100k rely on mining

Bulk of employees are contractors

10 May 2019 | Business

While the mining sector was one of the few sectors to record positive growth in 2018, the industry suffered more than 800 retrenchments last year.

Still the sector not only directly employs more than 16 000, but indirectly supports more than 100 000 jobs.

According to report by Chamber of Mines of Namibia president Zebra Kasete, presented at the organisation's annual general meeting, the industry directly employed 16 221 individuals last year, compared to the direct employment of 16 973 individuals in 2017.

In 2018 direct employment consisted of 9 042 permanent employees, 498 temporary employees and 6 681 contractors.

“Using a mining multiplier of seven, the industry created 113 547 jobs,” Kasete said.

The largest portion of this indirect job-creation is through local supply chains.

“The mining industry was one of the few sectors to record a positive growth rate in 2018 and was the best performing sector,” said Kasete.

According to the Namibia Statistics Agency (NSA) the sector grew by 22% in 2018, in comparison to a growth rate of 13.3% in 2017.

Mining contributed 14% to GDP in 2018, compared to 11% in 2017.

Kasete said the strong performance was the result of production increases in uranium and diamonds, which grew by 64.8% and 13.7%, respectively.

“Increases in uranium output were propelled by the ramping up of operations at Husab mine and increased production from Rössing, despite a stagnant uranium market and low prices for the first half of the year,” he said.

Diamond production was driven by improved output from Namdeb and Debmarine's operations.

According to Kasete a positive growth rate, however, did not mean plain sailing for the whole sector in 2018.

He said the industry unfortunately suffered 822 retrenchments as a result of volatile mineral commodity markets in the second half of the year and a stagnantly low uranium price in the last nine years.

“The Chamber of Mines regrets the loss of jobs in the industry.

“However this is in conjunction with the understanding that successes and failures of mining operations are determined by mineral commodity price cycles, which are a result of market forces beyond our control.”

Kasete said downsizing and retrenchments are, therefore, a last port of call during mineral commodity price downturns.

He said the re-opening of some old mines and the development of another new cement plant with limestone mining operations created 710 new jobs, resulting in net job losses of 112.

According to Kasete the mining industry generated N$33.5 billion in revenue last year through the sale of mineral products, of which 40% was spent on goods and services from local suppliers.

“It is through this linkage where the mining industry has the greatest impact on local economic development, primarily in job-creation.”

He said the mining industry also makes a sizeable contribution to the fiscus, on average generating around 7% of government income.

In 2018 the sector paid N$1.707 billion in corporate taxes, N$2.063 billion in royalties and N$214 million in export levies.

Fixed investment by the industry declined by 26%, from N$5.6 billion in 2011 to N$4.14 billion in 2018.

“This decline in recent years came off a very high base in the period from 2013 to 2016, which saw the simultaneous development of three major mines.

Currently there are no new projects of the same magnitude in development. However, investments are being made into the re-opening of old mines,” said Kasete.

Exploration expenditure recorded a modest increase of 2%, from N$562.1 million in 2017 to N$573.3 million in 2018.

Kasete said the bulk of this exploration was by mining companies to expand existing resources, while exploration expenditure by exploration and development companies declined from N$303.8 million in 2017 to N$205.6 million in 2018.





ELLANIE SMIT