COUNTRY IN FOCUS • move to indigenisation through regulation and this poses possible challenges for investors , said the World Bank . 3
Malango noted in the Chamber of Mines in the 2021 Annual Review , “ It remains increasingly worrisome that the current policy pronouncements and dialogue from MME favour regulatory mechanisms that will continue to deteriorate and demolish a mining framework that was once conducive for investment into mining .” He was referring to the finalisation of the Namibia Investment Promotion Act ( NIPA ) and the New Equitable Economic Empowerment Bill ( NEEEB ), pending for around 6 years now amongst others . Both pieces of legislation could significantly impact investment and ownership of mines in Namibia .
There has however been significant movement here as the Chamber and MME have been in continuous discussions on the subject and are aligned in the overall objectives to support the growth of mining and draw increased mining investment to Namibia .
Draft Minerals Bill After many interruptions and delays during Covid-19 , the Chamber received the Minerals Bill for comment and input on 24 March 2022 . The Chamber compiled a comprehensive common industry position on key clauses and submitted it to MME on 24 May 2022 . The Chamber commented in its 2022 review that it noted many positive inclusions and revisions , which were aligned to prior consultations and agreed-upon positions reached between the industry and MME regarding the legislation , saying , “ The most contentious aspects of the draft Bill are proposals to increase the upper royalty rate limit from 5 % to 10 % for base and precious metals , nuclear fuel minerals , dimension stone and industrial minerals , the introduction of a windfall tax and the inclusion of Mining Charter provisions as part of the legislation . With regard to the royalty and tax proposals in the Bill , Namibia ’ s mining industry has one of the highest effective tax rates in the world and research has proven that the industry is not able to pay more taxes , lest the mines and projects in Namibia would become unviable . Secondly , the Mining Charter is intended to become applicable when NEEEF is finalised , to be enforced by MME as regulations under the new Minerals Act .
“ The Chamber hopes that consultations on the draft Minerals Bill will be completed in 2023 and that agreeable positions can be established between all stakeholders and presented to Parliament before the close of the year . This Minerals Bill Review process has been on-going for the last twenty years , and the Chamber is relieved to see increased momentum and commitment by MME to finalise the Bill .” 7
The lack of clarity and lack of conclusion in these matters have led to some uncertainty for investors – in May this year , the Namibia Investment Promotion and Development Board ( NIPDB ), which previously red-flagged the NEEEB , had said the length of time for the bill to be finalised has created ambiguity . 11 It must , however , also be noted that there is ongoing dialogue between the private sector and the government , which is rare and appreciated by local mining companies . 12
VAT registrations and input refunds for exploration companies The passing of the Vat Amendment Act which was gazetted on 29 December 2022 and effective on 1st January 2023 , was a major win for the industry . The Chamber explained , “ The Act now allows for exploration companies to register for VAT unhindered and claim for input Vat refunds , which was previously being administered on an ad hoc and discretionary basis by the Ministry of Finance ( MoF ). In addition , MoF also announced that all outstanding claims made by exploration companies ( including oil and gas ) that were previously declined on the basis of not having produced taxable supplies , would now be refunded . This commendable legislative action by Parliament will elevate Namibia as a mining destination allowing exploration companies to conduct their activities at a lower cost , and the Chamber looks forward to witnessing greater inflows of investment into exploration as a result .”
Unfortunately , there were no new developments or updates on NEEEF and NIPA – two critical pieces of legislation , at the time of writing .
ESG in Namibia The mining sector through the Chamber of Mines , and in collaboration with the Namibia Chamber of Environment , the Ministry of Environment , Forestry & Tourism ( MEFT ) and MME produced its own Best Practice Guide – Environmental Principles for Mining in Namibia ( https :// eccenvironmental . com / wpcontent / uploads / 2019 / 05 / Best-Practice-Guide-Mining-Namibia . pdf ). The guide provides key information for industry practitioners and personnel on how environmental , social and economic aspects of mining are optimally managed throughout the mining lifecycle to have the most sustainable impact on national development as well as surrounding towns and communities .
While there are indeed a host of very useful internationally recognised frameworks of best practice , reporting guidelines and benchmarks , this guide is unique in that it incorporates the local regulatory frameworks and accounts for the relevant governing and supporting institutions .
In the light of the global ESG imperatives and investment drive in energy critical minerals , Minister Alweendo welcomed investors to Namibia . He concluded his discussion with African Mining with a profound message on true investor / host country partnerships , noting that these should be recalibrated – they must be balanced and mutually beneficial relationships . To view his statement , go to https :// www . linkedin . com / posts / african-mining-publication _ miningindaba2023-mi2023-energy-activity-7028720526776840193- I9IQ /? utm _ source = share & utm _ medium = member _ desktop . •
References :
1 . Fitch Solutions ' Namibia Mining Report . https :// store . fitchsolutions . com / all-products / namibia-mining-report
2 . The total population in Namibia was estimated at 2.6 million people in 2021 , according to the latest census figures and projections from Trading Economics . Source : Bank of Namibia https :// tradingeconomics . com / namibia / population
3 . https :// www . worldbank . org / enhttps :// www . worldbank . org / en / country / namibia / country / namibia / overview 4 . https :// tradingeconomics . com / namibia / gdp-growth-annual 5 . https :// www . afdb . org / en / countries / southern-africa / namibia / namibiaeconomic-outlook 6 . https :// www . trade . gov / country-commercial-guides / namibia-miningand-minerals 7 . https :// chamberofmines . org . na / annual-reviews /
2022-Chamber-of-Mines-Annual-Review . pdf ( chamberofmines . org . na ) 8 . https :// wordpress . thebrief . com . na / 2022 / 06 / namibia-now-worldsecond-largest-uranium-oxide-producer /
9 . https :// cdn-api . markitdigital . com / apiman-gateway / ASX / asx-research / 1.0 / file / 2924-02608835-6A1126858 ? access _ token = 83ff96335c2d45a094df02a206a39ff4
10 . https :// www . gbreports . com / files / pdf /_ 2022 / MACIG _ 2022 _ - _ Web _ Preview _ 4 _ B . pdf
11 . https :// namibian . com . na / delayed-neeeb-creates-uncertaintyinvestment-board /
12 . https :// www . reuters . com / business / energy / shell-total-namibia- oil-discoveries-likely-billions-barrels-minister-2022-09- 02 /#:~: text = Both % 20companies % 20announced % 20earlier % 20 this , billion % 20barrels % 20of % 20oil % 20equivalent .
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