Namibia’s mining industry has produced a 13 percent bumper turnover between 2006 and 2007, but the industry’s future looks bleak due to looming energy shortages in the country and the rest of southern Africa.
This was revealed in the latest review by the Chamber of Mines of Namibia (COM) released late last week. The year 2006 in particular was exceptional, as mining generated a record N$5.5 billion in revenue, from which a 12 percent contribution was made toward the country’s GDP.
Although 2006 was generally considered a good year for the mining industry, further progress was made in 2007 with a generated N$13.8 billion turnover compared to the N$12.2 billion in 2006. In 2007, corporate and royalty tax paid by the mining industry totalled N$1.4 billion compared to N$1.3 billion in 2006 representing an increase of five percent.
Permanent employment in the mining sector increased by 3 percent over the two years, climbing from 7, 691 in 2006 to 7, 901 in 2007. The industry benefited magnificently from the increases of mineral prices in the global market and the conducive environment in Namibia. Consequently, exploration expenditure reached N$482 million in 2006, making it the highest in post-independent Namibia.
Despite such landmark increases in the past two years, uncertainties lay ahead for the industry’s future productivity due to threats of power shortages, among other challenges. As the country turns its attention to uranium due to depleting diamonds ores, the output of the mining industry will remain uncertain until a solution to current power shortages is found.
Chamber of Mines President Otto Shikongo said that even if the Namibian economy is projected to grow by 4.7 in 2008, the unavailability of power might affect such projections. “…A shortage or unavailability of power for the mining industry will translate directly into pressure on the Namibian economic growth,” Shikongo said. It was revealed that increased uranium production will steer the growth of the mining sector.
A new uranium mine, Langer Heinrich Uranium has been commissioned to produce 1 180 tones of uranium oxide a year as of 2011. About 132 employees will have permanent positions. The availability of water for mines remains a challenge, especially in the Erongo Region where the uranium deposits are found.
Shikongo has asked the national water utility, Namwater, to speed up its envisaged construction of a desalination plant at Swakopmund in order to assist the mining industry. Namwater signed an agreement with UraMin mining company in November last year to construct an N$1.67 desalination plant at the coast. “Namwater must take leadership and provide all the necessary support it can in the planning and execution of this strategic project,” Shikongo said.