Modern Mining May 2019

COMMENT

Namibia’s mining industry shows surprising resilience

E lsewhere in this issue – in an article on the mining scene in Botswana – I mention that Debswana, which owns and operates most of Botswa- na’s diamond mines, is turning 50 this year. Coincidentally, another organisation that is currently marking its 50th birthday is the Chamber of Mines of Namibia, originally founded in May 1969 as the Association for Mining Companies of South West Africa with just a handful of members. Today the Chamber – which adopted its present name in 1990 – has just over 100 members in all classes, although only a small proportion of these, of course, would be producing mining companies. Earlier this month (May), the Chamber spon- sored, as it always does, the annual Mining Expo and Conference in Windhoek and it also released its annual review – the ‘bible’ for any- one interested in Namibian mining – for 2018. According to the review (and somewhat surprisingly, given the weak state of Namibia’s economy at the moment), 2018 was a strong year for the Namibian mining industry. It recorded a growth of 22 % with total turn- over amounting to N$33,54 billion. Royalties paid during the year amounted to N$2,06 bil- lion while the figure for total taxes paid was N$3,98 billion. The industry employed just over 9 000 people on a permanent basis, as well as 498 temporary employees and 6 681 contractors. Total contribution to GDP was 14 % (compared to 11,9 % in 2017). In his foreword to the review, the Chamber’s CEO, Veston Malango, writes: “In terms of its contribution to Gross Domestic Product, min- ing was the strongest performing sector and one of the few to post a positive growth rate, of 22 %, in 2018. This helped to buoy the depressed national economy, which recorded a contraction of 0,1 % according to prelimi- nary figures in the National Accounts. At the forefront of this growth was a boost in uranium output from ramping up activities at Swakop Uranium’s Husab mine, as well as increased output of diamonds, a mineral which is assigned the largest weighting compared to others in the National Accounts.” Swakop Uranium’s production of yellow cake during 2018 totalled 3 571 tonnes, a very significant increase from the 1 345 tonnes recorded in 2017. According to the review, con- struction of the mine was completed during the year and it is now on its way to becoming one of the largest uranium mines in the world. As regards diamonds, Namibia’s output all

comes from Namdeb Diamond Corporation or Debmarine Namibia, which are sister com- panies. During the year, Namdeb produced 571 847 carats, an increase of 34 % on the 2017 figure, while Debmarine produced 1,44 Mct, achieving its target. An interesting feature of the review is that it gives some details of companies and/or mines that one rarely hears from. For example, it has a couple of pages devoted to the Navachab gold mine near Karibib which, until Otjikoto opened several years back, was Namibia’s sole gold producer. Once an AngloGold Ashanti operation but now majority owned by QKR Namibia Mineral Holdings, it produced 1 427 kg (around 46 000 oz) of gold in 2018. A highlight of the year was the successful development of satellite pits to mine small to high-grade ores (with the mining in the hands of an empowered contractor). Similarly, there is a great deal of information on Namib Lead & Zinc Mining (90 %-owned by North River Resources), which is redevel- oping the Namib lead and zinc mine which was previously operational from 1968 to 1991. This project has gone off the radar in the last 18 months or so but the review reveals that the official ground-breaking on site was held in June last year and that all the main site infra- structure was complete by the end of the year. First production of lead and zinc concentrate is expected in the current quarter. Looking ahead, what’s the forecast for mining in Namibia? To answer this question, I can do no better than quote the views of Zebra Kasete, who is MD of Dundee Precious Metals Tsumeb and also President of the Chamber. In his ‘Letter from the President’ in the annual review, he says that Namibia’s national economy is in “dire straits” (his exact words) and officially in a recession. He points out that while mining performed positively during 2018, the longer- term outlook appears less optimistic owing to the fact that a number of prominent mines will be reaching the end of their lives in the next two to ten years. “The primary focus of the Chamber of Mines going forward will thus be on how to boost exploration activity in Namibia and enable the discovery of new mineral deposits which may lead to the opening of new mines,” he states. Readers wanting to get a copy of the review, which runs to about 85 pages, can download it from the Chamber’s website at www.cham- berofmines.org.na . Arthur Tassell

“The primary focus of the Chamber of Mines going forward will thus be on how to boost exploration activity in Namibia and enable the discovery of new mineral deposits which may lead to the opening of new mines.”

May 2019  MODERN MINING  3