OUT of the total sixteen operational mining companies, five are 100% foreign-owned, while the local ownership in the remaining 11 does not exceed 20%, with Namdeb being an exception.
This is despite the fact that over the years, a large majority of the issued mineral exploration licenses have been granted to Namibians.
This was revealed by the minister of mines and energy, Tom Alweendo, during his official opening today of this year’s Namibia Chamber of Mines expo.
“By the end of 2018, more than 60% of all EPLs granted were issued to Namibians. If ever we are going to find a solution to the funding dilemma, there is a need for innovative funding ideas from not only the aspiring entrepreneurs, but also from the government and the foreign investors,” Alweendo stated.
Alweendo further stated that there are calls for government to nationalise mining by making it mandatory for the government to have shareholding in mining companies.
“Again, this call is from those who hold the view that the economic benefit from the mining sector is not being shared equitably. We do not currently believe that government direct ownership in mining companies is the best solution to cure the problem of the lack of local ownership,” Alweendo said.
Alweendo also spoke on the future of mining as an important contributor to the economy, the equitable sharing of economic benefits derived from the mining sector, and the security of supply of electricity in relation to a growing mining sector.
According to the minister, during the year 2018, the mining sector contributed 14% to GDP.
During the same period, the sector employed 16 221 employees directly and 6 681 as contractors. The sector also contributed N$2.1 billion in royalty payment and N$1.7 billion for tax on profit.
In 2018, the total tax on profit collected from the whole private sector was N$ 6.9 billion.
The minister also touched on policy uncertainties within the sector, stating that change in policy and legislation can have debilitating effect on the profitability of any investment, especially those to do with taxation.
“It is, however, unrealistic for investors to expect no change in policy or legislation during the duration of their mining investment as some investment in the mining sector can be as long as 30 years,” Alweendo stated.
Touching on the energy security, Alweendo noted that without sufficient and affordable supply of electricity, the mining sector will not be able to operate optimally.
Of the 4,285 GWh consumed in 2018, 1,424 GWh was consumed by the mining sector.
“This is a significant portion of electricity consumed by the mining sector. Our current generation plan will ensure that by 2022 at least 80% of our electricity consumption must be generated locally. Over the years we were able to attract independent power producers (IPPs) to invest in electricity generation and we will continue to do so,” Alweendo said.