THE Minister of Mines and Energy, Tom Alweendo, said that the ministry has strengthened the application process for mining exploration rights and applicants will now be required to provide a detailed program to prove that they are capable of carrying out the work.
This comes after the Chinese mining company, Xinfeng Investments, allegedly obtained an Exclusive Prospecting License (EPL) inappropriately by paying N$50 million for its acquisition. Alweendo said that these bribery allegations, which are currently being investigated by the Anti-Corruption Commission (ACC), exposed a weakness in the ministry’s application process regarding the evaluation, awarding and declining of exploration rights.
He said that it also highlights an emerging trend where exploration rights are awarded to applicants who have no intention of conducting exploration activities or who end up trading their licenses for huge amounts of money. This, he added, leads to the creation of a parallel market for trading in exploration licenses, thus creating incentives for ministry officials to be bribed to award rights inappropriately.
“To address this challenge, we have strengthened our exploration applications evaluation methodology consistent with the mining legislation. Each applicant will be required to provide us with a detailed exploration program. The exploration program must also be accompanied by a commensurate exploration budget and the details of appropriately skilled personnel that will be carrying out the actual exploration activities,” Alweendo explained.
The minister also addressed the public’s concerns regarding additional illegal activities that Xinfeng Investments is allegedly involved in as well as concerns that the company is not paying the State what it is due.
Alweendo explained that the company was awarded an EPL last year and in August 2022 it was awarded a mining license over the area covered by their EPL. In their application for a mining license, Alweendo revealed, Xinfeng Investments indicated that they have a resource estimation of 8 million tons of ore, with an estimated lithium content of about 1%. He added that the application also indicated that the company intends to construct a processing plant in 2024, before starting with mining operations.
However, Alweendo explained, Xinfeng Investments said that they need to export a certain quantity of crushed lithium ore to their processing plant in China for analysis to determine what kind of plant needed to be built in Namibia. The company therefore also applied for an exporting permit, Alweendo said.
Alweendo revealed that the ministry officials responsible for the administration of export permits unfortunately neglected to come to an agreement with Xinfeng about the total quantity of ore that needed to be exported for testing purposes. As a result, the company was issued with an export permit totalling 135 000 tons of crushed ore, of which 75 000 tons have already been exported.
The minister said that it is clear that the 135 000 tons is not for testing purposes and the only fair conclusion to make is that the company is, in fact, exporting the crushed ore to make income for its operations.
“It is to be recalled that on 20 October 2022, I called a press conference to address the public on this matter. At the time, we received information that suggested that the company was exporting more quantity than what they were permitted to export. The company was then ordered to stop the export forthwith,” he said.
However, Alweendo continued, it was later confirmed that Xinfeng was within the quantity permitted by the export permits issued by the Mining Commissioner. Alweendo revealed that the company already paid N$2 million in royalties for the 75 000 tons exported and it has been agreed that the remainder of what still needs to be exported based on the issued permits, must be exported by 29 November 2022.