Alweendo addresses local mine ownershipNamibia's Mines and energy minister Tom Alweendo has raised concerns about the lack of local ownership of mines in the country.
According to Alweendo, the lack of complex technologies and intensive capital available to Namibians is a major reason why they are unable to own and operate local mines. "It is thus clear that phase one is the most important step in the process of making our natural resources work for us; it therefore goes without saying that during this phase and to have a chance of making a discovery, you need to have the necessary capability. You need to have the right technology.”
He explained: "You need to have the requisite risk capital, where money is spent with no promise of finding any resources. I am making this point because there are some amongst us who are of the view that, to encourage local ownership, exploration rights for both minerals and petroleum should be awarded without due regard to the capability to do exploration."
The minister made these remarks during a recent address to the National Assembly. Despite being a country rich in mineral resources and the mining industry playing a crucial role in the country’s economy, the majority of Namibia's mines are owned by foreign companies.
Alweendo encouraged the incentivising of local ownership through the establishment of a state-funded mineral exploration fund. "Another important issue in relation to state ownership is to establish the level of ownership that is agreeable to both the state and the investors. What is the appropriate percentage of the free-carry state ownership? Is it 10%, 20%, or perhaps 50%?
Whatever percentage is deemed appropriate, the most important thing is that we deal with this issue with sober mindedness," the minister said. "We need to be mindful of the fact that there is a level above which no investor will invest – a situation we really do not want to find ourselves in. It is said a bird in hand is worth two in the bush. Another idea we have for how to incentivise local ownership, is to establish a state-funded minerals exploration fund, which could be funded by a portion of the royalties that mining companies pay to the state. The fund will then be used to assist eligible local entrepreneurs who wish to invest in the mining sector," he explained.
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