Namibia Mining Report Q3 2009

Namibia is richly endowed with natural resources and is known globally for its uranium and diamond deposits. The country is the world's sixth-largest producer of uranium and among the largest gem-quality diamond producers in value terms. It also features among the top five nations around the globe for its zinc, copper and lead reserves. To expand the revenue earning potential of its mining industry, the Namibian government is making fervent efforts to establish a strong domestic market for diamond cutting and polishing. Taken together, these factors underscore the importance of the Namibian mining industry for its economy.

That said, the Namibian mining industry needs to gain a foothold in certain areas to further enhance its prospects, particularly as diamond production appears to slow down. Lack of water resources is a key factor that discourages investments in the mining industry. As a result of the nation's underperforming infrastructural facilities, mineral exploration has been slow, thus constraining the growth of the Namibian mining industry. On the other hand, recognising the vital role uranium is set to play in the country's future, processes have been initiated to revise and amend the Minerals Act, to align regulations that allow judicious exploitation of the resource.

The global economic slowdown continues to impact on Namibia's mining sector. A June report on PANA stated that Weatherly International, owner of major copper producer Ongopolo Mining, would not be reopening its five copper mines in 2009, despite a recent increase in global copper prices. Weatherly's mining operations were suspended in 2008, with more than 620 people losing their jobs as a consequence.

Looking forward, reports that Weatherly has been auctioning off underground mining equipment do not bode well for the near-term future for their Namibian operations. That said, Managing Director Hans Nolte has defended the move to sell off underground mining equipment, telling PANA that his company may look to abandon underground mining in favour of cheaper open-pit mining.

However, while job losses are increasing in the copper and diamond sectors, many workers are moving over to the burgeoning uranium sub-sector, which is continuing to power ahead.