Mines
Wonder GuchuWindhoek
As Namibia moves to implement a requirement for at least 51% local ownership in all new mining ventures, uncertainty remains over whether this equity will be granted on a free-carry basis or if locals will be expected to pay for their shares.The proposal, announced by industries, mines and energy minister Natangue Ithete this week at the 2025 Windhoek Mining Expo, forms part of broader reforms under the forthcoming Minerals Bill and is currently undergoing stakeholder consultation.
In March 2023, then-mines minister Tom Alweendo raised concerns about the extent of foreign control in Namibia’s mining and petroleum sectors.
Alweendo advocated for the state to hold a free-carried equity stake in such ventures, with the option to purchase additional shares if needed in a manner that maintains investor confidence.
Economic inclusion
The 51% local ownership policy would be formalised through the Minerals Bill and is intended to boost Namibian equity participation in upcoming mining projects.
To date, it has not been confirmed whether this 51% shareholding would be free-carried or acquired through direct investment.
Nonetheless, based on prior official remarks—including those made by Alweendo—it is likely that a portion of the equity would be held free-carried by the state, with the rest acquired through negotiation or payment.
The current Minerals Bill is expected to clarify these details. Until then, it remains uncertain how the 51% requirement would be structured between free-carried and paid equity.
Economist Omo Kakujaha-Matundu said the ideal situation is for Namibia to mine and sell its resources for the benefit of its people, but since the country lacks the capital and expertise.
“The narrative should change. It is better to leave the resources in the soil rather than give them away for a song. Had Namibia negotiated better mining deals in the past, we wouldn’t have begged for a free carry,” Kakujaha-Matundu said.
Tough sell
Almandro Jansen of Simonis Storm said taking a 51% stake, especially on a free-carry basis, is a very tough sell to serious investors.
“Exploration projects can take 7–10 years and cost tens to hundreds of millions of dollars, often with no guarantee of success.
“When a government says, ‘You take all the risk, but we’ll take most of the reward,’ it fundamentally breaks the commercial logic investors operate under.
“Even the best resource plays can be abandoned if the policy environment becomes too unpredictable or unbalanced,” Jansen said.
According to Jansen, increasing local ownership is a valid approach; however, a blanket 51% free-carry model would likely exclude Namibia from global exploration budgets.
He said investors have options to go where the terms are reasonable, where they can protect their capital, and where long-term rules don’t suddenly change.
“If exploration slows down or dries up entirely, the long-term impact won’t just be fewer mining projects; it’ll mean lost jobs, lost royalties, fewer linkages into local supply chains, and ultimately, slower structural transformation,” he said.
He added that many countries have moved toward models where the state participates through carried interest (paid back once the mine generates cash flow), or resource rent taxes that capture windfall profits without diluting investor equity from day one.
Debt-financed entry
Epangelo Mining, which represents the state’s interests in the sector, holds a relatively small stake in operating mines.
Its most notable shareholding is in the Husab Uranium Mine, which is managed by Swakop Uranium and majority-owned by China General Nuclear (CGN).
In November 2012, Epangelo secured a 10% stake in the project through a US$214 million loan, later increased to US$258.9 million.
At the time, the US$214 million was equivalent to approximately N$1.76 billion, and the revised loan value of US$258.9 million translated to around N$2.12 billion. The loan was structured to be repaid over 15 years from future dividends, with interest set at LIBOR plus 6%.
Epangelo’s 10% stake in the Kombat Copper Mine dates back to December 2012, when it was acquired through an equity contribution to Manila Investments, alongside other Namibian investors.
In October 2014, Epangelo acquired a 7.5% stake in the Navachab Gold Mine from QKR Namibia. This purchase, reportedly valued at about N$259 million, was funded by the state.
The company is also discussing the acquisition of a minority interest in the Kokoseb Gold Project, which WIA Gold operates. Reports link Epangelo to a 20% stake in the project via Manila Investments, but there is no official confirmation on whether this was acquired, carried, or earned-in.
In 2012, Epangelo negotiated to purchase a 5% stake—with an option to increase to 10%—in Bannerman Energy’s Etango uranium project. The transaction was never completed.
Epangelo holds an acquired 8% stake in Sakawe Mining Corporation, operating as Samicor Diamonds.
In 2013, Epangelo also acquired a 5% stake in Yellow Dune Uranium Resources, a joint venture with Reptile Uranium Namibia and Deep Yellow.
Continental examples
Zimbabwe’s Indigenisation and Economic Empowerment Act of 2008 required that indigenous citizens hold at least 51% ownership in all sectors, including the mining sector.
Although reforms in 2018 eased this requirement for most sectors, the 51% rule still applies to the diamond and platinum industries.
In the DRC, the revised 2018 Mining Code permits the state or local partners to hold 51% ownership in strategic minerals, along with a mandatory 10% free-carried interest.
Burkina Faso, under its transitional administration, often demands 51% local ownership during negotiations, even though the formal Mining Code only requires a 10% state share and allows up to 25% for local investors.
Tanzania mandates a minimum 16% free-carried state interest in all mining licences and requires that mining service providers be majority locally owned.
South Africa, while not enforcing a 51% rule, imposes a 30% black ownership requirement under its Mining Charter through the Broad-Based Black Economic Empowerment framework.
As Namibia moves to implement a requirement for at least 51% local ownership in all new mining ventures, uncertainty remains over whether this equity will be granted on a free-carry basis or if locals will be expected to pay for their shares.The proposal, announced by industries, mines and energy minister Natangue Ithete this week at the 2025 Windhoek Mining Expo, forms part of broader reforms under the forthcoming Minerals Bill and is currently undergoing stakeholder consultation.
In March 2023, then-mines minister Tom Alweendo raised concerns about the extent of foreign control in Namibia’s mining and petroleum sectors.
Alweendo advocated for the state to hold a free-carried equity stake in such ventures, with the option to purchase additional shares if needed in a manner that maintains investor confidence.
Economic inclusion
The 51% local ownership policy would be formalised through the Minerals Bill and is intended to boost Namibian equity participation in upcoming mining projects.
To date, it has not been confirmed whether this 51% shareholding would be free-carried or acquired through direct investment.
Nonetheless, based on prior official remarks—including those made by Alweendo—it is likely that a portion of the equity would be held free-carried by the state, with the rest acquired through negotiation or payment.
The current Minerals Bill is expected to clarify these details. Until then, it remains uncertain how the 51% requirement would be structured between free-carried and paid equity.
Economist Omo Kakujaha-Matundu said the ideal situation is for Namibia to mine and sell its resources for the benefit of its people, but since the country lacks the capital and expertise.
“The narrative should change. It is better to leave the resources in the soil rather than give them away for a song. Had Namibia negotiated better mining deals in the past, we wouldn’t have begged for a free carry,” Kakujaha-Matundu said.
Tough sell
Almandro Jansen of Simonis Storm said taking a 51% stake, especially on a free-carry basis, is a very tough sell to serious investors.
“Exploration projects can take 7–10 years and cost tens to hundreds of millions of dollars, often with no guarantee of success.
“When a government says, ‘You take all the risk, but we’ll take most of the reward,’ it fundamentally breaks the commercial logic investors operate under.
“Even the best resource plays can be abandoned if the policy environment becomes too unpredictable or unbalanced,” Jansen said.
According to Jansen, increasing local ownership is a valid approach; however, a blanket 51% free-carry model would likely exclude Namibia from global exploration budgets.
He said investors have options to go where the terms are reasonable, where they can protect their capital, and where long-term rules don’t suddenly change.
“If exploration slows down or dries up entirely, the long-term impact won’t just be fewer mining projects; it’ll mean lost jobs, lost royalties, fewer linkages into local supply chains, and ultimately, slower structural transformation,” he said.
He added that many countries have moved toward models where the state participates through carried interest (paid back once the mine generates cash flow), or resource rent taxes that capture windfall profits without diluting investor equity from day one.
Debt-financed entry
Epangelo Mining, which represents the state’s interests in the sector, holds a relatively small stake in operating mines.
Its most notable shareholding is in the Husab Uranium Mine, which is managed by Swakop Uranium and majority-owned by China General Nuclear (CGN).
In November 2012, Epangelo secured a 10% stake in the project through a US$214 million loan, later increased to US$258.9 million.
At the time, the US$214 million was equivalent to approximately N$1.76 billion, and the revised loan value of US$258.9 million translated to around N$2.12 billion. The loan was structured to be repaid over 15 years from future dividends, with interest set at LIBOR plus 6%.
Epangelo’s 10% stake in the Kombat Copper Mine dates back to December 2012, when it was acquired through an equity contribution to Manila Investments, alongside other Namibian investors.
In October 2014, Epangelo acquired a 7.5% stake in the Navachab Gold Mine from QKR Namibia. This purchase, reportedly valued at about N$259 million, was funded by the state.
The company is also discussing the acquisition of a minority interest in the Kokoseb Gold Project, which WIA Gold operates. Reports link Epangelo to a 20% stake in the project via Manila Investments, but there is no official confirmation on whether this was acquired, carried, or earned-in.
In 2012, Epangelo negotiated to purchase a 5% stake—with an option to increase to 10%—in Bannerman Energy’s Etango uranium project. The transaction was never completed.
Epangelo holds an acquired 8% stake in Sakawe Mining Corporation, operating as Samicor Diamonds.
In 2013, Epangelo also acquired a 5% stake in Yellow Dune Uranium Resources, a joint venture with Reptile Uranium Namibia and Deep Yellow.
Continental examples
Zimbabwe’s Indigenisation and Economic Empowerment Act of 2008 required that indigenous citizens hold at least 51% ownership in all sectors, including the mining sector.
Although reforms in 2018 eased this requirement for most sectors, the 51% rule still applies to the diamond and platinum industries.
In the DRC, the revised 2018 Mining Code permits the state or local partners to hold 51% ownership in strategic minerals, along with a mandatory 10% free-carried interest.
Burkina Faso, under its transitional administration, often demands 51% local ownership during negotiations, even though the formal Mining Code only requires a 10% state share and allows up to 25% for local investors.
Tanzania mandates a minimum 16% free-carried state interest in all mining licences and requires that mining service providers be majority locally owned.
South Africa, while not enforcing a 51% rule, imposes a 30% black ownership requirement under its Mining Charter through the Broad-Based Black Economic Empowerment framework.
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