Epangelo Concerns Mining Industry

THE Chamber of Mines of Namibia is concerned about the government’s policy on strategic minerals that was announced three years ago.

Chamber president, Werner Duvenhage said in the 2013 Annual Review that was released in Windhoek this week that the uncertainty has continued with regards to the policy on strategic minerals, since no legislation has been passed for its implementation.

He said while the Chamber is not opposed to government participation in the mining sector, it remains concerned at the prospect of the state-owned mining company (Epangelo) owning all strategic mineral deposits that are yet to be discovered.

“We believe this will not lead to government’s desired outcome, but will instead result in stagnation of exploration activities as funding by publicly-listed exploration companies will be highly challenging under the envisaged joint venture partnerships with the state owned mining company” he said.

Duvenhage said contrary to some public perceptions, the Chamber welcomed the setting up of Epangelo.

“The sustainability of the mining industry depends on vibrant exploration activities, without which the future of our mining industry will be in jeopardy,” he said.

The Chamber has welcomed the announcement by the Minister of Finance early this year that the withholding tax rate will be reduced from 25% to 15%. Another contentious issue, is the export levy rates that have been finalised by the ministry but not yet made public.

“It is now common understanding that the main rationale for the export levy is to increase government revenue as the introduction of this levy will not result in any capital investments into further value addition activities by mining companies. This tax will add pressure to the cost of production. Widening the tax base without hurting the existing players is only possible through new Foreign Direct Investments as is the case now with the development of new mines. This is indeed growing the cake,” Davenhage said.

He said the Namibian mining sector is experiencing a time of excitement, growth, contraction, turbulence and opportunity. With the development of three new non-diamond mines it is spreading the mining contribution burden to other commodities from the heavy reliance on diamonds and in a lesser degree, uranium, in the past, he said. The three mines currently under construction are from three different commodities: uranium, gold and copper.

Statistics in the Review showed that in 2013, the industry provided 7 582 permanent jobs out of which 353 were for expatriates.

The Chamber said the focus is to bring Namibians into senior management positions and also address gender issues that arise.

The Chamber said although the mining industry alone does not employ a vastly large number of individuals as compared to other primary industries, benefits from the mining sector permeates through other sectors with further jobs created in secondary industries.

The non-diamond mining was the larger contributor to revenue and foreign exchange earnings in 2013. The figure for non-diamond mining includes revenue from zinc refining and copper smelting. Total revenue by non-diamond mining was N$11,89 billion and diamond mining earned N$9,04 billion.

Source : The Namibian