Namibia a boastful mining spectator

• NUNW pushes for 50% mine ownership

30 April 2020 | Business

OGONE TLHAGE

WINDHOEK



Despite often waxing lyrical about her mineral riches, Namibia continues to be a distant spectator in mining, with China increasingly becoming the dominant force in the sector.

In fact China, whose appetite for uranium to power her industries is on the increase, is seen as a saviour of the country's uranium industry as the mines could have ceased operations due to declining global demand.

The one non-Chinese owned uranium mine, Langer Heinrich, is currently on care and maintenance.

Swakop Uranium and Rössing Uranium are now firmly under control and help feed the Asian giant's insatiable lust for the mineral needed to power major industries.

“The two mines are only operational on the back of the Chinese support,” a senior official for one of the two companies told Namibian Sun yesterday.

Mines and energy minister Tom Alweendo has previously stated that government no longer had appetite to actively own equities in mining – but yesterday also admitted that private local investors have no financial means to join mining at a good scale.





Government is an active miner through sister diamond companies Namdeb and Debmarine Namibia – where it owns 50% shares in each – but that is almost it. Government also owns a paltry three percent in Rössing and, through Epangelo Mining, and another 10% in Swakop Uranium.

The only other state involvement in mining comes through its 7.5% equity in QKR Navachab mine.

Local investors are not actively involved in major mining activity either, although Elizabeth Bay diamond company, previously owned by Namdeb has recently become 100% Namibian-owned.

Both Dundee Precious Metals as well as Salt & Chemicals have 10% local private ownership.

The National Union of Namibian Workers (NUNW) has called for the localisation of the mining sector, saying there is enough money in the local economy to buy up to 50% ownership in mines.

Its secretary-general, Job Muniaro, claims that there is an abundance of wealth in the country with which to achieve partial union ownership of mines.

“It has come to the reality that the unions must own 50% of the mines; we can own the mines ourselves,” said Muniaro when sharing his thoughts regarding the mining industry.

When asked about the financial risks involved in mining, Muniaro said there was no risk in Namibians owing their own resources.

“There is no risk in owning your own minerals. We have enough money [in the country],” said Muniaro.

Muniaro defended his plans of local ownership, saying it was to ensure independence.

“We must start planning for our [own] economic independence,” said Muniaro.



Virus fallout

Muniaro's comments come as the mining industry was forced to limit production to contain the spread of the coronavirus. The Skorpion Zinc mine in Rosh Pinah announced that it would be forced to close altogether.

The union leader's stance was supported by Mineworkers Union deputy secretary-general Paulus Situmba, who said there was a need for dialogue between investors and workers regarding local mine ownership.

“Local mine ownership is a debatable issue. Of course, there are processes to be followed through when it comes to funding buying the mines. Local mine ownership is not something we will stop advocating for,” Situmba said.

“We will never shy away from local mine ownership. The employees already play an important role in the production process of mines,” Situmba added.

According to him, the coronavirus pandemic further highlighted the need for employers and employees to work in unison.

“Now that we are faced with the coronavirus, only the employers feel that the impact is on them. The pandemic gives us a chance to hold hands,” Situmba said.

Chamber of Mines of Namibia CEO Veston Malango said it was inappropriate for the Chamber to comment and referred Namibian Sun to the ministry of mines.



Capitalisation

Mines minister Tom Alweendo said government was not opposed to locals taking increased ownership in mines. “There is nothing wrong with saying locals should own mines. It is not happening because there is no money to pay for local mine ownership,” he said. According to him, government tries to empower locals by issuing exploration licences but these are then sold onto able and willing miners with the financial capacity to build mines.

“I wish our mining companies were owned by locals; government is not opposed,” he said.



Epangelo's involvement

Government in 2010 established local mining company Epangelo to advance its interest of increased ownership in mining companies. To date, it owns 10% in the Husab mine which is China's biggest investment in the country.

Alweendo conceded that efforts to increase local mine ownership were restricted because government does not have sufficient money to capitalise it.

“The idea is that the government will capitalise Epangelo properly to enable it to carry exploration. They are not able to do that because of money,” Alweendo noted.