Tough times for mines in Nam

Mines spent about N$13.4 billion on local procurement in 2019, around N$23 more than in 2018.

14 August 2020 | Business

The Chamber has shown tenacity to resolve challenges in removing the policy and regulatory obstacles. – Zebra Kasete, President: Chamber of Mines

Jo-Maré Duddy – Of the 16 operating mining companies included in the latest annual review of the Chamber of Mines of Namibia, six last year suffered losses of nearly N$3 billion in total.

Despite this, the mining sector overall still made a significant contribution to the economy.

Mines in Namibia in 2019 earned about N$33.5 billion in sales revenue in total and some 71% of its distributable cash stayed within the country’s borders.

Of this, nearly N$6.03 billion was paid out as salaries and wages, about one percent less than in 2018, according the Chamber’s review which was launched yesterday.

The sector in 2019 employed 16 342 people in total – 121 more than the previous year. About 55% or 9 027 of were permanent employees, while nearly 40% was contractors.

Only 269 or 1.7% of the total labour force were foreigners.

Mines spent about N$13.4 billion on local procurement in 2019, around N$23 more than in 2018.

In addition, mines filled state coffers with some N$3.4 billion in taxes and levies last year: about N$1.4 billion in corporate tax, N$1.7 billion in royalties and N$243 million in export levies.

Hard times

Compared to 2018, mines paid about N$248 million or nearly 6.8% less in corporate tax, royalties and export levies.

Of the mines recording losses in their past financial year, Dundee Precious Metals Tsumeb suffered the biggest blow. The blister copper producer reported a loss of N$1.6 billion for its 2019 book-year, including a non-cash write-down of N$1.5 billion.

Langer Heinrich Uranium, which has been on care and maintenance since since mid-2018, reported a loss of N$850.1 million, while Skorpion Zinc reported a loss of N$379.6 million.

Namib Lead & Zinc Mining’s loss was N$60.6 million, while QKR Namibia Navachab Gold Mine reported a loss of N$53.4 million.

Iron producer Lodgestone Namibia suffered a loss of N$12 million.

Investment

Operating and development mining companies that belong to the Chamber last year spent more than N$3.37 billion on fixed investment in Namibia.

In his message in the review, Chamber president Zebra Kasete said: “To facilitate the sector’s continued growth, in an industry that is maturing, the Chamber remains committed to helping government remove some of the elements that are currently detracting from Namibia’s otherwise well balanced and stable mining regulatory regime.”

According to Kasete, the Chamber has shown “tenacity to resolve challenges in removing the policy and regulatory obstacles, and I have no doubt that these issues will be overcome”.

“My dream and vision is for these outcomes to return Namibia to a highly favoured mining jurisdiction and ensure the continued growth of our sector,” Kasete said.

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