Namibia Abandons Ownership Rules in its Mining Sector
Namibia scrapped the rules for black ownership in its mining sector, according to Minister of the Namibian Chamber of Mines Tom Alweendo. Three years into a recession, Namibia looks to loosen ownership restrictions to encourage investment in the country’s mining industry.
The decision comes just a few weeks after agreements were signed between Kenyan and Namibian leaders to collectively strengthen sectors such as tourism, fishing, and mining.
Historically, the mining sector has been the Namibian economy’s main driver of growth. According to the Namibia Statistics Agency, the mining sector contributed 12% to the national GDP in 2017 and employed just under 17,000 people, accounting for 2.5% of the workforce.
However, the question of who gets to participate in such a vital industry — which is responsible for some of the country’s most lucrative projects — has been debated for much of the recent past.
After gaining independence from South Africa in 1990, Namibia suffered from continuing apartheid-style rules. This was evidenced clearly by the country’s economy, the majority of which was controlled by the white minority. Initiatives by the Namibian government to give preferential treatment to black-owned companies began in 2006, but these were ultimately seen as ineffective.
A law created in 2015 introduced several conditions on mineral license holders in another attempt to encourage black Namibians to participate in the mining sector. The law required that a minimum of five percent of all licenses be reserved for persons of Namibian origin or by companies wholly owned by Namibian nationals. The law also stated that “historically disadvantaged” Namibians must make up at least twenty percent of the management teams of exploration and mining companies.
Three years later, critics say these rules have harmed the country’s ability to attract foreign investment. Namibia produces diamonds, uranium, and other mineral resources, though it will be difficult for mineral discovery to be entirely effective until investment in the sector increases.
According to the president of the Chamber of Mines, “The minister of mines has withdrawn them [preferential conditions] as they were not practical, and retrogressive. You cannot empower previously disadvantaged Namibians with debt. [It] defeats the purpose. Exploration is high-risk, with no guarantee of the discovery of a deposit. It is, therefore, high-risk debt.”
“Our objective is to grow the mining sector where it can continue to meaningfully contribute to our socio-economic development,” said Alweendo. “This can only happen when more minerals are discovered and it is important that we make the progress of mineral discovery as effective as possible.”