What does Just Energy Transition mean for Namibia’s mining?

LOVISA NASHILONGO AMUKWA In recent time, governments, private and public sectors have succumbed to mounting pressure after the UN Paris 21 Agreement came into effect. Resolutions of the Paris Agreement require drastic measures to be taken in decarbonising the economy and accelerating the Just Energy Transition. In a nutshell, the Just Energy Transition (JET) highlights that access to energy must be sustainable and climate friendly. In view of the dramatic implications of climate change, sustainable energy must be low carbon and in the near future even zero carbon.To this effect, governments all over the world have been introducing drastic policies to promote the expansion of green energy hoping to replace fossil fuels, which are regarded as offensive when it comes to carbon emissions and global warming. South Africa has introduced Carbon Tax, levied on all stakeholders liable for Carbon Emissions. Economists project negative growth for oil and gas (O&G) companies owing to slowed market demand for their core products. As such, their margins will continue shrinking in the short and mid-term and eventually disappear in the long term, and oil and gas reserves will devalue from substitution by greener energy sources. The ramifications led to an industry Oil and Gas Climate Initiative launched in 2014, comprising of international oil companies such as BP, Chevron, CNPC, ENI, Equinor, ExxonMobil, Petrobras, Repsol, Saudi Aramco, Shell and Total; affirming that its members “are dedicated to the ambition of the Paris Agreement to progress to net zero emissions in the second half of this century.” The switch to “energy companies” instead of “oil and gas companies” is an attempt to convey a more inclusive image of the industry. Earlier this year, Total announced that it would build its largest solar power project to date in Qatar, in collaboration with the Japanese investment group Marubeni. Back in 2018, Norwegian NOC, Statoil, changed its name to “Equinor,” dropping the “oil” part supporting their strategy as a broad energy company. The financial community has embarked on the journey towards a greener future, redirecting funds from the “dirty” fossil fuel sector to the more 'noble' green cause. For example, the World Bank decided not to fund any investments in upstream O&G after 2019. Similarly, the European Investment Bank announced it would phase out fossil fuel financing, while large global asset managers like Blackrock will now assess environmental performance when investing in companies. Charitable organisations are also rejecting funding that comes from “dirty” oil. Mining The extractive sector is central to this unprecedented climate-energy challenge. The history of humanity's search for new energy sources, the long era of fossil fuels is slowly dusking, and a new era—that of green energy—is dawning. This new era is already seeing increasing demand for metals needed for renewable energy systems, zero-carbon buildings and new forms of transportation. Achieving all of this will be an important contribution to (i) reduce emissions (ii) the United Nations Sustainable Development Goals (UN-SDGs). The challenge for the mining sector is to increase mining while ensuring that the sector's own emissions are contained.Recent price forecasts indicate a 20% increase in the copper price in real terms over the next ten years. Battery storage, a solution to overcome the intermittency of electricity supplies from renewable energy sources and to replace the internal combustion engine in vehicles, will be important to the demand for Nickel, Cobalt, Lithium and Vanadium. Global mining leaders Anglo American are divesting their coal assets and advancing their hydrogen fuel cell technology. Rare Earth Elements (REEs) have a crucial role in renewable energy, e.g. neodymium -a silvery metal- that makes strong magnets when combined with Iron and boron, which are important both for generators in wind turbines and motors in electric vehicles. The market for REEs will continue seeing a huge demand. Africa is especially mineral rich, and can expect high and rising demand as the technologies of the low-carbon future are highly materials-intensive.Namibia, mining and the Just Energy Transition The surest way to encourage a certain economic activity is to incentivise it. This can be done by reforming a specific industry's fiscal code, by way of modifying different tax instruments to achieve the country's optimal fiscal, economic and political objectives. Namibia has a diverse extractives industry, ranging from fossil fuel deposits (Kudu gas reserves, coal reserves of the Aranos Basin) and nuclear fuel deposits (uranium). Resources such as cobalt, lithium and rare earth elements are endowed on our land and these are integral to the JET, alongside copper, zinc, aluminium, vanadium, iron ore, etc. In order to maximise advantage and participate in the global JET, strategic policy, reform is necessary. This can simply be achieved by offering tax incentives to attract foreign direct Investment into commodities. When this is done, the probability of commercial discoveries for these minerals is increased through increased exploration. This not only benefits the government by securing revenue sources in the future, but to the mining investors as they would be more inclined to repatriate their profits and re-invest in exploration at decreased costs, while contribution to the noble call for decarbonising the economy in ensuring security of supply for these critical metals.It is key to prioritise long term now, all in all ensuring sustainable development in the extraction of our mineral resources. The structural policy reform would not be to the detriment of O&G companies. For example, after shifting focus from O&G, Equinor now powers more than a million European homes with wind energy from four offshore wind farms. This shows how O&G companies are presented with an opportunity for reform and adjustment to the JET. Moreover, they are centres of expertise that can be entrusted with managing the transition to a low carbon economy.The Just Energy Transition is a call to all of us to ponder our ways and correct where our goals misalign with the global agenda for clean energy, and should be taken seriously. It requires all to pull together in one direction – uBuntu - a philosophy that we as Africans are best suited to teach the world.* Lovisa Amukwa is a geologist by profession, and a volunteer for the Women in Mining Association of Namibia. She holds a BSc (Hons) Geology from Unam and an LL.M International Mining Law & Politics from the UK.

What does Just Energy Transition mean for Namibia’s mining?

Comments

Namibian Sun 2025-06-18

Please login to leave a comment

What does Just Energy Transition mean for Namibia’s mining?

Comments

Namibian Sun 2025-06-18

Please login to leave a comment

Login