Lithium: Alweendo defiant amid possible WTO threats
Mines minister Tom Alweendo says Namibia should be allowed to develop its lithium resources locally, despite suggestions that it could be contravening World Trade Organisation (WTO) conventions.
London-based lawyer Peter Leon warned that Namibia was not upholding international trade laws with its recent decision to ban lithium ore exports.
This follows a Cabinet decision taken in June related to the prohibition of the export of certain critical minerals such as unprocessed crushed lithium ore, cobalt, manganese, graphite and rare earth minerals.
Leon cautioned that Namibia was “playing with fire” as this is against the fundamental principles of international trade law.
Alweendo shot back, saying Namibia was not violating any trade rules.
Tiring
“We don’t believe that our decision violates any of the WTO rules. All I can say is that it’s so tiring to be accused of ‘resource nationalisation’ whenever developing countries adopt policies meant to improve the livelihoods of their citizens,” the minister, who has been at war with some of the local mining investors, told Namibian Sun.
The Windhoek High Court last month ruled that controversial Chinese lithium mining company Xinfeng Investments is entitled to retain its mining licence for its open-pit mine outside Omaruru, which Alweendo had revoked.
This amid allegations that the licence (ML 243) was fraudulently acquired, which was the basis of Alweendo’s decision to withdraw it.
Xinfeng - which is considered a leader in the lithium rush in Namibia - had its operations temporarily halted after the minister stopped the exportation of unprocessed lithium ore to China last year.
Challenge
“There’s everything wrong with the idea that Africa must continue to export its raw materials to developed countries, in the process disadvantaging itself,” Alweendo said in reaction to Leon’s warning.
The lawyer further cautioned that countries affected by the ban would challenge it.
“I imagine that the countries affected by the ban, especially those affected by Namibia, may take some steps around it,” he said. He was speaking at the London Indaba, a mining conference, on 26 June.
Namibia’s attempts to encourage beneficiation could have the opposite effect of promoting in-country value addition, he cautioned.
“The WTO allows export and import levies, but is opposed to quantity restrictions as a basic precept of its formation,” Leon said.
‘Breaking every law’
Since raw mineral export bans are often coupled with other laws, promoting in-country processing – so-called ‘beneficiation’ – will end up “breaking every law in the WTO’s book”, he said.
Namibia, as a member of the WTO, had to uphold agreements signed, Leon added.
“Under the WTO agreements, which most countries in the world have signed and ratified, you can impose export duties on products, but quantitative restrictions on imports and exports are generally prohibited, unless you can justify them in the public interest.
“So, that's always the test,” the lawyer said.
London-based lawyer Peter Leon warned that Namibia was not upholding international trade laws with its recent decision to ban lithium ore exports.
This follows a Cabinet decision taken in June related to the prohibition of the export of certain critical minerals such as unprocessed crushed lithium ore, cobalt, manganese, graphite and rare earth minerals.
Leon cautioned that Namibia was “playing with fire” as this is against the fundamental principles of international trade law.
Alweendo shot back, saying Namibia was not violating any trade rules.
Tiring
“We don’t believe that our decision violates any of the WTO rules. All I can say is that it’s so tiring to be accused of ‘resource nationalisation’ whenever developing countries adopt policies meant to improve the livelihoods of their citizens,” the minister, who has been at war with some of the local mining investors, told Namibian Sun.
The Windhoek High Court last month ruled that controversial Chinese lithium mining company Xinfeng Investments is entitled to retain its mining licence for its open-pit mine outside Omaruru, which Alweendo had revoked.
This amid allegations that the licence (ML 243) was fraudulently acquired, which was the basis of Alweendo’s decision to withdraw it.
Xinfeng - which is considered a leader in the lithium rush in Namibia - had its operations temporarily halted after the minister stopped the exportation of unprocessed lithium ore to China last year.
Challenge
“There’s everything wrong with the idea that Africa must continue to export its raw materials to developed countries, in the process disadvantaging itself,” Alweendo said in reaction to Leon’s warning.
The lawyer further cautioned that countries affected by the ban would challenge it.
“I imagine that the countries affected by the ban, especially those affected by Namibia, may take some steps around it,” he said. He was speaking at the London Indaba, a mining conference, on 26 June.
Namibia’s attempts to encourage beneficiation could have the opposite effect of promoting in-country value addition, he cautioned.
“The WTO allows export and import levies, but is opposed to quantity restrictions as a basic precept of its formation,” Leon said.
‘Breaking every law’
Since raw mineral export bans are often coupled with other laws, promoting in-country processing – so-called ‘beneficiation’ – will end up “breaking every law in the WTO’s book”, he said.
Namibia, as a member of the WTO, had to uphold agreements signed, Leon added.
“Under the WTO agreements, which most countries in the world have signed and ratified, you can impose export duties on products, but quantitative restrictions on imports and exports are generally prohibited, unless you can justify them in the public interest.
“So, that's always the test,” the lawyer said.
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