference far exceeded all of our expectations. The conference attracted 523 total registrants, of which there were 376 in attendance. During the morning sessions, there were on average 200 to 250 people in attendance, while the afternoon sessions were attended by an average of 100 to 150 people at any given point in time. This is far more than we have been able to achieve at a physical event in one sitting. 

Moreover, the conference was hailed a huge success and touted a world-class event, one that was exceptionally well-organised and managed, and also in terms of the relevance, content and quality of the conference programme. On the live stream link, approximately 15 to 20 people were viewing the event externally at any point in time. 

EB: When do you foresee returning to a face-to-face format for the Mining Expo?

VM: Given the devastating aftermath of the third wave the country has just endured, it is hard to say if we will be able return to a physical event in 2022. However, we remain optimistic that the national vaccination drive will achieve the desired immunity levels so that it is safe enough to resume physical events of this nature. The Chamber is thus preparing for a physical Mining Expo & Conference in 2022, with the exact timing and dates still to be confirmed. 

EB: What is the anticipated impact from rising commodity prices on Namibia’s mining industry and its contribution to government coffers?

VM: Overall, rising mineral commodity prices are good for the growth of Namibia’s mining industry and will also increase the revenue to government from the mining sector. 

It is good for the mining industry – firstly from an exploration point of view, as we are witnessing increased investment into exploration expenditure by mining and exploration companies. Increased exploration by existing mines will help to extend their life of mines as has been the case with the Trevali Rosh Pinah mine, and increased exploration on new projects will improve the likelihood of discovering new mines. 

For advanced projects, for example Reptile Uranium’s Tumas project, and Bannerman Resources’ Etango project, an improving uranium price will spur these projects into mine development.  

For existing mines, rising mineral commodity prices will generally result in higher revenues and profits, provided there are no negative offsets, such as escalating input costs or exchange rate fluctuations. Increased revenue from mining operations will result in higher export earnings for the country and improve the overall trade balance, and more revenue to government through larger amounts of royalties and export levies received. 

EB: How would you describe the relationship between the mining sector and the Namibian government?

VM: The relationship between the mining sector and the government resembles that of an open-door policy, through which issues of mutual interest are resolved in open, honest and constructive dialogue. The relationship is characterised by a strong sense of trust and respect, which I am proud to say has been facilitated through the Chamber of Mines over the years. The nature of this relationship often influences the outcomes of engagements on important policy decisions that aim to grow the sector for the benefit of the Namibian economy and its citizens, and contributes to achieving this goal. 

I am regularly consulted by my counter parts from other African Chamber of Mines on how best to build such relationships that result in constructive dialogue between governments and the mining industry, and embed trust and respect. 

EB: Please describe the bond between the mining sector and the Namibian labour force?

VM: Similarly, the relationship between the mining sector and the labour force is characterised by peaceful and constructive interactions that result in mutually beneficial outcomes for both parties. Labour relations in Namibia’s mining sector are not prone to wildcat strikes or constant labour unrest, which can be detrimental to an industry. The Mine Workers Union of Namibia and mining companies share a common understanding, which pave the way for amicable negotiations and mutually beneficial outcomes. The Chamber of Mines actively engages the MUN through the Mining Consultative Forum, a tripartite platform between industry, organised labour and government as represented by the Mining Commissioner and the Labour Commissioner. 

EB: How much do you think the mining sector’s contribution to Namibia’s GDP can be increased if more value is added locally to Namibia’s minerals before being exported?

VM: It is true that mining’s contribution to Namibia’s GDP would be more if ALL of our minerals were exported in refined or pure form. However, we must not forget that we are already adding substantial value to our minerals, and some of them are exported as pure metals or minerals. 

For the most part, minerals are generally not exported in ‘raw’ form, or otherwise known as ore. Most mined commodities are subject to some form of processing before they are shipped out of a country, or sold onto their customers, as the costs of transporting mass or bulk material in the form of ore would not be economic for all operations. Minerals are, thus, processed to produce a form of concentrate for further refining and processing. For example, Namibia produces processed uranium, called yellow cake (U3O8 – Uranium Oxide) for further processing along the uranium value chain. Namibia produces gold bullion (92-98%), which is further refined into refined gold bars (99.9999%) at the Rand Refinery in South Africa.

Namibia used to produce refined minerals such as Special High-Grade Zinc from the Skorpion Zinc Mine, and Copper Cathode from the Tschudi Copper Mine. Copper cathode and Special High-Grade zinc are LME grade at 99.9999% pure metal. These pure metals would then enter the manufacturing sector as feedstock; for example, in copper fabrication plants or the zinc galvanising industry.  Skorpion Zinc was placed on care and maintenance as a result of the depletion of the oxide orebody. 

In other words, the life of mine of the open pit came to an end. The mine was closed earlier than planned due to multiple slope failures and geotechnical instabilities in the main pit, and is assessing options to mine the remaining ore safely. 

Vedanta is also building a viable case to repurpose the plant to process oxides from external operations, and convert the refinery, which would produce Special High-Grade Zinc from zinc sulphides produced by the neighbouring Gamsberg Mine in South Africa as well as locally produced zinc sulphide concentrates from the Trevali Rosh Pinah mine and the Namib Lead and Zinc mine. 

The Tschudi Copper Mine has also recently been placed on care and maintenance due to depletion of the main ore body; however, significant exploration is ongoing to determine whether it is viable to mine the surrounding satellite oxide deposits. 

Finally, blister copper is produced by the smelter at Dundee Precious Metals Tsumeb, which produces 98.5% blister copper. 

The operation is a toll smelter, which processes 100% imported copper concentrates from Bulgaria and Latin America. Thus, the thriving economy of Tsumeb and surrounding areas is based purely on value addition of imported copper concentrates at the Tsumeb smelter. 

Currently, there is no production of copper concentrates in Namibia since mining operations ceased at Otjihase and Matchless mines. However, this situation is expected to change, as preparations are underway to re-open the old Kombat mine. 

Furthermore, mining GDP would greatly be increased by investments in the entire mining value chain. There is need to deepen the upstream linkages by establishing industries that would produce mining inputs and consumables. 

The mining sector is committed to supporting local suppliers of goods and services as demonstrated by the average yearly spend of 40% of total revenue. In 2020, the mining sector spent N$ 12.3 billion goods and services procured locally.

Last, but not the least, there is need for government to attract other investors to set up manufacturing and fabrication plants to further add value to our minerals into semi and finished products. 

EB: To what extent will the database of local producers and service providers, being developed by the mines ministry, enable the mining sector to procure Namibian products and services?

VM: The database is not one of local producers and service providers, but rather captures all mining inputs and services currently procured by the industry. The ultimate goal of this database is to deepen the local mining supply chain as alluded to above. This will be achieved by providing access to information on the procurement needs by the mining industry to local suppliers and entrepreneurs, who can then use this information to identify business opportunities and build a business case on that. 

EB: How has the Chamber and the mining sector been able to overcome obstacles, such as logistics constraints, brought about by the Covid-19 pandemic?

VM: In terms of logistical challenges presented by the pandemic, mining companies were particularly affected by disruptions in the supply of critical inputs and capital goods. In the case of consumables, mining operations re-stocked with larger quantities to ensure a steady supply of inputs to operations directly from the mining site. Some capital expansion projects were delayed towards the end of last year, as equipment could not be delivered on time. 

Exploration activities were also negatively impacted due to local travel restrictions, with many programmes being put on hold till the end of 2020. 

Similarly, critical maintenance operations could not be performed by external service providers as a result of border closures and travel restrictions. However, this presented a unique opportunity for local suppliers and mine personnel, as they were engaged and trained to perform the tasks that would have been carried out by the external service provider. 

EB: How would you characterise the availability of crucial inputs for mining operations, such as electricity, water, skilled employees and a stable economic and political environment in Namibia?

VM: In Namibia, the availability and supply of electricity is generally not a problem, as most mines are connected to the main grid, through which our electricity is predominantly supplied by South Africa, Zambia and Zimbabwe. However, the long-term sustainability and cost implications of this arrangement remains a concern for the industry. Only B2Gold’s Otjikoto mine is not connected to the grid and relies on a hybrid of HFO thermal power plant and a solar plant.

In Namibia, being a dry country, water will remain a concern for the industry generally. However, the affordability, and reliability of water at the coast for uranium mines remains a current challenge. The Chamber is, thus, relieved with government’s plans to invest in a desalination plant, as prioritised in the Harambee Prosperity Plan 2. 

The availability of skilled employees is not a major concern for the industry, as mining companies provide extensive skills development and training to their workforce to develop mine specific expertise and in-house skills. Specialised skills are imported from time-to-time on a short-term basis, for which the Ministry of Home Affairs has greatly assisted the industry with work visas and work permits. Overall, more than 97% of employees in the mining sector are Namibians – and less than 3% are experts on work permits. 

Namibia’s political stability is one of the key elements that makes it an attractive destination for investment into mining – and for supporting economic activity in general. Namibia’s political and judicial system are not at risk of being overthrown, and there is, thus, no real risk to security of tenure or lawlessness.