Mining Sector Not Responsible for Value Addition – Katali

THE mining sector in Namibia is not responsible for value addition of minerals extracted in the country mining companies have to provide the raw materials for this purpose, said Mines and Energy Minister Isak Katali.

“Who is responsible for value addition? Is it the mining sector? The answer is ‘no’ – it is the Ministry of Trade and Industry and the mining sector must provide the raw materials,” Minister Katali said during a questions and answer session at the annual mining conference in Windhoek last week.

Towards the end of last year, a joint value addition committee (JVAC) was put in place with members from the public and the private sector. The Chamber of Mines in a submission to the Ministry of Trade and Industry (MTI) proposed it. In the fourth National Development Plan (NDP4) – which runs from 2012 to 2017 – the establishment of such a committee is mentioned.

The permanent secretary at the Ministry of Mines and Energy, Kahijoro Kahuure chairs the JVAC.

Scandinavian experts were contracted to conduct a study to what extent local value addition or beneficiation is possible for each mineral mined in Namibia.

Kahuure told the mining conference last week that a first draft study was completed, which he had received a day before the conference. “Government will be briefed on the draft and it will then be forwarded to stakeholders for discussions,” Kahuure said. “The aim is to draft a value-addition strategy.”

Some three years ago, Minister of Finance, Saara Kuugongelwa-Amadhila announced that Government would put in place an export levy for raw materials taken out of Namibia in raw, unprocessed form. Apart from more revenue for State coffers, local value addition was to be stimulated.

The private sector has since been waiting for information on which raw materials the export levy will be imposed and how high it would be. No bill was tabled in parliament yet.

During budget analysis meetings earlier this year, the finance minister indicated the export levy would range between zero and 2% of the exported value on unprocessed minerals, fish, game, crude oil or gas and certain other products yet to be determined.

The mining sector contributed 9,3% (2012: 10,8%) to Namibia’s economy in 2013, according to the latest annual report of the Chamber of Mines. The slight decline is a result of depressed global commodity prices, the report stated. Royalties paid by Namibia’s mining sector came to N$1,12 billion last year, up from N$959,7 million in 2012. Taxes paid on profits were N$1,64 billion (2012: N$1,12 billion). A total of N$3,26 billion in taxes and dividends were paid last year (2012: N$ 2,69 billion). Chamber of Mines president Werner Duvenhage emphasised that three new mines were under construction in Namibia – the Tschudi copper mine near Tsumeb, the B2 Gold mine close to Otavi and the huge Husab uranium mine. Representatives from these companies updated the conference on progress made which is well on track and within set time frames.

Hans Nolte, General Manager of Dundee Precious Metals gave an overview of progress made with the N$2,3 billion acid plant construction at Tsumeb. “The 350 000 tonne sulphuric acid plant will be commissioned in the fourth quarter of 2014. It will supply sulphuric acid to Roumlssing Uranium and to Weatherly,” Nolte said.

Two state utilities, NamWater and NamPower assured delegates that sufficient water and electricity supplies would fuel the mining industry.

Brigitte Weidlich is a freelance journalist.

Source : The Namibian