A call for renegotiation: Government shareholding in Namibia’s mining sector

Namibia is endowed with a wealth of natural resources, particularly in the mining sector, which plays a pivotal role in the country’s economy. The government’s shareholding in these mines is crucial not only for revenue generation but also for ensuring that the benefits of mineral wealth are equitably distributed among Namibians. As we assess the current landscape, it becomes imperative to consider whether the existing government ownership percentages are optimal for fostering sustainable development and maximising national benefits.The current status quo of government shareholding in top mines:As of October 2023, the Namibian government holds varying percentages of shares in several key mining operations across the country. Below is an overview of the top 12 mines and their respective government shareholdings:1. Rossing Uranium Mine - The Namibian government owns approximately 3% through its investment arm, Epangelo Mining Company.2. Tschudi Copper Mine - The government has a stake of about 10%, reflecting its interest in copper production.3. Namdeb Diamond Corporation - This joint venture between De Beers and the Namibian government sees state ownership at around 50%, showcasing a significant level of control over diamond resources.4. Rosh Pinah Zinc Mine - The government’s share here stands at roughly 5%, indicating limited participation in zinc extraction.5. Skorpion Zinc Mine - Similar to Rosh Pinah, the Skorpion mine has a government stake of about 5%.6. Husab Uranium Mine - The Namibian government holds a mere 2%, which raises questions about its influence over this major uranium producer.7. Opuwo Cobalt Project - Here, the government’s stake is approximately 10%, reflecting an emerging interest in cobalt mining.8. Walvis Bay Salt Holdings (Salt) - The state owns around 15%, highlighting its involvement in salt production.9. Kombat Copper Mine - The government’s ownership percentage is about 10%, indicating moderate engagement with copper resources.10. Langer Heinrich Uranium Mine - The Namibian government has a minimal stake of around 3%, further emphasising limited representation in uranium mining.11. Navachab Gold Mine The Navachab Gold Mine is owned by QKR Corporation, a private mining company. The Namibian government does not have a direct stake in the mine.12. Otjikoto Gold Mine The Otjikoto Gold Mine is owned by B2Gold, a Canadian mining corporation. The Namibian government does not have a direct stake in the mine.These figures illustrate that while there are instances of substantial governmental involvement—particularly with diamonds – the overall shareholding percentages remain relatively low compared to what could be achieved.The case for renegotiationGiven these stakes, it is essential to evaluate whether they adequately reflect Namibia’s interests and aspirations as a nation rich in minerals. Several factors support the argument for renegotiating theseshareholdings:1. Maximising National Revenue: With global demand for minerals on the rise, increasing government stakes could significantly enhance national revenues through dividends and taxes, thereby funding critical public services such as education and healthcare.2. Ensuring Sustainable Development: Greater ownership would allow the government to enforce stricter environmental regulations and ensure that mining activities align with sustainable development goals.3. Empowering Local Communities: By increasing its shareholdings, the government can ensure that local communities benefit more directly from mining operations through job creation and local procurement policies.4. Attracting Investment: While some may argue that higher state ownership could deter foreign investment, many successful models worldwide demonstrate that strategic partnerships can coexist with significant governmental control.5. Addressing Inequality: A larger shareholding can help address economic disparities by redistributing wealth generated from natural resources back into local communities. 6. Strengthening Negotiation Power: A stronger position would empower Namibia during negotiations with multinational corporations, ensuring fairer terms and conditions that prioritise national interests.In light of these considerations, it is prudent for the Namibian government to engage stakeholders – including industry leaders, community representatives, and international partners – in discussions aimed at revisiting existing agreements related to mining shares. The time has come for Namibia to reassess its approach to governmental shareholdings within its lucrative mining sector. By renegotiating these percentages, not only can we maximise revenue generation but also ensure equitable distribution of resources among all Namibians while promoting sustainable practices within our rich natural environment.*Nocky Kaapehi is a master's of business administration candidate, specialising in natural resource management at the University of Namibia.

A call for renegotiation: Government shareholding in Namibia’s mining sector

Comments

Namibian Sun 2024-11-22

Please login to leave a comment

A call for renegotiation: Government shareholding in Namibia’s mining sector

Comments

Namibian Sun 2024-11-22

Please login to leave a comment

Login