Mining industry in limbo – Malango

• By Hilary Mare

THE Chamber of Mines of Namibia is of the view that the recently released 2021 Fraser Institute Survey of Mining Companies accurately reflects the overall status quo of the current investment landscape in Namibia, one which appears to be in limbo rather than improving dramatically.

This was said by Veston Malango, Chamber of Mines CEO, who further highlighted that it remains increasingly worrisome that while pronouncements by the government favour a conducive investment environment, there is no visible corresponding action to demonstrate the finalisation of outstanding policy matters that continue to perpetuate investor uncertainty.

“The chamber remains committed to working with the government through MME to overcome these hurdles, and to ensure the most favourable policy outcomes are reached to benefit mining and Namibia, and to once again make Namibia the most attractive jurisdiction for investment into exploration and mining on the African continent,” he said.

The survey shows that the country improved marginally on the Policy Perception Index (PPI) by 0.94 points, but cites Namibia as being one of three African jurisdictions to improve on this score.

Globally, Namibia improved on her overall PPI ranking, gaining 18 places from 47th position in 2020 to 29th position in 2021.

Namibia also ranked as the 2nd most favourable jurisdiction on PPI on the African continent, a significant improvement from its less favourable ranking of 5th position in 2020. Morocco had the highest PPI score, and ranked first position in Africa.

“It must be highlighted and cautioned that the absolute improvement of Namibia’s score from 74,30 points in 2020 to 75,20 in 2021 is marginal and still much lower as compared to her outstanding scores achieved in 2018 and 2019.

“This indicates there is still much to be done to improve Namibia’s policy landscape.

The survey solicited more than nine responses in the 2021 survey, a positive outcome which enhances the overall validity of Namibia’s findings. Namibia’s lower PPI score in 2021 with more respondents thus corroborates with the less favourable policy environment in 2020 as was evidenced by a similarly low PPI score received by fewer respondents (less than 9),” Malango said.

Despite Namibia’s improvement on the overall PPI index, the individual responses highlighted in this report on Namibia’s policy environment were negative. The remarks are related to the lengthy permitting process as a hindrance for project development, and concerns around the non-deductibility of royalties.

“The latter response is not valid as this matter was successfully resolved in 2020. The quoted concern is that non-deductibility of royalty payments prevents the sector from minimising costs and hurts the industry’s competitiveness.

“The chamber is of the view that this statement negatively affected Namibia’s performance. Namibia’s PPI score, and it’s ranking globally and on the African continent, would have been much better without this erroneous and baseless concern as this risk is no longer applicable, and has not been in the last two years,” added Malango.