Mining industry organisation Namibia Chamber of Mines (NCM) states that it is “very positive” on the trajectory of the local mining industry, stressing that it expects it to grow on the back of increased output from the diamonds and uranium sectors.

“In the short term, growth in the mining sector remains promising. Primarily because of the improving minerals commodity market supporting increased capital inflows into exploration activity worldwide. Namibia, being a politically stable jurisdiction with a relatively favourable policy environment, remains a competitive destination for investment into exploration activity, which is evidenced by increased investments into exploration over the last few years.”

The NCM cites various promising projects, including base metals producer Andrada Mining’s Uis tin mine, which is in the process of expanding its operation to increase its production to 5 000 t/y. The miner is also investigating the possibility of incorporating lithium and tantalum recovery into its operations.

Canada-headquartered Northern Graphite is restarting the Okanjande graphite mine just outside Otjiwarongo, adds the NCM. The graphite producer’s website points out that the mine and the Okorusu processing plant are expected to become operational during the first half of 2023. The operation is expected to produce 31 000 t/y.

Northern Graphite invested $15.1-million into the operation, installing a new two-stage grinding circuit and additional regrind equipment, and building a new tailings storage facility. It intends to eventually build a new processing facility at the mine, which will be capable of producing up to 150 000 t/y to meet growing battery and electric vehicle demand.

“The prominent uranium projects are Bannerman Energy’s Etango-8 project and Reptile Uranium’s Tumas project. Bannerman recently completed the feasibility study (FS), and Reptile Uranium is progressing its own FS. Both projects have thus far demonstrated positive economics with strong shareholder backing. Ultimately, their development is dependent on the favourable recovery of the uranium price,” says the NCM.

It also highlights Osino Resources, which it describes as “quickly moving towards the development of Namibia’s next gold mine”, having recently completed a prefeasibility study for the Twin Hills project. “The company is aiming to fast-track mine development in the next two years.”

Existing mines have also injected major capital into either expanding their operations or extending mine life, as seen with Debmarine’s impressive NAD7-billion Benguela Gem vessel, B2Gold’s underground Wolfshag project, the Rosh Pinah Zinc expansion project and Navachab gold project.

Moreover, “positive developments” at Nambia’s Ministry of Mines and Energy have renewed hopes that the Minerals Bill review – a process that has been ongoing for the last 20 years – will conclude this year.

However, the major legislative breakthrough for exploration companies in Namibia is the new VAT Amendment Act, which came into effect on January 1, 2023. The chamber points out that it successfully engaged with the Ministry of Finance, over a two-year period, to convince it to amend the VAT Act of 2000.

“The new legislation has addressed key challenges for exploration companies in that they will now be able to register for VAT unhindered and claim for input VAT refunds. “This is positive news for the new year and a major boost to Namibia’s status as a favourable investment destination for exploration and mining.”

An ongoing challenge that cannot be easily addressed is ensuring steady and reliable water supply to mines and communities.

“There are challenges with the water supply, especially at the coast, and current supply is not sufficient to meet the future demand of potential new uranium mines.

“Many of these projects are at advanced feasibility stage and require reliable water supply to ensure that they progress to the bankability stage and are attractive to investors – especially with uranium markets rebounding.”

The chamber notes that government has initiated plans to construct a second desalination plant through a private-public partnership arrangement, however, public confirmation of a finalised agreement has yet to materialise.

Broader African Outlook

The chamber notes that there are “considerable risks” to African economies stemming from the threat of a looming recession, including tightening monetary policy and increasing input costs and inflation.

“For mining companies, increased input and logistical costs present a major risk to expected profitability, despite positive long-term projections for mineral commodity prices. For projects in the advanced development stages, increasing input costs can negatively impact the overall economics and hinder their progress to bankable status.”

Nevertheless, many countries are looking to Africa to secure a reliable supply of the critical metals needed to support the evolving energy sector.

“While this may be beneficial for African countries as exporters, it is becoming increasingly important for them to establish favourable terms so as to ensure that their mineral resources are developed in a manner that can support the sustainable development of their own economies.”

The chamber avers that Africa must seek to ensure that the critical minerals are beneficiated to produce concentrates and metals that could become feedstock into fabrication or manufacturing value chains for intermediary products.

It suggests that, by deepening direct linkages between mining and the rest of their economies, African countries could “optimise benefits from critical minerals in line with the African Mining Vision”.

African countries could also look to support supply chain resilience by establishing agreements with the major importing countries that will promote a long-term view and development of critical mineral resources.

The chamber advises that African countries could leverage these agreements to secure investments into manufacturing, ensuring “win-win outcomes”.

The chamber, which will be sending representatives to the Investing in African Mining Indaba, notes that its main goal at the event is, as always, to market Namibia as a destination that is “open and conducive for investment into exploration and mining” and to showcase opportunities in Namibia’s mining sector.

“We hope that our participation at the Indaba will generate greater interest in Namibia’s mining sector and result in increased investment into mining in the country,” the chamber concludes.