Mining in Namibia

Mining is the biggest contributor to Namibia's economy in terms of revenue. It accounts for 25% of the country's income.[1] Its contribution to the gross domestic product (10.4% in 2009, 8.5% in 2010, 9.5% in 2011, 12.3% in 2012, 13.2% in 2013, 11.6% in 2014) is also very important and makes it one of the largest economic sectors of the country.[2] Namibia produces diamonds, uranium, copper, magnesium, zinc, silver, gold, lead, semi-precious stones and industrial minerals.[3] The majority of revenue (7.2% of GDP in 2011) comes from diamond mining.[4][5] In 2014, Namibia was the fourth-largest exporter of non-fuel minerals in Africa.[3]

Aerial view of Navachab gold mine
21°59′01″S 015°46′00″E

Overview

Namibia has a long tradition of mining. In 2018, mining contributed 14% of GDP and expanded 28%.[6] Extensive exploration in Namibia for base metals, diamonds, gold, natural gas, and uranium has been attributed, in part, to the rise in world commodity prices.[7] Under the Mining Act, the natural resources of Namibia belong to the State. However, the state in Namibia is limited to the role of a grantor-regulator than an owner-operator.[8] One of the main challenges of the mining industry is the lack of water resources, as the availability of fuel and electric power.[7]

A mining policy in Namibia was developed in 2003 through research with the information made available by key stakeholders.[9]

Production

World Bank pointed out that mining in Namibia grew an average of 4.6% over the 2000-2012 period. The growth of the mining sector is influenced by the global economy and demand, in contrast to the agricultural industry in Namibia, which is influenced by environmental conditions.[3]

In 2019, the mining industry contributed over 300 million dollars to government revenue. The whole industry contributed around 2.2 billion dollars to the national economy in the same period. However, a drop in diamond and uranium production caused a contraction of 11,1%. Lower mineral commodity prices led to the declining expenditure on exploration.[8]

In 2006, manganese, diamond, and fluorspar output increased by 158%, 24%, and 15%, respectively, compared with that of 2005, and copper, lead, wollastonite, and zinc posted significant production declines.

The increase in manganese was attributable to the expansion of production at the reopened Purity Mine (formerly the Otjisondu Mine). The decline in copper output could be attributed in part to instability during the transition of ownership of Ongopolo Mining and Processing Ltd. Lead and zinc output declined in part because of a short strike by workers at the Rosh Pinah mine.[7]

Employment

In 2019, the mining industry paid over 300 million dollars in wages and salaries and provided 16 324 direct jobs with 9 027 permanent employees. Temporary jobs figured out 800, while 6 515 were contractor jobs.[8]

In February 2020, mining operations were suspended at Tschudi because the oxide ore body was depleted, provocating the loss of 66 direct contractor jobs. For the same cause, mining operations ceased at Skorpion Zinc, and the mine closed due to safety concerns. Around 1 500 jobs were lost.[8]

Depending on economic up and downswings, mining provided for around 6,000 to 8,000 direct jobs between 2007 and 2014.[5] The artisans for the industry are educated in the Namibian Institute of Mining and Technology (NIMT) in Arandis, Keetmanshoop, and Tsumeb, as well as at University of Namibia (UNAM)'s Faculty of Engineering and Information Technology in Ongwediva.[4] Namibia University of Science and Technology (NUST)'s Faculty of Engineering in Windhoek also provides mining education.

Structure of the mineral industry

The Government encourages private sector exploration and development according to guidelines set out in its 2003 paper entitled "The Mineral Policy of Namibia". The Ministry of Mines and Energy and its Diamond Affairs, Energy, and Mining Directorates regulate Namibia’s mining and petroleum industries, and the Ministry concerns itself with the provision of national exploration and mining databases and competitive exploration and mining policy and regulations. The Ministry of Trade and Industry is responsible for regulating manufacturing activity, which includes mineral beneficiation, the production of cement, and the processing of semiprecious stones; the Ministry also promotes resource-based development.[7]

Epangelo Mining is a mining company owned by the government. It was founded in 2009 with the aim to govern the rights on six mineral resources that are deemed strategic for Namibia, and for which new exploration rights must be held by government. The six resources are: diamonds, gold, coal, uranium, copper, and rare earth minerals.[5]

The larger mining operations in Namibia tended to be funded and operated by domestic and international investors. Numerous local operations were involved in smaller-scale industrial mineral production, especially the semiprecious gemstone sector.[7]

Commodities

Copper
Haib copper prospect, Namibia. The adit is in the centre of the photo.

In 2006, Weatherly International plc of the United Kingdom agreed to acquire 56% interest in financially distressed Ongopolo; Weatherly subsequently increased its equity interest in the company to 100%. Ongopolo operated the Kombat, the Matchless, and the Otjihase Mines. Ongopolo suspended operations at the Tsumeb copper smelter in mid-2006, relined the 30,000-metric-ton-per-year (t/yr)-capacity reverberatory furnace, and reopened the smelter in August. A second reverberatory furnace at Tsumeb remained inactive, pending renovation.[7]

Ongopolo evaluated the development of an underground mine at the Tschudi copper-silver prospect. Other copper exploration activity in Namibia included that of Copper Resources Corp. of South Africa on the Haib project, Helio Resource Corp. of Canada on the Honib prospect, Teck Cominco Ltd. of Canada on the Kaoko project, and Yale Resources Ltd. of Canada on the Leicester prospect.[7]

Companies that explored for gold in 2006 included Forsys Metals Corp. of Canada on the Ondundu prospect, Teal Exploration & Mining Inc. of Canada on the Otjikoto prospect, and Teck Cominco on the Vredelus prospect. Yale Resources worked on the Makuru (also known as the Otjimakuru) project.[7] As of 2010, the only operational gold mine in Namibia is the Navachab Gold Mine.[10] Now new company called Auryx Gold Namibia was formed and exploring the Otjikoto Gold deposit

Lead and zinc

Contributing to the decline in Namibian zinc output in 2006 was the nearly 3-week fire-related suspension of zinc metal production operations at the Skorpion zinc facility and a strike at the Rosh Pinah Mine for higher wages, which lasted for about 2 weeks and adversely affected lead and zinc concentrate production. Kumba Resources Ltd. of South Africa proposed to reduce its 89.5% equity interest in Rosh Pinah to about 50%. A local investor group, which included PE Minerals (Namibia) (Pty.) Ltd., was expected to acquire Kumba’s divested interest.[7]

Cement

Cement had been imported since the closure of the Otjiwarongo factory of African Portland Cement several years ago. Holcim (Namibia) (Pty.) Ltd., which was owned by Holcim S.A. of Switzerland, 54%, and the Aveng Group of South Africa, 46% (and known as Alpha Cement prior to 2004), imported about 25,000 metric tons per month of cement to meet local demand.[7] In 2005, Cheetah Cement Factory, which was a joint venture of Whale Rock Cement of Namibia and CP Cimento e Participacoes S.A. of Brazil, proposed to import cement from Brazil until a 500,000-t/yr-capacity cement plant near Otjiwarongo was built. In late 2005, Cheetah Cement imported 36,000 metric tons of cement from Brazil.[7]

Ohorongo Cement near Otavi started production in 2010. Cheetah Cement also got a factory in 2018, so that there is now an oversupply of cement to the Namibian market.[11]

Diamond
Diamond restricded aere

Diamond remained the most economically significant mineral commodity produced by the mining industry of Namibia. The country produced about 2% of the world’s gem-quality diamonds, which placed it as the eighth-ranked producer of gem diamond in terms of value.[7] Diamonds contributed N$2,5 billion (US$235 million) in revenue to the government in 2013.[12]

In 2020, the Bank of Namibia forecasted a record decline of 24.6% in real terms due to a lower demand caused by COVID-19 outbreak.[13] The president of the Chamber of Mines of Namibia Zebra Kasete said the decline in demand dampened the flow in the diamond pipeline.[14]

Namdeb Diamond Corp. (Pty.) Ltd., which was a joint venture between De Beers Centenary AG and the Namibian Government, with each having 50%, was the country’s leading diamond producer. During 2006, Namdeb, its contractors, and its subsidiaries produced more than 2,000,000 carats (400 kg). The partners also negotiated the Namdeb Sales Agreement in 2006, which created the Namibia Diamond Trading Co., to sort and value the volume of Namdeb’s production that would be marketed to the domestic diamond-cutting industry.[7]

Petroleum

Offshore petroleum activity included exploration on Block 1711 by the joint venture of Z.A.O. Sintezneftegas of Russia (70%), Petroleum, Oil & Gas Corp. of South Africa (PetroSA) (10%), EnerGulf Resources Inc. of the United States (10%), and the National Petroleum Corporation of Namibia (NAMCOR) (7%). Onshore exploration included that of the joint venture of Circle Oil Namibia Ltd. (90%) and NAMCOR (10%). In 2006, Mitusi Atlantic Energy BV (15%) joined the joint venture of BHP Billiton Ltd. of Australia (75%) and PetroSA (10%), which held Blocks 2813A, 2814B, and 2914.[7]

Uranium
Main article: Uranium mining in Namibia
Aerial view of Husab Uranium Mine
Granite mining near Walvis Bay

Namibia, was the sixth ranked producer of uranium, producing about 8% of the world’s uranium in 2006.[7] Due to the opening of the Langer Heinrich Uranium (LHU) mine in 2007, the country in 2009 had raised its share to nearly 10%,[15] but when Uranium prices fell after the Fukushima incident production was reduced. In 2012, Namibia produced 7.1% of Uranium oxide, behind Kazakhstan, Canada, Australia, and Niger.[16]

Rössing Uranium Ltd. processed about 12 million metric tons of ore in 2006 and produced 3,617 t of U3O8. Production was exported to the Asia and the Pacific, the European, and the North American markets by Rio Tinto Uranium; Rössing shareholders had no offtake rights.[7]

Earlier this decade, Rössing had announced that the Rössing Mine would be closed in 2009. By 2005, the increase in the world market price of uranium allowed Rössing to plan to extend operations to 2016. In 2006, positive exploration results and continued favorable uranium market conditions allowed Rössing to propose that the mine’s life could be extended to 2021.[7]

In late 2006, Paladin Resources Ltd. commissioned the Langer Heinrich uranium (LHU) mine and oxide (U3O8, or yellowcake) plant.[7] LHU produced 1 170 tonnes of processed uranium called yellow cake in 2009.[15]

Exploration activity and evaluation of uranium mineralization in Namibia in 2006 included that of Bannerman Resources Ltd. of Australia on the Goanikontes and Swakop River prospects, Extract Resources Ltd. of Australia on the Husab Uranium Project, Forsys Metals on the Valencia project, Metals Australia Ltd. of Australia (formerly Australian United Gold Ltd.) on the Engo Valley and Mile 72 projects, Rössing Uranium on the SH and SK anomalies on Rössing’s mining lease near Arandis, UranMin Inc. on the Trekkopje deposit, and Western Australian Metals Ltd. of Australia on the Marinica project. In early 2006, Xemplar Energy Corp. of Canada acquired Namura Minerals Resources (Pty.) Ltd., which held the Aus, the Cape Cross, and the Warmbad uranium projects. Namura subsequently acquired a reconnaissance license in the Engo Valley area.[7]

Marble

Marble is mined near Karibib.[17]

Granite

Granite is mined in Walvis Bay.

Iron

Lodestone’s Dordabis iron mine is a small mine producing 4,000 tons of iron ore in 2015. It is Namibia’s first iron mine and also produces magnetite and hematite products. Ohorongo uses the magnetite of this mine for cement manufacturing.[18]

Mining towns
Uranium mining town Arandis

Several towns and settlements in Namibia were established solely for mining. Some of them are today ghost towns, and some are in danger of becoming one due to a lack of diversification of economic activities. The major mining towns in Namibia are:

Marble mining in Karibib
  • Karibib is close to the Navachab Gold Mine, by far the largest employer in town. It is also strategically situated for road and rail transport; 1,000 trucks pass the town per day.[20] Marble is also mined near Karibib.
  • Otjiwarongo services the B2Gold mine which is the largest employer in the Otjozondjupa region. There is also the Okorusu fluorspar mine 48 kilometres (30 mi) north of the town. Mining overall constitutes 20% of the town's economy.[20]
  • Oranjemund was established in 1928 when rich alluvial diamond deposits were discovered north of the Orange River. Industrial diamond mining started in 1935 by the diamond mining company Consolidated Diamond Mines (today Namdeb). Houses for workers were erected in 1936. Oranjemund was privately owned, run and subsidised by the mining company and had no political leadership. The first mayor was elected in 2015 after the settlement was handed over to the Government of Namibia and declared a town in 2011.[21] The entire area along the shore of the Atlantic Ocean had been proclaimed restricted (the Sperrgebiet) in 1908 due to the occurrence of alluvial diamonds. Since then the public was forbidden to enter it, and Oranjemund itself was accessible only for mine workers and their families. Entrance to town required an invitation from within, and crossing the border from South Africa required prior application. Only in 2017 was the town opened to the general public.[22]
Aerial view of Rosh Pinah Zinc mine and town
  • Rosh Pinah is home to, and entirely dependent on, two mines, both mainly extracting zinc and lead. The Rosh Pinah mine was established in 1969 and has since then been in continuous operation.[23] Skorpion Zinc opened in 2001[24] and is the eighth-largest zinc mine in the world. It employs 1,900 people.[20]
  • Tsumeb is situated directly on a large mineralised pipe which was mined since prehistoric times. The town was founded as a mining and smelting town and until today runs an annual Copper Festival. The Tsumeb mine operated from 1907 to 1996, extracting copper, lead, zinc, gold, germanium and cadmium.[25]
  • Uis was established in 1958 as workers' settlement to exploit local tin deposits. Mining started in 1960 and grew to be the world's largest open cast tin mine. Yield was very low, and the mine was sustainable only because South Africa was economically isolated due to its apartheid politics. When sanctions were lifted in 1990, the Uis mine was no longer viable. In the 2010s investments and work started again at the old mine.[20]

Notable mines
Skorpion Zinc mine

Related to the mining industry, the main legislation is the Minerals (Prospecting and Mining) Act 33 of 1992 (Minerals Act). In the terms of this act, owners of the land don't have mining rights because natural resources belong to the state. For getting the right prospect or mine an area, a mining license or a mining claim is required, provided by the Minister of Mines and Energy of Namibia.[26]

Namibia’s mining industry is regulated by the Diamond Act, 1999; the Minerals (Prospecting and Mining) Act, 1992; and the Minerals Development Fund of Namibia Act of 1996. The petroleum sector is governed by the Petroleum (Exploration and Production) Act, 1991; the Petroleum (Taxation) Act, 1991; the Petroleum (Exploration and Production) Amendment Act, 1993; the Petroleum Laws Amendment Act, 1998; the Model Petroleum Agreement, 1998; and the Petroleum Products and Energy Amendment Act, 2000.[7]

In 2006, the Government confirmed a royalty schedule that originally had been introduced in 2004. A 3% royalty was levied on the market value of base, precious, and rare metals and nonnuclear mineral fuels. A 2% royalty was levied on industrial minerals and nuclear mineral fuels.[7]

In Namibia, mining legislation is under revision. According to the Intergovernmental Forum on Mining, Minerals, Metals, and Sustainable Development (IGF), Namibia counts with a strong regulation around the development of environmental impact assessments and environmental management plans through the Environmental Management Act. However, legislation on occupational health and safety, and water and waste management is outdated.[27]

Environmental Management Act 7 of 2007 promotes the sustainable management of the environment and the use of natural resources. This act gives the Minister of Environment and Tourism the authority to regulate activities that could damage the environment. Activities of mining and exploration require a certificate of an environmental commissioner.[26]

Labour legislation for mining consists of Labour Act 11 of 2007 and Labour Act of 1992. The Labour Act, 2007 requires a safe working environment, and without risk to the health of employees; safe plants, machinery, and systems of work; and safe use, handling, storage, and transportation of articles or substances. Labour Act, 1992 relates to the health and safety of workspace. It sets requirements for medical surveillance, first-aid and emergency arrangements, and safety of machinery, welfare, and facilities in the workplace.[26]

References
  1. "Mining in Namibia.doc" (PDF). NIED. Archived from the original (PDF) on 2011-05-10. Retrieved 2010-06-26.
  2. "Background Note:Namibia". US Department of State. 26 October 2010.
  3. KPMG (2014). Namibia. Country Mining Guide. KPMG INTERNATIONAL. p.3
  4. Duddy, Jo-Maré (27 November 2012). "Mining remains gem of economy". The Namibian. Archived from the original on 11 January 2013.
  5. Kufa, Leon (April 2016). "Boom and Slump. The Mining Industry Has Seen it All". Mining Journal. Supplement to The Namibian. pp. 9–11.
  6. Mitchell, Jason (13 June 2019). "Namibian mining industry opposes tax reforms". www.fdiintelligence.com. Retrieved 2020-11-15.
  7. Philip M. Mobbs. "The Mineral Industry of Namibia". 2006 Minerals Yearbook. U.S. Geological Survey (April 2008). This article incorporates text from this U.S. government source, which is in the public domain.
  8. Stevens, Laurence M. (2020-08-18). "Low demand for diamonds persists". African Mining Market. Retrieved 2020-11-15.
  9. Mtegha, H. D.; Cawood, F. T.; Minnitt, R. C. A. (October 2010). "A comparison of the processes used during the development of the national mineral policies of Tanzania and Namibia". Journal of the Southern African Institute of Mining and Metallurgy. 110 (10): 611–620.
  10. Country report: Namibia AngloGold Ashanti website, accessed: 8 August 2010
  11. "Schwenk Zement to exit Namibia". International Cement Review. 15 March 2019.
  12. "Diamonds earned N$2,5 billion in 2013". The Namibian. 28 Mar 2014. Retrieved 2014-04-02.
  13. Nyaungwa, Mathew (25 August 2020). "Namibia diamond mining to recover in 2021 – central bank". www.rough-polished.com. Retrieved 2020-11-15.
  14. "Low demand for diamonds persists". African Mining Market. 2020-08-18. Retrieved 2020-11-15.
  15. Weidlich, Brigitte (7 January 2011). "Uranium: Saving or sinking Namibia?". The Namibian. Archived from the original on 13 January 2011.
  16. Kaira, Chamwe (11 June 2013). "Rössing steers another storm". The Namibian. pp. 10–11. Some of the factual statements are only available in the offline version of this article.
  17. Karibib Marble
  18. Ian (2016-07-26). "Iron ore mine to produce up to 2035". Namibian Mining News. Retrieved 2020-11-30.
  19. Hartman, Adam (8 November 2011). "Investment confrence [sic] promotes Arandis". The Namibian. p. 1. Archived from the original on 6 June 2012.
  20. Hartman, Adam (May 2019). "Evolution of Namibia's mining towns". Mining Journal supplement to The Namibian. pp. 26–33.
  21. Cloete, Luqman (3 August 2011). "Oranjemund proclaimed as town after long battle". The Namibian. p. 1.
  22. Weidlich, Brigitte (20 October 2017). "Oranjemund opens its doors to the world". Gondwana Collection Namibia.
  23. "Rosh Pinah mine". Trevali Mining Corporation. Retrieved 11 May 2019.
  24. "Glencore buys 80% of Rosh Pinah". The Namibian. Mining Weekly. 16 December 2011.
  25. Tsumeb Mine (Tsumcorp Mine), Tsumeb, Oshikoto Region, Namibia, mindat.com, 5 June 2019.
  26. Stritter, Axel. "Mining 2020 - Namibia | Global Practice Guides | Chambers and Partners". practiceguides.chambers.com. Retrieved 2020-11-15.
  27. Intergovernmental Forum on Mining, Minerals, Metals, and Sustainable Development (2018). IGF MINING POLICY FRAMEWORK ASSESSMENT. Namibia. International Institute for Sustainable Development.
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