Namdeb to continue mining for two decades

Over the 20 years, it is estimated that an additional N$40 billion will flow into the fiscus as a result of this plan.

15 October 2021 | Economics

Approximately 2100 jobs will be retained as a result of the life of mine extension and approximately 600 jobs are being added to enable the additional production activities. Riaan Burger, CEO: Namdeb

PHILLEPUS UUSIKU

Namdeb Diamond Corporation announced the approval of its long-term business plan (LTP) which will extend the current life of the mine from 2022 to 2042.

Over the 20 years, it is estimated that an additional N$40 billion will flow into the fiscus as a result of this plan and the total contribution to the Namibian economy will be huge as more jobs will be created.

As part of the plan, the government has offered Namdeb royalty remission from 2021 to 2025, with the royalty rate during this period reducing from 10% to 5%. This royalty remission has in turn underpinned an economically sustainable future for Namdeb through a life-of-mine extension.

Under the previous business plan, the land based Namdeb operations would have come to the end of their life in 2022 due to unsustainable economics. However, a series of positive engagements between the Namdeb management team and the government has enabled the creation of a mutually beneficial new business plan that extends the life of mine by up to 20 years.

This is major milestone in the company’s long history and one which has significant implications, not only for the company’s employees, shareholders and local community, but also for the Namibian economy.

Benefits

Speaking at the announcement, Riaan Burger, Namdeb’s chief executive officer (CEO) said production will be ramped up over the next two and a half years to approximately 160% of the current capacity.

This means a significant capital investment of approximately N$1.8 billion and similarly, a significant increase in operational cost.

Approximately 2100 jobs (1500 Namdeb employees ,600 contractors) at Namdeb will be retained as a result of the life of mine extension and approximately 600 jobs are being added to enable the additional production activities, Burger pointed out.

The LTP positively impacts the socio-economic development of Namibia with direct benefits to the //Kharas region and in particular the town of Oranjemund.

The plan supports the economic transformation of the town, providing an extended period during which it is enabled to diversify and develop new economic activities beyond mining such tourism, agriculture and green hydrogen, he added.

Namdeb has provided significant medical support to the Oranjemund community and in fact the entire south of Namibia during the Covid pandemic and the plan enables the further support of the community. In addition, there is an opportunity for Namdeb to continue to provide public and private education support in the town, as it has been for a number of years.

Economy

“This plan opens up new opportunities for us at Namdeb to explore better ways of working and to demonstrate the good that diamonds to in our communities and in our country. In this regard, we are for instance already investing in renewable energy and have the ambition to become a carbon-neutral operation by 2030,” Burger said.

Also present at media conference, Bruce Cleaver, De Beers CEO pointed out that Namdeb is a shining example of partnership, has a proud and unique place in Namibia’s economic history. This new business plan, forged by Namdeb management and enabled by the willingness of government to find a solution in the best interest of Namibia, means that Namdeb’s future is now secure and the company is positioned to continue making a significant contribution to the Namibian economy, the socio-economic development of the Oranjemund community and the lives of Namdeb employees.”

In his keynote address during a stakeholder engagement meeting, honourable Tom Alweendo Minister of Mines and Energy stated that mining remains the backbone of our economy and is one of the largest employment sectors within our country. Government understood the fundamental impact of what the Namdeb mine closure would have had on Namibia. Therefore, it was imperative to safeguard this operation for the benefit of sustaining the life-of-mine for both the national economy as well as preserving employment for our people and the livelihoods of families that depend on it.”

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