Minister’s Foreword,
As we all know, mining is one of the most important sectors of our economy. In 2018 the mining sector contributed 14% to our GDP, and it is expected that by 2022 the mining sector’s share of the GDP will exceed 15%. This high contribution to our economy suggests that for the foreseeable future, the economy will be dominated by the mining sector. Given the impact the mining sector has on the economy, it therefore goes without saying that we need to be pragmatic in the management of the sector. We need to ensure that the mineral resources are utilised to the benefit of both the investors and the state.
Because of the importance of the mining sector, it is no surprise that the Namibian people, who are the real owners of the resources, have a heightened interest in the mining sector. They want to know how the mineral resources are being exploited and utilised. They have a legitimate expectation that the mineral resources be shared equitably.
A common question that is being asked is whether the mining sector can do more for the economy. For example, can the mining sector be leveraged to strengthen the productive capacity of the economy as a whole? Can we not add more value to our minerals before they are exported in raw form? What about the mining industry sourcing locally produced goods and services as inputs in to their mining activities? What about local ownership in the sector and the issue of economic empowerment? These are all important and legitimate questions to be asked.
My general answer to these questions is that yes, indeed, all the above issues can be achieved. Yes, indeed, the mining sector can do more. There is no reason why we should continue to export all our raw minerals in raw forms – some of which can easily be value-added. What is needed is a comprehensive dialogue between all the relevant parties that takes place in an environment of mutual trust; an environment in which the parties recognise their mutual inter-dependency. A dialogue that seeks to discover what is in the best interest of both parties.
When such a dialogue takes place it will be possible for both parties to discover, for example, that a successful value-addition scheme is mutually beneficial to both the investors and the state. You will discover that value-addition and the need to have an enabling investment environment are not mutually exclusive, as some want us to believe. It has been proven that the two can be mutually reinforcing. Value-addition will strengthen the productive capacity of the economy, thereby serving as a catalyst for more investment in the economy. I am happy to note that such a dialogue between the mining industry and the Ministry of Mines and Energy has been intensified and I am hopeful that soon we will come to a mutually agreed outcome.
One important fact that must always be kept in mind is that the mining sector will remain an important contributor to the economy only if we discover more minerals. This is so because given the non-renewable nature of minerals, the existing mines will eventually close. However, for us to discover new minerals and therefore new mines, a number of things have to happen.
The first thing is that we need to have a good understanding of our minerals potential. We need to have a good knowledge of what minerals are available. We need to encourage more investment in comprehensive geological mapping. Without improved geological mapping, it will rather be difficult to attract investment for mineral exploration. Fortunately the emerging geological mapping technology has made it possible to obtain accurate mineral-resource assessment.
The second thing is to do everything possible to attract investment, both local and foreign, in mineral exploration. Without exploration no new minerals can be discovered. We also need to be aware of the fact that exploration is a high-risk investment. When you invest in mineral exploration there is no guarantee that you will discover minerals. It is estimated that the chance of exploration leading to a successful mining operation is 1:1 000 and the lead time can be as long as ten to fifteen years.
In order for us to attract exploration investment, we need to do a number of things. One of the things we need to do is to periodically review our mineral licensing legal framework. This is necessary in order to ensure that we continue to be competitive in attracting investment, both local and foreign. For example, it is not helpful when it takes an inordinately long time for us to finalise the processing of licensing applications. It would be self-defeating if we imposed impractical licensing conditions or if our policies were unpredictable and created policy uncertainties.
Going forward in steering our mining sector to the next level for an enhanced contribution to our socio-economic development and prosperity, let us recognise that in this 21st century things do not necessarily work like they used to. We live in an ever-changing economic and geo-political environment, where there is no sure script for success. However, I would like to believe that as a country we are in a fortunate position because of a strong foundation we were able to build over the years.
What will be required of us is to unleash the creativity and brain power of our people, especially that of the youth. We also need to agree to make ourselves reasonably uncomfortable by venturing into unexplored fields and doing things no one has done before. If we, as a collective, approach our challenges in the Harambee spirit and with creativity, innovation and courage, the mining sector will continue to be an important contributor to socio-economic wellbeing.
Tom K Alweendo, MP
Minister: Mines & Energy
Because of the importance of the mining sector, it is no surprise that the Namibian people, who are the real owners of the resources, have a heightened interest in the mining sector. They want to know how the mineral resources are being exploited and utilised. They have a legitimate expectation that the mineral resources be shared equitably.
A common question that is being asked is whether the mining sector can do more for the economy. For example, can the mining sector be leveraged to strengthen the productive capacity of the economy as a whole? Can we not add more value to our minerals before they are exported in raw form? What about the mining industry sourcing locally produced goods and services as inputs in to their mining activities? What about local ownership in the sector and the issue of economic empowerment? These are all important and legitimate questions to be asked.
My general answer to these questions is that yes, indeed, all the above issues can be achieved. Yes, indeed, the mining sector can do more. There is no reason why we should continue to export all our raw minerals in raw forms – some of which can easily be value-added. What is needed is a comprehensive dialogue between all the relevant parties that takes place in an environment of mutual trust; an environment in which the parties recognise their mutual inter-dependency. A dialogue that seeks to discover what is in the best interest of both parties.
When such a dialogue takes place it will be possible for both parties to discover, for example, that a successful value-addition scheme is mutually beneficial to both the investors and the state. You will discover that value-addition and the need to have an enabling investment environment are not mutually exclusive, as some want us to believe. It has been proven that the two can be mutually reinforcing. Value-addition will strengthen the productive capacity of the economy, thereby serving as a catalyst for more investment in the economy. I am happy to note that such a dialogue between the mining industry and the Ministry of Mines and Energy has been intensified and I am hopeful that soon we will come to a mutually agreed outcome.
One important fact that must always be kept in mind is that the mining sector will remain an important contributor to the economy only if we discover more minerals. This is so because given the non-renewable nature of minerals, the existing mines will eventually close. However, for us to discover new minerals and therefore new mines, a number of things have to happen.
The first thing is that we need to have a good understanding of our minerals potential. We need to have a good knowledge of what minerals are available. We need to encourage more investment in comprehensive geological mapping. Without improved geological mapping, it will rather be difficult to attract investment for mineral exploration. Fortunately the emerging geological mapping technology has made it possible to obtain accurate mineral-resource assessment.
The second thing is to do everything possible to attract investment, both local and foreign, in mineral exploration. Without exploration no new minerals can be discovered. We also need to be aware of the fact that exploration is a high-risk investment. When you invest in mineral exploration there is no guarantee that you will discover minerals. It is estimated that the chance of exploration leading to a successful mining operation is 1:1 000 and the lead time can be as long as ten to fifteen years.
In order for us to attract exploration investment, we need to do a number of things. One of the things we need to do is to periodically review our mineral licensing legal framework. This is necessary in order to ensure that we continue to be competitive in attracting investment, both local and foreign. For example, it is not helpful when it takes an inordinately long time for us to finalise the processing of licensing applications. It would be self-defeating if we imposed impractical licensing conditions or if our policies were unpredictable and created policy uncertainties.
Going forward in steering our mining sector to the next level for an enhanced contribution to our socio-economic development and prosperity, let us recognise that in this 21st century things do not necessarily work like they used to. We live in an ever-changing economic and geo-political environment, where there is no sure script for success. However, I would like to believe that as a country we are in a fortunate position because of a strong foundation we were able to build over the years.
What will be required of us is to unleash the creativity and brain power of our people, especially that of the youth. We also need to agree to make ourselves reasonably uncomfortable by venturing into unexplored fields and doing things no one has done before. If we, as a collective, approach our challenges in the Harambee spirit and with creativity, innovation and courage, the mining sector will continue to be an important contributor to socio-economic wellbeing.
Tom K Alweendo, MP
Minister: Mines & Energy
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