The mining sector accounted for 50% of economic growth
The NAMIBIAN mining sector has seen an improvement in commodity prices, which has made a significant contribution to the country’s economy – accounting for 50% of the country’s overall growth rate in 2021, with the economy recording a growth rate 2.4%, according to the president of the Chamber of Mines, Hilifa Mbako.
He said the price of copper broke through price levels not seen in recent history, reaching a price of US$10,161 per metric ton (MT) in May 2021. On top of that, he said lead, zinc and tin also sustained high price levels throughout the year.
Mbako further explained that the price of uranium traded up to a nine-year high of US$50 before closing the year at US$42.
In addition, he said the price of diamonds has also improved as economic recovery in developed and emerging economies has supported higher demand.
In contrast, Mbako said the price of gold fell in 2021, hovering around USD 1,800/troy oz due to the appreciation of the US dollar against other currencies and expected interest rate hikes. . Still, he acknowledged that the price of gold has maintained a much higher level compared to the period from 2013 to 2018.
Mbako further said that the sector is also well positioned to support the country’s economic recovery over the next two years, given rising mineral commodity prices and increased uranium and diamond production.
“This view is supported by the strong growth rate of mining in 2021, which recorded 13.6% according to preliminary national accounts released by the NSA,” Mbako added.
According to Mbako, the sector has also contributed to job creation as it employed 15,246 people in 2021, representing a 4.5% increase in total direct employment. In addition, he said the sector also spent an estimated N$15.297 billion on goods and services from companies registered in Namibia, which is equivalent to 47% of the industry’s total revenue from mining in 2021.
Still, there were some challenges. Chief among them is the Covid-19 pandemic which led the industry to record a cumulative number of 4,604 cases and 37 deaths among House members in 2021.
Despite this, Mbako said the sector responded quickly by partnering with the private sector to meet the needs of a nation battered by the Covid-19 pandemic.
Mbako also expressed concern about the findings of the Fraser Institute’s 2021 survey of mining companies, which revealed less encouraging results for the country in terms of political attractiveness as a mining jurisdiction.
“The Fraser Institute’s Mining Company Survey Report 2021 shows that Namibia has significantly diminished its overall investment attractiveness as a mining jurisdiction. The results indicate that the sharp decline in the Investment Attractiveness Index is due to a substantial deterioration in the Best Practice Minerals Index, which measures a country’s mining potential assuming a world-class regulatory environment,” said explained Mbako.
Given this, he said it is clear that more needs to be done to restore investor confidence in Namibia as a stable and attractive mining jurisdiction.