Mining Guide Namibia Advanced 2015 by Fortune Publications

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MINERAL AND ENERGY GUIDE NAMIBIA

Credits

Ten Hasheela Executive Editor

Confidence Musariri Editor-in-Chief

Wesley Urassa Production Editor

Marizaan Bock General Manager

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TABLE OF CONTENTS Foreword 8 MANAGEMENT 11

Chapter 1: Economy 12 Mining industry overview 14

Chapter 2: Mining 24 Directorate Overview 26 THE CONTRIBUTION OF NAMIBIA’S EXTRACTIVE RESOURCES TO THE ECONOMY 32 Weatherly’s Craig Thomas succeeds Rod Webster 54 Small Scale Mining 60 Skorpion Zinc – World Class Zinc 62 Epangelo Mining: Exploration, Mining and Beneficiation 66 GECKO NAMIBIA 72 Uranium Mining in Namibia 76 Bannerman Resources-Etango Uranium Project 80 ROSH PINAH ZINC CORPORATION 82 Rosh Pinah Overview 84

Chapter 2: Diamonds 86 DIAMOND 88 NDTC in the diamond pipeline 90 Debmarine Namibia 94

Chapter 3: Geology 48

MINERAL AND ENERGY GUIDE NAMIBIA

Directorate Overview 98 Division of Engineering and Environmental Geology 102 Salt Pans in Namibia 103 Annual Report Strategic Environmental Management Plan (SEMP) for the Central Namib Uranium Province 2013 104 North River moves towards construction phase 108

Chapter 5: Safety 116 Advanced Solidifies Fire Suppression position in Namibia 118 International SOS: A one stop shop solution to the mining industry 120

Chapter 6: Financce & Tax 122 Namibia and Taxation: A Deloitte perspective 124 Standard Bank Namibia beckons mining investors 126 RMB: Redefining role in mining 128 DBN: Development coming of age 130 TAXATION AND INVESTMENT ISSUES IN MINING 134 6

Chapter 7: Petroleum 138 IRECTORATE OF PETROLEUM AFFAIRS 140 Industry fundamentals being called into question 142 DISTRIBUTION OF MAJOR COMMODITIES IN NAMIBIA 146

Chapter 8: Energy 148 Directorate Overview 150 Marenica Energy Ltd (“MEY”) 145 OPE 156 Erongo Red 160 Nampower 164 Rural electrification programme 169 Understanding the Namibia Energy Institute 170 Renewable Energy Technologies Financing 178 Career Prospects in Mines and Energy 190

Chapter 9: Training 82 25 YEARS NAMIBIA and NIMT 182 Dundee 184 Unam: Southern Campus, Keetmanshop 188

Chapter 10: Legislation 192 Air Namibia, among Africa’s finest 194 NAMDEB-THE PRIDE OF NAMIBIA’S MININ 198 Telecom Namibia 200 Sustainable Development 203

ADVERTISERS’ INDEX Vivo Energy Namibia Walvis Bay Salt Holdings Old Mutual Manica Reptile B2Gold B2Gold Lubrication Specialists ENGEN NAMIBIA DBN AREVA Total RMB Navachab SOS Prevention Works Namibia Deloitte Dundee Dundee UNAM SSC

Intro Intro 5 23 67 68 70 93 75 115 129 132 145 152 163 177 184 186 188 Outro

MINERAL AND ENERGY GUIDE NAMIBIA

• • • • • • • • • • • • • • • • • • • •

Foreword

he Ministry of Mines and Energy was established to take custody of Namibia’s rich endowment of mineral and energy resources and to create an environment in which the mineral, energy, and geological resources contribute to the country’s socio-economic development. The Ministry regulates monitors and controls the mining and energy sectors through the relevant pieces of legislation and administers these legislations in order to ensure that our resources are protected. The mining industry continues to be a strong pillar of Namibia’s economy, the industry contributed N$23 Billion export earnings and N$1.4 billion was collected for royalties for the benefit of the State Revenue Fund during 2014. This is expected to increase with projected contributions from new mines that are coming on stream. I am pleased to note that the 2014 Report by Fraser Institute, a Canadian survey Institute, revealed that Namibia immerged in 2014 as the most attractive investment destination in Africa, followed by Botswana and ranked 25th position globally, out of the 122 jurisdictions that were surveyed. 30 African Countries participated. This is no mean achievement and it is a clear testimony that the Ministry’s efforts in conjunction with other Government organisations and private sector to ensure that Namibia becomes the desired investment destination, have paid off.

MINERAL AND ENERGY GUIDE NAMIBIA

The Ministry will not become lethargic but will continue to work hard in conjunction with the Chamber of Mines and all stakeholders to maintain this prestigious World recognition and market Namibia through various national, regional and international fora’s such as the Mining Indaba (Cape Town), Africa Down Under (Perth), Prospectors and Developers Association of Canada (Toronto) and many similar promotion and conference platforms. This publication is one such promotion platform, where we showcase Namibia’s resources and stakeholders. The Ministry has been reviewing the Minerals (Prospecting and Mining) Act. No 33 of 1992 to make it more responsive to current conditions and developments in the sector. The Minerals Bill including the Regulations will be finalized very soon with technical assistance form the Common Wealth Secretariat to create an enabling environment that would benefit both the industry and the country. I fully agree that transparency and stakeholder consultation is a requirement for successful policy formulation and therefore we will continue to engage all stakeholders for their inputs. Just in 2014, the mining industry is experiencing unprecedented growth with three new mines, Husab Uranium Mine, Otjikoto Gold Mine and Tshcudi Copper Mine, currently being developed, two of which have started production. The Husab Uranium mine is expected to come into production in 2016 and is billed

Minister of Mines and Energy: Hon. Obeth M. Kandjoze to become the second largest uranium mine in the World. The Otjikoto gold mine is the second gold mine in Namibia and went in production in December 2014. The new Tschudi copper mine is expected to come into production this year. This is indeed growing the cake with job creation and broadening of the tax base for the fiscus. The mine safety performance improved immensely with zero mine fatalities recorded during 2014 while the industry managed to lessen their lost time injuries. The Ministry will make efforts to maintain that momentum to ensure that the enlarged industry is adequately regulated to uphold the safety record. The indispensable technology calls for adequate resources to efficiently regulate the sector. In this regard, the Ministry needs to urgently, fill all vacant positions to ensure that regular inspections are conducted timely on advanced exploration projects as well as mining operations. This will ensure that licence holders operate in full compliance with the Minerals (Prospecting and Mining) Act, 33 of 1992 and the Safety Regulations. The Ministry has been tasked with implementing the Joint Value Addition responsibility under NDP4 as well as and conducting an in-depth analysis on the beneficiation possibilities for 8

Namibia’s key mineral commodities and identify opportunities for local value addition and further beneficiation of minerals, I am pleased to inform this august house that the process is progressing well. The Ministry is required to conclude the process and develop a Mineral Beneficiation Strategy for Namibia during the 2015/2016 financial year. Resources will be required to visit various manufacturing plants in selected countries to investigate policy options that Namibia needs to adopt in order to achieve the desired industrialisation through Joint Value Addition and beneficiation in line with NDP4 goals and Vision 2030. The Ministry is setting up a dimension stone and semi-precious stone processing facility in Khorixas, Kunene Region for the benefit of small scale miners. Approximately 15 miners will be employed at the facility once completed. The construction of the facility is in its final phase. In 2014 the Ministry adopted the FlexiCadastre system, a mineral titles management system adopted by leading mining companies and governments worldwide. The Flexi Cadastre system is critical for our day to day activities in order to manage mineral rights efficiently and thus contribute to transparency and effective regulation of the mining industry. The Geological Survey of Namibia is our National Institution entrusted with management and research of Namibia’s geology. The institution has once again continued to enhance geoscientific knowledge and awareness of Namibia’s geological resources. Through dissemination of quality research and development activities the Geological Survey of Namibia facilitates the search for mineral resources, geological engineering, land use planning and sustainable development with due regard to the environment. The institution has a high international status, its director continues to serve as president of the Organisation of African Geological Surveys, and many staff members are represented in national and international bodies. Geology underlies everything! As one of its core functions, the Geological Survey of Namibia therefore provides updated detailed geological map data to its stakeholders.

The minerals database is also constantly growing and is used by many potential investors. No wonder Namibia was named the top-ranking mining investment destination in Africa by the Canadian Frazer Institute’s 2014 global survey, singling out the Geological Survey of Namibia as one of the best and most cooperative geological surveys in the world! The regional geochemical sampling programme continues as well and is set to provide valuable information for environmental management and exploration. The report for the assessment of the environmental risk potential work of 16 abandoned mine 9

Our Strategic Environmental Management Plan (SEMP) of the Namibian Uranium Province continue to provide guidance with regard to sustainable development of Namibia’s uranium resources. The Geological Survey’s National Earth Science Museum continues to educate the Namibian public, especially young learners, about the importance of geosciences. Every year the museum participates in open days like the National Heritage Week, which fosters interest in geosciences. In addition several collaborative projects with international institutions have resulted in the discovery of new fossil sites, which have put Namibia on the palaeontological map of the world. Diamonds plays a strategic role in the country’s economy. Diamond Revenue continues to be stable despite decreases in production onshore and this is largely due to increased efficiencies in mining tools and technology offshore and high diamond prices. It is thus compelling that the protection, monitoring and regulation of this industry remains one of our key strategic focus areas. It is thus, vital that the Ministry of Mines and Energy continue to have its eyes and ears on the ground at the source where diamonds are being recovered, through our diamond inspectors and other Government agencies such as the Protected Resources Unit of the Namibian Police and Customs, to ensure that theft and smuggling of this product is kept at a negligible minimum. Given the concentrated value in each given carat, our presence in the field and our element of surprise is vital and cannot be over emphasized. The diamond industry is facing other threats in the international market that are beyond our control. Liquidity has been very tight in places like India where the bulk of the world’s diamonds are cut and polished and the precarious economic situation in the USA where more than 50% of the world’s diamonds are consumed gives us reason for caution. Namibia shall continue with rural electrification programme, to ensure that electricity to public and private infrastructures in rural areas is provided. During 2014/15 financial year 68 public institutions, 370 households and business centres have been electrified countrywide. An amount of N$ 160 million was budgeted for 2014/2015 rural electrification programme, whereby N$ 100 million of that amount was utilized for the upgrading of overloaded distribution grid network in the Regional Electricity Distribution (REDs) areas. In terms of power generation, the Baynes Hydro Power project has reached a significant stage, namely the completion of the Techno-economic studies and acceptance by the Permanent Join Technical Commission (PJTC). Namibia through the Ministry is continuing to supporting the use of Renewable Energy Technologies to provide energy to the remote public institutions throughout the country. Four (4) schools in the Kunene region were electrified with containerised solar systems under the 2014/2015 financial year. The Gam

MINERAL AND ENERGY GUIDE NAMIBIA

The National Airborne Geophysical Surveys programme has added an additional 19,500 line-kilometres of electromagnetic data to the national airborne geophysical data base to improve the knowledge and understanding of the Sub-surface Namibian geology below the Kalahari sand cover as well as making Namibia even more attractive to local and international exploration companies.

sites in the Erongo region was finalized.

settlement in the Otjozondjupa region was supplied with a Solar PV/diesel hybrid system and electrical networks system as such 216 households were electrified. The Ministry of Mines and Energy has also expanded the battery capacity of Tsumkwe solar Photovoltaic/diesel hybrid system in the Otjozondjupa region. Through the Solar Revolving Fund loan scheme, 564 solar systems were financed to an amount of N$15 million up to January 2015. The demand still remains high for solar systems, especially for communities living in off-grid areas. The Concentrated Solar Power Technology Transfer Namibia project activities started in 2014, and are to be concluded by 2016 with full feasibility study for the facilitation of the first Concentrated Solar Power plant in the country In 2014 the Renewable Energy and Energy Efficiency Institute was transformed into the Namibia Energy Institute (NEI) to include the other energy sectors such as oil and gas, electricity and nuclear sciences. A further N$5.78 million is budgeted for to continue with the transformation.

Oversight of Strategic storage facilities construction We have since begun to implement the construction of the national strategic fuel storage pipeline and marine jetty facilities in Walvis Bay in order to provide the country with security of supply of petroleum products in line with our White Paper on Energy Policy. The Ministry of Mines and Energy is desirous to fully take charge of this project in line with our mandate and expertise that we possess inside the Ministry. We are currently sorting out the last remaining funding issues between the National Energy Fund, Development Bank of Namibia and the African Development Bank before construction can commence. Dear reader, let me call on all Namibians to explore and invest in the countryâ&#x20AC;&#x2122;s economy. The Government of The Republic of Namibia has created conducive environments through sound investment frameworks. As regulators, our doors are always open for you when you need assistance in the process of investing in the country. Together, we can make Namibia an industrialized country even in our lifetime. I thank you!!!

In order to ensure reliable and cost reflective energy, the National Energy Fund has paid an amount of N$ 111.5 million for the fuel road subsidy to the rural/far outlying areas. NEF received an amount of N$ 382.4 million for the slate cumulative over recovery from the Oil Companies during the period under review. The fund collected an amount of N$ 268.5 million from levies to cater for the construction of the Strategic Oil Storage Facility for 2014/2015 financial year. NEF will continue to subsidize the energy prices and provide financial support to energy projects for the benefit of Namibian consumers. In addition, the NEF will supplement the energy budget to develop energy infrastructures and ensuring that the National Energy mix reacts positively to global energy turmoil.

MINERAL AND ENERGY GUIDE NAMIBIA

Let me to reiterate that reliable and cost affordable energy remains the ministryâ&#x20AC;&#x2122;s priority in order to uplift the socioeconomic conditions of fellow Namibians. Moving forward an increased capital injection is essential for new and existing energy projects. The Ministry of Mines and Energy will continue to issue exploration licenses to deserving applicants and will continue to encourage partnerships between International Oil Companies, local entrepreneurs and NamCor as part of local empowerment and value creation. We have also started to deal with those licensees not honouring their financial and work obligations towards the Namibian Government so that we remain with only those that have proven to be robust and resilient in this high risk industry. More importantly we are going to start with regulatory reforms in the oil and gas sector in order to meet the demands of the changing environment and to improve transparency in the allocation of petroleum rights. Although it is viewed as progressive and positive in the international market it was put in place more than twenty years ago and we need to modernise it and make it more effective to meet the above stated objectives.

MANAGEMENT

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 1 | Economy

Chapter 1 Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 1 | Economy

Namibia Mining Industry Overview Major Mines Namibia is a world-class producer of gem quality rough diamonds, uranium oxide, special high-grade zinc, gold bullion, blister copper, and lead concentrate as well a salt and dimension stone. A number of world-class companies using state-of-the-art mining and processing technologies are members of the Chamber. Rio Tinto plc and Vedanta plc mining companies, produce uranium oxide at Rossing mine and special high-grade zinc at the Skorpion mine and refinery respectively. Paladin Energy's Langer Heinrich Uranium mine is in full production and achieved nameplate production sustainably in 2013. The world's number one diamond producer, De Beers, works with the Government of the Republic of Namibia (GRN) through Namdeb Holdings in a 50:50 joint venture, producing some of the world's finest gem diamonds. Namdeb's output increasingly comes from under the sea, thanks to the technical expertise of Debmarine Namibia. Further value addition is boosted by about 11 diamond cutting and manufacturing factories that utilise about 16 percent of diamond production by Namdeb Holdings.

Number of Mines: Operating & Under Construction Company Namdeb Diamond Corporation (Pty) Ltd

Debmarine Namibia Rรถssing Uranium Limited Skorpion Mining Company QKR Namibia Minerals Holdings Rosh Pinah Zinc Corporation Langer Heinrich Uranium Ltd Salt & Chemicals (Pty) Ltd Weatherly Mining Namibia

MINERAL AND ENERGY GUIDE NAMIBIA

OHORONGO Cement (Pty) Ltd Salt Company (Pty) Ltd African Huaxia Mining (Pty) Ltd AREVA Resources Namibia Okorusu Fluorspar Otjozondu Mining (Pty) Ltd Mines Under Construction / Ramping Up Swakop Uranium (Proprietary) Limited Weatherly Mining Namibia B2Gold Namibia (Pty) Limited

Operation/Mine Northern Coastal Mines (E-Bay) Southern Coastal Mines Orange River Mines - Sendelingsdrif - Deberas Off Shore Operations Rรถssing Mine Skorpion Zinc Mine Navachab Gold Mine Rosh Pinah Zinc Mine Langer Heinrich Uranium Mine Walvis Bay Salt Pans Otjihase Copper Mine Matchless Copper Mine Ohorongo Quarry (ML 153) Swakopmund Salt Pans Swartmoder Copper Mine Trekkopje Mine (on Care & Maintenance) Okorusu Mine (On Care & Maintenance) Otjozondu Manganese Mine Total

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 18

Husab Uranium Mine Tschudi Copper Mine Otjikoto Gold Mine Total

1 2 3 3

1 2 3

QKR Namibia produces gold bullion at Navachab Mine near Karibib. Rosh Pinah Zinc Corporation produces zinc and lead concentrates at Rosh Pinah. Weatherly Mining Namibia operates the copper mines and Dundee Precious Metals Tsumeb produces blister copper at the Tsumeb smelter, from imported copper concentrates.

Chapter 1 | Economy Mines in the Pipeline & Non Chamber Members Company

Mines in Pipeline

Craton Mining & Exploration (Pty) Ltd Kombat Copper Inc.

Omitiomire Copper Project (ML 183) Kombat Mine (5 MLs) Dordabis Iron Ore Project (ML granted in September 2014) Namib Lead Mine (ML application pending) Etango Uranium Projects (ML 161) Norasa Uranium Project: Valencia Project (ML 149) Namibplaas Project (EPL3638) Zhonghe Uranium Project (ML 171) Shiyela Iron Ore Project (ML 176) Omahola & Tubas Sand Projects Gergarub Zinc Project Total

Lodestone Namibia (Pty) Ltd North River Resources Bannerman Mining Resources Valencia Uranium (Pty) Ltd

Zhonghe Resources Namibia Reptile Uranium Namibia (Pty) Ltd Rosh Pinah Zinc / Skorpion Zinc Mines not Members of CoM Purity Manganese (Pty) Ltd Namibia Marble and Granite Several other Dimension Stone Companies Small Scale Mining Companies

Number 1 2 3 4 5 6

7 8 9 10 10

Purity Manganese Mine Namagra Quarry Dimension Stone Quarries SSM operations for slate, blue lace agates and several precious stones

1 2 2,3,â&#x20AC;Ś Several

The mining industry continues to make reinvestments into the sector, as evidenced by the commissioning of Namdebâ&#x20AC;&#x2122;s Sendelingsdrif mine and their state of the art sorting facility, the new Red Area Complex on 7 November, 2014. Furthermore, Vedanta announced its decision to convert the Skorpion zinc refinery to process zinc sulphide concentrates at an investment of N$1.6 billion.

Mining industry generated > N$21.6 bn in revenue during 2014

Exploration Expenditure 2%

Mining Industry Contribution (N$ bn) 2.824 (13%)

Exploration Expenditure

0.454 (2%)

Dividends to GRN

0.963 (4%)

PAYE

0.641 (3%)

Profits Tax & Royalties paid

3.393 (16%)

Dividends to other Shareholders

1.479 (7%)

Procurement (Namibian Spend)

7.255 (34%)

Other Operating Expenditure

4.395 (20%)

CSR

0.122 (1%)

Dividends to GRN 4% Other Operating Expenditure 20%

Wages & Salaries 13%

PAYE 3%

Profits Taxes & Royalties paid 16% Procurement 34%

Dividends to other Shareholders 7%

Expenditure on Skills & Development 0.086 (<1%) Total

21.612

Source: Chamber of Mines of Namibia

Total Revenue to GRN:N$5 billion 15

MINERAL AND ENERGY GUIDE NAMIBIA

Wages & Salaries (Net)

Chapter 1 | Economy Highlights in 2014 1. Mining Industry recorded zero fatalities and posted major improvements in safety stats. 2. Mining contributed 13% to GDP in 2014, however the industry contracted by 4.6% in terms of real value added (NSA preliminary statistics). 3. Bannerman awarded contracts to construct & operate Etango Heap Leach Demonstration Plant in September 2014. 4. AngloGold Ashanti announced the decision to sell Navachab mine on 30 April 2013. The sale was approved by Namibia Competition Commission on 28 May, 2014, to Guinea Fowl Investments Twenty Six, owned by the British company QKR Corporation Limited. 5. Epangelo acquired 7.5% shareholding in Navachab Mine (in partnership with QKR Namibia Minerals Holdings) on 22 October, 2014. 6. Commissioning of mining operations at Husab on 8 May, 2014. 7. Commissioning of new Sendelingsdrif diamond mine and new Red Area Complex on 7 November, 2014.

New Mines & Development Projects The development of the new mines continue to reach significant milestones, with two of them already in production. B2Gold’s Otjikoto gold mine produced their first kilogram of gold on 11 December, 2014 and are set to ramp up to full production towards the end of 2015. Weatherly’s Tschudi mine produced the first copper cathode in the history of Namibia in February 2015, paving the way for possible investment in further down-stream value addition activities. The construction of Swakop Uranium’s Husab mine remains on track and is expected to come into to production at the end of 2016, with ramp up to full production at the end of 2017.

Highlights in 2014 (cont.)

MINERAL AND ENERGY GUIDE NAMIBIA

9. 10.

11. 12. 13. 14.

14 November, 2014 – Vedanta Resources Plc approved a US$782 million (N$9.4 billion) investment to develop an open pit zinc mine in Gamsberg, South Africa. This investment includes the conversion of the Skorpion Zinc Refinery in the South of Namibia U$152 million(N$1.6 billion). New Otjikoto gold mine produced its first kilogram of gold on 11 December, 2014. Upstream Value Addition: When mining grows, input and service industries also grow. The N$2.9 billion sulphuric acid plant by DPMT at the Tsumeb smelter is expected to come into production mid-June 2015. Uranium price dropped to a nine year low of U$28.5/lb in June 2014. Rössing retrenched 204 workers in August, 2014 and Rosh Pinah Zinc Corporation retrenched 126 workers in May, 2014. Okorusu mine was placed on care and maintenance on 28th October, 2014. 407 workers were retrenched. Two weeks strike at Namdeb, in August 2014, cost the company & GRN N$140 million in lost revenue (N$10 million a day, of which GRN lost N$8 million and Namdeb N$2 million.) 16

Chapter 1 | Economy

Summary of Mining Industry Performance in 2014 • Turnover > N$21.61billion (Turnover in 2013, N$20.93 billion) • Wages and salaries > N$3.46 billion, excludes Swakop Uranium (Wages and Salaries in 2013, N$3.14 billion) • Fixed investment > N$17.26 billion (Fixed investment in 2013, N$8.53 billion) • Exploration spending by operating mines > N$454.7 million (Exploration spending by operating mines in 2013, N$212.3 million) • Exploration spending by exploration companies & mine development companies > N$170.7 million, excludes Swakop Uranium (Exploration spending by exploration companies and mine development companies in 2013, N$450 million) • Profits tax paid > N$2.1 billion (Profits tax paid in 2013, N$1.64 billion) • Royalties paid >N$1.29 billion (Royalties paid in 2013, N$1.12 billion)

Dundee Precious Metals Tsumeb (DPMT), which owns Namibia’s copper smelter, is constructing a sulphuric acid plant that will utilise off-gases from the smelter operations to produce sulphuric acid. The plant is scheduled to come into production in July 2015 and will produce 340,000 tonnes of sulphuric acid per annum. Through offtake agreements with Rössing and Tschudi, DPMT has already committed to sell the planned production to these two mines. This positive development verifies that when the mining industry grows, the up-stream and services sector also expands, through which spin-offs are created in other sectors of the Namibian economy. In the second half of 2014, Craton Mining & Exploration and Lodestone Namibia received mining licences to develop the Omitiomire copper oxide and Dordabis iron ore projects respectively.

Summary of Mining Industry Performance in 2014 (cont.)

MINERAL AND ENERGY GUIDE NAMIBIA

• Dividends paid to GRN = N$963 million • Total taxes paid > N$3.39 billion (Total taxes paid in 2013, N$2.76 billion) • Total taxes & dividends paid > N$4.35 billion (Total taxes and dividends paid in 2013, N$3.26billion) • Procurement (Namibian Spend) > N$7.255 billion • Contribution to CSR related activities > N$123 million • Total employment 17,770 (7,903 permanent employees, 947 temporary employees, and 8,920 contractors )

Chapter 1 | Economy Mining contribution to GDP 20.0

Other mining

18.0

Other Mining and Quarrying

16.0

Metal Ores

14.0

12.6%

Uranium

13%

12.0 Diamond mining 10.0 8.0 6.0 4.0 2.0 0.0 1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

Source: Namibia Statistics Agency

Gross Domestic Product Preliminary statistics produced from the Namibia Statistics Agency (NSA) show that the mining sector made a direct contribution of 13% to GDP in 2014, up from 12.6% in 2013. It must be noted that the National Accounts have created new categories for mining, namely; diamonds; uranium; metal ores and other mining and quarrying. Previously, mining consisted of two categories; diamonds and other mining. In real terms, the mining industry contracted by 4.6 percent. This contraction is as a result of reduced output from the mining sector during the year, particularly for uranium. Commodity prices remained subdued during 2014.Uranium prices bottomed out at U$28.5/lb towards the end of June 2014. The depressed market caused uranium mines to scale back on production, resulting in a reduction of yellow cake output. Once again, the diamond sub sector flourished posting a growth of 11.1 percent in real value added and posted record production levels. This growth was not enough to offset the contractions posted by uranium and other mining and quarrying, which contracted by 9.9 percent and 42.7 percent respectively.

Comparison of GDP contribution by Primary Industries 18.0

Mining

16.0

Agriculture Fishing

MINERAL AND ENERGY GUIDE NAMIBIA

14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2004

2005

2006

2007

2008

2009

2010

Source: Namibia Statistics Agency

2011

2012

2013

2014

Chapter 1 | Economy Fixed Investment (current prices N$m) 20 000 18 000

Government

16 000

Mining

14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2000

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

Source: Namibia Statistics Agency

Namibia is confident, however, that the industry will indeed expand within the next five years, with B2Goldâ&#x20AC;&#x2122;s Otjikoto mine already in production, and the scheduled start-ups of the Husab and Tschudi mines. Namibia predicts that the direct contribution by mining will increase to 17% by 2017/18. Chamber of Mines statistics show that Namibiaâ&#x20AC;&#x2122;s mining industry generated a revenue of N$21.61 billion in 2014, a 3.25 percent increase from 2013 which totalled N$20.93 billion. Total revenue from non-diamond mining reached N$ 10.76 billion, which includes revenue from zinc refining and diamond mining earned N$10.87 billion.

Mining Share of Exports Non-mineral exports 49% 46%

60%

49%

46%

51%

54%

48%

52%

51%

60%

40%

'02

'03

54%

46%

49%

46%

47%

54%

51%

54%

53%

Mineral Exports

'04

'05

'06

'07

Source: Namibia Statistics Agency

'08

'09

'10

'11

'12

'13

MINERAL AND ENERGY GUIDE NAMIBIA

54%

40%

Chapter 1 | Economy

Total Exploration expenditure (N$m) 900 800 700 600 500 400 300 200 100 0 '95

'96

'97

'98

'99 2000 '01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

Source: Namibia Statistics Agency and Chamber of Mines of Namibia

Fixed Investment It needs to be noted, that although the mining sector contracted in real terms, significant investments by the industry continued to occur in 2014. Chamber statistics show that fixed investment doubled from N$8.5 billion in 2013 to N$17.26 billion in 2014. Of this, Swakop Uranium injected approximately N$11 billion into the Namibian economy, which equates to 7.5 percent of Namibia’s nominal GDP. The development of three new mines in Namibia has produced significant economic gains, through job creation and the procurement of local goods and services.

Employment in Mining sector at end 2014 0

500

1000

1500

2000

2500

3000

3500

4000

4500

AREVA DBMN ZHONGHE RESOURCES NAMDEB HOLDINGS LANGER HEINRICH NAVACHAB OHORONGO

 Total employment: 17,770

MINERAL AND ENERGY GUIDE NAMIBIA

ROSH PINAH RÖSSING URANIUM

 With a multiplier effect of 7, mining provided directly & indirectly jobs to some 124,390 people

SALT & CHEMICALS SALT COMPANY SAMICOR SKORPION WEATHERLY MINING B2GOLD

Permanent Employment

BANNERMAN

Temporary Employment

CRATON

Contractors

GECKO

Expatriates

REPTILE URANIUM SWAKOP URANIUM VALENCIA NIMT

Source: Chamber of Mines of Namibia

Chapter 1 | Economy

Permanent Employment Vs Expatriates 9

WEATHERLY

239

B2GOLD

Industry employed 7,903 permanent Employees, out of which 297 were Expatriates.

240

SKORPION ZINC

698

ROSH PINAH CORPORATION NAVACHAB DUNDEE PRECIOUS METALS TSUMEB

385

448

LANGER HEINRICH URANIUM

96.2 %Namibians, 3.8% Expats (Excludes Swakop Uranium)

470

318

Expatriates

RÖSSING

850 133

DEBMARINE NAMIBIA

Namibians

742

NAMDEB

1 744

100

200

300

400

500

600

700

800

900

1000 1100 1200 1300 1400 1500 1600

Source: Chamber of Mines of Namibia

Employment At the end of 2014, mines operating in Namibia directly employed 7,903 permanent employees, 947 temporary employees and 8,920 contractors. These Chamber members collectively paid out more than N$3.46 billion in wages and salaries during the course of last year.

Comparison of Namibia’s Investment Attractiveness Index with SADC Countries 2014

2013

2012

2011

2010

Namibia

25/122

34/ 112

30/ 96

69/ 93

34/ 79

Botswana

26/122

24/ 112

12/ 96

11/ 93

14/ 79

South Africa

64/122

53/ 112

67/ 96

52/ 93

60/ 79

Angola

93/122

97/ 112

n/a

Zimbabwe

100/122

96/ 112

88/ 96

74/ 93

57/ 79

Source: Fraser Institute 2014 Survey of Mining Companies

MINERAL AND ENERGY GUIDE NAMIBIA

Country

Chapter 1 | Economy Skills Chamber members spent some N$93.8 million on skills development in 2014, an increase of 60% from the N$58.5 million spent in 2013. They also awarded a total of 40 new bursaries in 2014 for tertiary education at institutions in Namibia and South Africa, as well as vocational training at the Namibian Institute of Mining and Technology (NIMT).

Taxation In 2014/15 the Ministry of Finance (MoF) received profits taxes from the mining industry totalling N$1.97 billion from diamond mining and N$71.2 million from other mining according to their preliminary figures. Diamond royalty tax contributed N$734.8 million and royalties from other minerals provided N$117.4 million to the fiscus. Total revenue received from mining in 2014/15 amounted to N$3.6 billion, a significant increase from the N$1.45 billion collected in the previous financial year. According to statistics produced by the Chamber of Mines, in 2014 the mining industry paid out a total of N$3.39 billion in corporate taxes and royalties, a 22.8 percent increase from the 2013 total of N$2.76 billion.

Comparison of Namibiaâ&#x20AC;&#x2122;s PPI with SADC Countries Country

2014

2013

Botswana

13/122

Namibia

2011

2010

25/ 112 17/ 96

17/ 93

14/ 79

20/122

34/ 112 30/ 96

45/ 93

30/ 79

South Africa

66/122

64/ 112 64/ 96

54/ 93

67/ 79

Angola

75/122

108/ 112

n/a

Zimbabwe

115/122

106/ 112

91/ 96

74/ 93

71/ 79

Source: Fraser Institute 2014 Survey of

MINERAL AND ENERGY GUIDE NAMIBIA

Mining Companies

2012

Chapter 1 | Economy

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MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 Mining

Chapter 2 | Mining

DIRECTORATE OF MINES Mining Commissioner Mr. Erasmus Shivolo Tel: +264-61- 284 8111 Fax: +264-61-238366 E-mail: eshivolo@mme.gov.na

OVERVIEW The Directorate of Mines endeavours to promote the optimal exploitation of Namibia’s mineral resources and integrate the mining industry with other sectors of the economy for the socio-economic development of the country. It is headed by a Commissioner of Mines. The Mines Directorate comprises of the following divisions: •

Mineral Rights & Resources Development

•

Mine Safety & Services

•

Controlled Minerals & Minerals Development

•

Small Scale Mining

In addition to these there is a Minerals Ancillary Rights Commission committee.

MINERAL RIGHTS & RESOURCES DEVELOPMENT The division Accepts and evaluates the following Mineral Licence applications: Non-Exclusive Prospecting Licences (NEPL): any person may Apply for a non-exclusive Prospecting licence, provided, in the case of a natural person, such person has reached the age of 18 years. The licence is valid for 6 months and its non renewable.

MINERAL AND ENERGY GUIDE NAMIBIA

• •

Mining Claims (MC): Available only to Namibian citizens for the development of small-scale mining. Mining claims are valid for 3 years and 2-year extension periods are possible provided that the claim is being developed or worked. Up to a maximum of ten claims can be held at any one time. Reconnaissance Licence (RL): Designed for regional, mainly remotely sensing exploration, a reconnaissance licence is valid for six months on a non-renewable basis. This licence facilitates the identification of exploration targets

•

Exclusive Prospecting Licences (EPL): This 3-year licence allows systematic prospecting in areas of up to 1,000 km². It gives exclusive exploration rights to the land and may be extended twice for two-year periods if demonstrable progress is shown. Renewals beyond seven years require special approval from the Minister.

•

Mineral Deposit Retention Licence (MDRL): This allows an exploration company in certain circumstances to retain tenure on a prospecting licence, mining licence or mining claim without mining obligations. It is valid for five years, with two-year renewal periods. The licence holder must, however, meet work and expenditure obligations and submit regular project reviews.

•

Mining Licences (ML): This gives the holder the exclusive mining right in the licence area for a period of 25 years or the life of the mine, with renewals valid for 15-year periods. The holder is required to demonstrate the financial and technical ability to develop and operate a mine.

26 26

Chapter 2 | Mining SECTION B – PARTICULARS OF LICENCE HOLDER (i) Natural person Full names Nationality Telephone

Date of birth Facsimile

Residential address

Postal address

(ii) Company Full name Registration number Telephone Registered address

Registration date Facsimile Principal place of business

Directors full names

Directors nationality

REPUBLIC OF NAMIBIA

MINISTRY OF MINES AND ENERGY APPLICATION FOR AMENDMENT OF MINERAL LICENCE HOLDER PARTICULARS MINERALS (PROSPECTING & MINING) ACT, 1992, SECTION 50(h) (MINIMUM REQUIREMENT) Notes: (a) If a Mineral Licence is to be (i) transferred, (ii) the interest therein granted, ceded or assigned or (iii) joined by any person as a joint holder, a separate application for Ministerial approval must be submitted. (b) Where applicable, the licence holder must enter into a new Environmental Contract.

SECTION A – PARTICULARS OF MINERAL LICENCE Mineral Licence type Mineral Licence No. * Date issued Expiry date Informal name of area Application date * Current Mineral Licence must accompany application. For Office Use Application fee N$ Licence fee increase * N$ Receipt no. FlexiCadastre sign date • In case of increase in licence area only

Share capital (N$) % Share * Full names

Associated companies

Nationality

Status

Date stamp * Holders of more than 5% of shares only (iii)

Accredited agent 2

Application Form For Amendment Of Mineral Licence Transfers/Joint ventures (JV): Applicable to all mineral licences except the NEPL.

•

Amendments: involves addition of commodity group and increase/decrease in area size. Applicable to all mineral licences except the NEPL,

•

Export permits: issued in respect of mineral export outside of Namibia

•

High Value Mineral permit (HVM): the permit is to sell and buy minerals.

NOTE: Namibia currently has arguably the cheapest application fees in southern Africa, Whereas some countries in the region charge up to N$500 000 for a diamond mining license, Namibia charges barely 10% of that amount.

Mining Commissioner’s Advice to Investors: Due to our low application rates, Namibia is often overwhelmed by the amount of submissions tendered. Many view an EPL as a cash cow yet it is a liability because of the exploration costs involved. We have often seen investors spending over N$500 million on an EPL yet they do not have a mine. Many investors are lured by EPL holders into exploration activities on condition that the EPL holder receives a huge lump sum in exchange for 90% of the mine. The investor pays the holder a lump sum, pays hundreds of millions for exploration and gives a percentage of the mine to the holder. In the event that no mineral deposits are discovered it is often the investor who cries foul and the EPL holder walks away happily. We advise investors to conduct due diligence. Put money on the ground to establish value first before committing to anything. After value is established, you can all still sell it to the bigger entities in the industry and everyone walks away satisfied.

27 27

MINERAL AND ENERGY GUIDE NAMIBIA

•

Chapter 2 | Mining

* Furnish details (if any) of any matter which in the opinion of the applicant is relevant to the application:

REPUBLIC OF NAMIBIA MINISTRY OF MINES AND ENERGY

……………………………………………………………………………………………………………………………………………………………….

OFFICE OF THE MINING COMMISSIONER

……………………………………………………………………………………………………………………………………………………………….

APPLICATION FOR A NON-EXCLUSIVE PROSPECTING LICENCE (NATURAL PERSON)

……………………………………………………………………………………………………………………………………………………………….

(Required in terms of section 18 of the Minerals (Prospecting and Mining) Act, 33 of 1992)

* (Append separate sheet if necessary) Certified copies of the following documents must be attached to this application:

PLEASE TICK FOR THE APPROPRIATE APPLICATION!! NEW APPLICATION: _________

RENEWAL APPLICATION: _________

Proof of Date of Birth, Nationality, Passport and/or ID number, Permanent/Temporary Residence/Work Permit and, in respect of an applicant represented by an accredited agent, the written acceptance of such designation by such agent and the written approval of the Commissioner of such designation.

NEPL No.: ____________

(RENEWAL APPLICATION ONLY)

The prescribed licence fee of N$ 50-00 must be attached to this application (cheques to be paid in favour of the Commissioner).

Full Name of Applicant: ………………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………………………………. Nationality: ……………………………………………………….. Date of Birth: ……………………………………………………………………...

I declare to the best of my knowledge that the information in this application is true and correct.

Passport /Identification Number: ……………………………………………………………………………………………………………………….. Permanent/Temporary Residence/Work Permit No.: …………………………………….. Date of Expiry: …………………….………………… Postal Address: ………………………………………………………………………………………………………….………………………………..

________________________ SIGNATURE OF APPLICANT

……………………………………………………………………………………………………………………………………………………………….

________________________ FULL NAME OF APPLICANT

______________ DATE

Residential Address: ……………………………………………………………………………………………………………………………………...

Kindly note that in terms of the provisions of section 133(b) and (c) of the Minerals Act, No. 33 of 1992, that any person who:

………………………………………………………………………………………………………………………………………………………………. Tel No. (h): …………………………………… Tel No. (w): ……………………………. …………. Fax No.: ……………………………………...

In the case of a person who is not resident in Namibia and who is required to be represented by an approved accredited agent: Full Name of Accredited Agent: ………………………………………………………………………………………………………………………… Residential Address: ……………………………………………………………………………………………………………………………………...

makes or causes to be made in connection with the provisions of the Act any statement which is false or misleading knowing it to be false or misleading; or

submits or causes to be submitted in connection with any application or any notice, report, return or statement issued or given under any provision of the Act or the terms and conditions of any non-exclusive prospecting licence, mining claim or mineral licence, any document, information or particulars which are false or misleading knowing them to be false or misleading;

shall be guilty of a criminal offence and on conviction liable to a fine not exceeding N$ 8 000-00 or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.

………………………………………………………………………………………………………………………………………………………………. Postal Address: ………………………………………………………………………………………………………….……………………………….. ………………………………………………………………………………………………………………………………………………………………. Tel No. (h): …………………………………… Tel No. (w): ……………………………………….. Fax No.: ……………………………………...

In the case of a person who has been convicted of an offence by a court of law in respect of which the person was sentenced to imprisonment, whether suspended or not, without the option of a fine: Date of Conviction: ………………………………………………………. Place of Conviction: ……………………………………………………. * Nature of Offence: ……………………………………………………… * Sentence: ……………………………………………………………...

* (Append separate sheet if necessary)

Application Form For A Non-Exclusive Prospecting Licence(Natural Person)

Mineral Rights

MINERAL AND ENERGY GUIDE NAMIBIA

A Mining Claim is for Namibian citizens or Namibian-owned companies only for the development of small-scale mines, valid for 3 years, with a 2-year renewal period. A person can have a maximum number of 10 claims at the same area or spread out in Namibia. A Mining Claim application costs N$50. The holder of a Mining Claim is allowed to mine/extract minerals from the area. Small-scale miners normally exploit the following mineral groups: dimension stones, semi-precious stones and industrial minerals. Other groups like precious stones, base and rare metals, precious metals, nuclear fuels and non-nuclear fuels are not allowed, and, on the other hand, mining these commodities requires high labour and capital intensity, which is beyond the reach of small-scale miners.

MINE SAFETY & SERVICES Its main regulatory functions are: •

To conduct inspections in or at mining operations in Namibia in respect of the safety of employees in the mining industry, recommend remedial actions, provision of advices to Mine Managers and advice the Minister of Mines and Energy on matters related to Safe Working Conditions in the Mining Industry in Namibia.

•

To conduct investigations related to Mine Accidents in Namibia and submission thereof to the Office of the Prosecutor General for decision making.

•

The Mine Safety and Services Division issues authority for Blasting Certificates for both Open Cast and Underground Mines in Namibia. The same Division is the custodian of Mine Survey Maps and assesses the applications for Accessory Work Permits.

•

It liaises with the Ministry of Labour and the Ministry of Health on matters related to the Health and Safety of Employees in the Mining Industry and serves on the Safety Committee of the Chamber of Mines of Namibia.

28 28

Chapter 2 | Mining

REPUBLIC OF NAMIBIA

Registration number Telephone Registered address

Registration date Facsimile Principal place of business

Directors full names

Directors nationality

MINISTRY OF MINES AND ENERGY RENEWAL APPLICATION FOR AN

Share capital (N$) % Share ** Full names

EXCLUSIVE PROSPECTING LICENCE

MINERALS (PROSPECTING & MINING) ACT, 1992, SECTIONS 68 & 72 (MINIMUM REQUIREMENT) Date

Nationality

Informal name of area

For Office Use Reference Deposit Receipt no. FlexiCadastre sign date

Associated companies

14/2/4/1/ N$

Status

Date stamp * Copy of Registration Certificate to be attached ** Holders of more than 5% of shares only (iii) Accredited agent * Full names Telephone Postal address

SECTION A – PARTICULARS OF APPLICANT (i) Natural person Full names Nationality *

Date of birth

Telephone

Facsimile

Residential address

Postal address

Facsimile Physical address

* All licence holders not resident in Namibia are required to (a) appoint an accredited agent in writing who (b) must accept the appointment in writing and (c) must be approved in writing by the Mining Commissioner. Copies of (a), (b) and (c) must be attached. A consultant to a licence holder may not act as accredited agent.

SECTION B – APPLICATION PARTICULARS * Copy of Identification Document or Passport to be attached

Date initially granted Period applied for *

Expiry date Initial size (Ha)

(ii) Company * Full name

Reduced size (Ha) ** * Maximum 2 years

Percentage reduction ** First renewal – maximum 75% of initial size Subsequent renewals – maximum 50% of currently valid size If no reduction is contemplated, reasons must be furnished

Mineral group(s) applied for 1 Base and rare metals 2 Dimension stone 3 Industrial minerals 4 Non-nuclear fuel

5 6 7 8

Nuclear fuel Precious metals Precious stones Semi-precious stones * If applicant is holder of reconnaissance licence over area applied for, reports referred to in Section 66(1)(d) must be attached.

SECTION C – LOCALITY (i) Locality * Map scale Magisterial district(s) Region(s) Regional division(s) (ii) No

Exploration target and mineralisation model 1:

List of farms covered by area applied for Name No

* Detailed locality plan to be attached

Name Exploration conducted prior to the period under review

Latitude

Longitude

Summary of exploration done in period under review* Description of exploration methods used Geological mapping Geochemical sampling Geophysical survey Drilling Geochemical analysis Bulk sampling

*In degrees/minutes/seconds or decimal degrees, accurate to eight (8) decimal places. GPS readings are not acceptable.

SECTION D – GEOLOGY OF AREA Concise geological description *

Expenditure

Renewal Application Form For An Exclusive Prospecting Licence Minerals (Prospecting & Mining) Act, 1992, Sections 68 & 72 (Minimum Requirement)

29 29

MINERAL AND ENERGY GUIDE NAMIBIA

(iii) Co-ordinates of area applied for * Label Latitude Longitude Label

Chapter 2 | Mining 2 licence type and number : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or registered number of mining claim : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and name of mine (if relevant) : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . situated on; private land, farm name and number : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or state land, area : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . registration division : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . magisterial district : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . region : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MINISTRY OF MINES AND ENERGY

APPLICATION FOR PERMISSION TO EXPORT MINERALS (required in terms of Section 127 of the Minerals (Prospecting and Mining) Act, 1992)

1. Application is hereby made by (tick applicable box) non-exclusive prospecting licence holder

mining claim holder

mineral licence holder

mineral dealer

foreign visitor

any other person

mode and route of transport : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . date(s) and/or period(s) of removal : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . customs exit point : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . state form of packaging : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................................................................................................... ...................................................................................

for sale or disposal

multiple consignment*

*only the holder of a mining claim or a mineral licence, or a dealer in minerals shall be entitled to obtain a multiple consignment permit.

4. Particulars of mineral(s) to be exported (tick applicable box) uncontrolled mineral(s)

controlled mineral(s)

I declare to the best of my knowledge that the information contained in this application is true and correct.

name of mineral(s) : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . mass or volume for single consignment : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . total estimated mass or volume for multiple consignment : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . nature; unprocessed form processed

_________________________ FULL NAME (In block letters)

form

value for single consignment (in N$ and foreign currency if relevant) : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . total estimated value for multiple consignment (in N$ and foreign currency if relevant) : . . . . . . . . . . . . . . . . . . . . . . .

Nationality : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

makes or causes to be made in connection with any provision of this Act any statement which is false or misleading knowing it to be false or misleading; or

submits or causes to be submitted in connection with any application or any notice, report, return or statement issued or given under any provision of this Act or the terms and conditions of any non-exclusive prospecting licence, mining claim or mineral licence, any document, information or particulars which are false or misleading knowing them to be false or misleading,

in case of Company, company registration No : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in case of Mineral Dealer, trading licence number (if any) : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Phone : . . . . . . . . . . . . . . . .

_______________________ DATE

Furthermore, note that in terms of the provisions of Section 133(b) and (c) of Act 33 of 1992, any person who :

full name : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . postal address : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Telephone and Fax: Code : . . . . . . . . . . .

_______________________ SIGNATURE

Kindly note that in terms of the Minerals (Prospecting and Mining) Act, 1992, contravention or failure to comply with the provisions of Section 127 (export of minerals or group of minerals) shall be guilty of an offence and on conviction be liable to a fine not exceeding N$20 000 and/or to imprisonment for a period not exceeding two years.

5. Particulars of applicant -

in case of Person, ID/Passport No : . . . . . . . . . . . . . . . .

In case of sale or disposal, state particulars of purchaser full name : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . postal address : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................................................ in case of person ID/Passport No : . . . . . . . . . . . . . . . . . . . . . . . .Nationality : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telephone and Fax number : Code : . . . . . . . . . . . Phone : . . . . . . . . . . . . . . . . . . . . . . . Fax No : . . . . . . . . . . . . . . . . state reason(s) for purchasing or acquisition (resale/manufacture) : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . if manufacture, state nature thereof : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................................................................................................... ...................................................................................

3. Indicate whether the application is for (tick applicable box) single consignment

If not for sale or disposal state reason(s) for removal : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . destination : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Application is hereby made to export mineral(s) (tick applicable box) for purposes other than sale or disposal

Particulars of the transport of mineral(s) -

shall be guilty of a criminal offence and on conviction liable to a fine not exceeding N$8 000 or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.

Fax No : . . . . . . . . . . . . . . . . . . . .

Particulars of property from which the mineral(s) is/are to be removed;

127app1.doc

Application Form For Permission To Export Minerals

CONTROLLED MINERALS & MINERALS DEVELOPMENT

MINERAL AND ENERGY GUIDE NAMIBIA

The division provides the following services: •

Inform and provide guidance to Mineral Rights Holders (MRH) and stakeholders on the royalty rates applicable to different minerals as well as royalty payments.

•

Evaluate and assess uranium long term sales and purchase, exchange agreements to ensure that Namibian origin uranium ore is safeguarded.

•

Provide information and guidance on IAEA reporting requirements.

•

Provide guidance to MRH on statutory reporting requirements correct completion of monthly and annual reports.

•

Verify export permits to ensure that Namibian minerals are traded at fair market values.

•

Produce quarterly and annual reports on labour and performance of the industry.

Chapter 2 | Mining •

The mandate of the division is to undertake research, analysis, provide information and policy recommendations to government on emerging issues related to mineral processing, marketing, exports, imports of mineral commodities, monitor mineral and metals prices, production and sale forecasting analysis, ore reserves and mineral development.

•

The division is responsible for implementation of safeguards. Liaise with international atomic agency (IAEA). Perform cost analysis of mining, milling, smelting, refining, transportation, treatment process, operation and capital expenditure in the industry.

•

Provide adequate information on minerals commodities to the Bank of Namibia, National Planning Commission, US-British Geological Survey, International Lead and Zinc Study Group, World Bureau of Metal Statistics and potential investors. The division also conduct announced/unannounced verification related to mineral production and royalties paid.

SMALL SCALE MINING The Small Scale Division (SSM) comprises of Mineral Resources/Information and Analytical & Environmental Services subdivisions they work hand in hand to provide: •

Providing Geotechnical Support Services to Small Scale Miners (SSMs), especially Laboratory sample analysis for free to small scale miners with a valid mineral licence.

•

Facilitating the formation of Small Scale Mining legal groups/bodies (associations or co-operatives) so that any form of support from government, non-government organisation and development partners, financial institutions could be channelled through legal and recognised entities.

•

Facilitating the formation of regional SSM marketing centres to display and market the mineral products of SSM

•

Providing training to small scale miners on Legal procedures of acquiring mineral rights/ Claims

•

Promoting potential for small scale mining at exhibitions and conferences

•

Encouraging small scale miners to participate in international trade fairs in order to market their products

•

Monitoring and evaluating potential as well as existing SSM projects through site visits and cooperation with development partners.

•

Assisting Small Scale Miners with pegging of Claims

•

Settling of land/farm access disputes

The first step when one is seeking to be involved in small-scale mineral exploration or mining activities is to apply for a Non-Exclusive Prospecting Licence (NEPL). A NEPL is mainly for small-scale miners. The holder of a non-exclusive prospecting licence is allowed to look for any mineral or group of minerals, on any land throughout Namibia. Any person may apply for a non-exclusive prospecting licence, provided he/she has reached the age of 18 years. A non-exclusive prospecting licence shall be valid for a period of 12 months. A non-exclusive prospecting licence shall not be transferred. An application for a non-exclusive prospecting licence costs N$50. A non-exclusive prospecting licence is needed if the applicant wants to apply for a mining claim (in order to be able to peg any claim). In general, small-scale miners are self-employed and the Ministry of Mines and Energy tries to give assistance to them in support of their mining operations, such as: Providing information on procedures of acquiring mineral rights/claims, assisting small-scale miners with pegging of claims, providing geotechnical support services to small-scale miners (SSMs), especially laboratory sample analysis for free to SSMs who have mineral rights. We also help them liaise with other stakeholders to optimise support to SSMs, and supporting small-scale miners to participate in trade fairs in order to market their products. Also a Mineral Ancillary Rights Commission is in place and assists small-scale miners with common disputes of lack of access to private land (farms).

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

MME

Ministry of Mines and Energy

HISTORY

MINERAL AND ENERGY GUIDE NAMIBIA

Winnowing of 3n

Old Matchless Mine

Mining has a long history in Namibia, with slag from copper smelting being more than 500 years old, the first formal mine, the Matchless Mine, opening in 1857, and indigenous people winnowing tin for more than 100 years.

Archaeological slag

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

THE NAMIBIAN COMMODITIES

!   Diamonds !   Uranium and fossil fuels !   Base metals (copper, lead, zinc, manganese, tin, etc.) !   Rare metals (REE, tantalum, lithium, etc.) !   Precious metals (gold, silver) !   Industrial minerals (salt, etc. !   Industrial rocks (limestone, etc.) !  Dimension stone !  Semi-precious stones and mineral specimen Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

THE IMPORTANCE OF MINING FOR THE NAMIBIAN ECONOMY

2014: 13 % GDP (up from 12.6% in 2013)* Total Revenue: N$ 21.61 billion a 3.25 % increase from 2013 totalling N$ 20.93 billion1 Non-diamond mining reached N$ 10.76 billion

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

*Excluding SHG Zinc and Blister Copper, which are accounted for under manufacturing 1 Source: Namibia Statistic Agency

Chapter 2 | Mining

MME

Ministry of Mines and Energy

THE IMPORTANCE OF MINING FOR THE NAMIBIAN ECONOMY

Diamonds: 6 % of world production (value) 95-98% Gemstone quality

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

EMPLOYMENT

MINERAL AND ENERGY GUIDE NAMIBIA

Employment in the mining sector 2014: 17 770 of which 947 temporary employees, 7 903 permanent and 8 920 contractors

Salaries: N$ 3.46 billion paid in wages and salaries2 Source: Chamber of Mines of Namibia 2 Excluding wages and salaries paid by Swakop Uranium,

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

SKILLS

N$ 93.8 million spend on skills development in 2014 (an increase of 60% from the N $58.5 million spent in 2013).

40 bursaries in 2014 for tertiary education institutions locally and regionally

Source: Chamber of Mines of Namibia

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

TAXATION GRN received N$ 1,979.7 billion from diamond mining and N$ 71.2 million from other mining according to preliminary figures

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Photo: UNICEF

Chapter 2 | Mining

MME

Ministry of Mines and Energy

ROYALTIES

5% on unprocessed dimension stone 10% on rough diamonds 1% - 5% on all other commodities

Diamond royalty tax contributed N$ 734.8 million and royalties from other minerals provided N$ 117.4 million to government Backbone of the Namibian Economy

MME GOVERNMENT REVENUE FROM MINING

MINERAL AND ENERGY GUIDE NAMIBIA

Ministry of Mines and Energy

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

2014 CONTRIBUTION BY ALL INDUSTRIES

Source: Namibia Statistics Agency

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

Diamonds Uranium Base metals Gold Industrial minerals Industrial rocks Dimension stone Semi-precious stones Mineral specimen

CURRENT PRODUCTION Okorusu

Matchless Mine Debmarine Namibia

Langer Heinrich Uranium

Namdeb

Rössing

Salt

Skorpion Zinc Navachab Rosh Pinah

Ohorongo Cement

Backbone of the Namibian Economy

Mineral Specimen

MINERAL AND ENERGY GUIDE NAMIBIA

Otjozondu Manganese

Chapter 2 | Mining

MME

Ministry of Mines and Energy

CURRENT MINES IN NAMIBIA

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

MME Diamonds Uranium* Copper Lead Zinc Gold Salt

Ministry of Mines and Energy

SHARE IN WORLD PRODUCTION 1% 7% 0.03% 0.17% 1.4% 1.5% 0.3%

* Amongst the top 10 producers worldwide Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

DIAMONDS

Namdeb Holdings:

Orange River (ML 42) Mining Area 1 (ML 43) Bogenfels (ML 44) Elizabeth Bay (ML 45) Douglas Bay (ML 46) Atlantic 1 (ML 47) Midwater (ML 128) Turnover: N$ 9.037 billion

Midwater

Exploration extended to land and shallow marine (2014):

Mining Area 1

Namdeb Diamond Corporation Production (2014): 612,265 carats (on land) Life of Mine: 2031

Elizabeth Bay

Orange River

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MME

Ministry of Mines and Energy

DIAMONDS

Debmarine Namibia Production (2014): 1,273,000 million carats (offshore)

Mafuta

Screening Barge Pomona, 1967

Debmar Atlan3c

Exploration is on-going to generate mineable inferred resources Jago Submersible

Backbone of the Namibian Economy

Monitoring

ISO cer3ﬁed

MINERAL AND ENERGY GUIDE NAMIBIA

Mining Tool

Chapter 2 | Mining

MME

Ministry of Mines and Energy

URANIUM

Screening

Rössing Uranium Ltd Production (2014): 1,543 tonnes U3O8 Turnover : N$ 2.406 billion

Open Pit

Plant

Open Pit

Exploration expenditure (2014): Zero Life of Mine: 2024

Preparing to blast

Shovel on the move Uranium Mineral

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

URANIUM

Langer Heinrich Uranium Production (2014): 2,296 tonnes U3O8 Turnover: N$ 2.240 billion

Plant Staﬀ

MINERAL AND ENERGY GUIDE NAMIBIA

Overview Tailings Product

Exploration expenditure (2014): Zero Life of Mine: 2033

Plant

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

OTHER PLAYERS IN URANIUM MINING

Swakop Uranium (Husab Project)

Mine currently under construction (ML 171) 10% held by Epangelo Mining Company Set to be the 2nd largest uranium mine in the World Investment: N$ 20 billion

First Blast

Explora3on

AREVA Resources Namibia (Trekkopje) Leach Pads

Mine currently under Care & Maintenance Life of Mine: 10 years

Drilling

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

BASE METALS

Rosh Pinah Zinc Corporation

ShaX

Output in 2014: 104,046 tonnes zinc concentrate 22,317 tonnes lead concentrate Ramp Overview Plant

Stockpile

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Exploration expenditure (2014): N$ 860,000 Life of Mine: 2024

Chapter 2 | Mining

MME

Ministry of Mines and Energy

Skorpion Zinc (Pty) Ltd

BASE METALS

Plant

Loading and hauling

Output 2014/15: 102,188 tonnes Turnover: N$2.56 billion Electro-‐winning

Product

Explora3on

Exploration expenditure (2014): N$ 45 million Life of Mine: 2017

Overview

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

BASE METALS

Weatherly Mining Namibia

Underground Conveyor

Output : 20,994 tonnes of copper concentrate containing 5,086 tonnes of copper metal in 2014 Turnover: N$ 332.2 million

MINERAL AND ENERGY GUIDE NAMIBIA

Otjihase Flota3on

Tschudi

Exploration Expenditure (2014): NS 3.97 million Life of Mine: 2026 (Tschudi) 2025 (Matchless & Otjihase)

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

BASE METALS

Otjozondu Mining Production (2014): 3,437 tonnes

Overview

Manganese Ore

Ore outcrop Kanga Ore

Exploration expenditure (2014): N$ 2.48 million Life of Mine: under review

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

GOLD

Navachab

Production (2014): 1,938 kg gold Turnover: N$ 958 million

Milling

Plant

Overview

Exploration Expenditure (2014): NS 7 million Life of Mine: 2031

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Hauling

Chapter 2 | Mining

MME

Ministry of Mines and Energy

GOLD

Otjikoto Gold

!  Production started 2015 !  As a result of 20 years of exploration, B2 Gold completed the construction of its Otjikoto Gold Mine !  3.9 million t have already been removed from the open pit !  49 000 m of blast holes were drilled !  The foundations for the processing plant and 4 leach tanks were erected !  A fully lined tailings storage facility was developed

Life of Mine: 2028 Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

INDUSTRIAL MINERALS

Salt

The Salt Company Production (2014): 107,458 t Salt Turnover: N$ 49.7 million Life of Mine: renewable

Harves3ng

Overview

MINERAL AND ENERGY GUIDE NAMIBIA

Stockpile

Product

Seawater Intake

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

INDUSTRIAL MINERALS

Salt

Salt & Chemicals Production (2014): 689,947 t Salt Turnover: N$ 103.57 million Evapora3on pond

Hauling

Overview

Exploration Expenditure (2014): Zero Life of Mine: renewable Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

INDUSTRIAL ROCKS

Ohorongo Cement

Drilling

Production (2013): 662 087 t cement Turnover: N$ 645 million Quarrying Plant

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Life of Mine: 300 years +

Chapter 2 | Mining

MME

Ministry of Mines and Energy

DIMENSION STONE

Granite Adamellite Gabbro Troctolite Dolerite Syenite Marble Dolomite Aragonite Limestone Sandstone

Quartzite Schist Travertine Sodalite Calcrete

Currently only production of Blocks Production (2013): Granite 49 650 t Marble 36 369 t Blue Sodalite 307 t

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy Saw

MINERAL AND ENERGY GUIDE NAMIBIA

Granite

Marble

Sodalite

Granite

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy Mineral vendor’s display

SEMI-PRECIOUS STONES + MINERAL SPECIMEN Small scale miners

Tourmaline

Mostly informal production which is not recorded Production (2014): e.g. Chalcedony Agate Amethyst Pietersite Tourmaline

Small scale mining adit

Topas Spitzkuppe turn-‐oﬀ minerals centre

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

MINERAL EXPLORATION

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Exploration is very active, Exploration expenditure (2014) : N$ 170.7 million

Chapter 2 | Mining

MME

Ministry of Mines and Energy

EXPLORATION

Bannermann Mining Resources (Namibia)

!E   PL 3345, pending ML 161, east of Swakopmund !  Exploration and the Definitive Feasibility Study for the Etango Uranium Project completed !  Pilot plant at N$ 15 million installed !  Exploration expenditure (2014): N$ 17.07 million !  Life of Mine: 16 years

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

EXPLORATION

Craton Mining and Exploration (Pty) Ltd

MINERAL AND ENERGY GUIDE NAMIBIA

! ! ! ! !

9  EPLs, Omitiomire near Hochfeld  Positive results of feasibility study for the Omitiomire Copper Project  Pending Mining Licence  Exploration expenditure (2014): N$ 39.2 million  Preliminary Life of Mine: 8 years

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

EXPLORATION

Gecko Mining

!6   EPLs, 4 EPLs applied for (renewed + new) !  Gecko Mining explores for salt, limestone, phosphate and silica !  Gecko Mining is busy developing the Okanjande Graphite Deposit near Otjiwarongo !  Gecko Mining has concluded an EIA for the Otjivalunda Salt Pan project !  Exploration Expenditure (2014): N$ 13.38 million

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

EXPLORATION

Kunene Resources

! ! ! ! ! !

EPLs, Kunene Region 8  Kunene Resources actively exploring for base metals Okanihova copper target and over 42.000 samples collected and analysed  Kunene Resources confirmed a lead-zinc-silver ore body at Otuziru  More targets identified for drilling in near future  Exploration expenditure (2014): N$ 16 million

MINERAL AND ENERGY GUIDE NAMIBIA

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

EXPLORATION

Namibian Copper !2   EPLs, 1 EPL renewal application, Ongombo project !  Namibian Copper has established a mineral inventory of 5.75 million t at 1.4% copper, 7 g/t silver and 0.32 g/t gold !  Exploration expenditure (2014): None

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

EXPLORATION

Reptile Uranium Namibia

9  EPLs  2 EPL pending renewal  Joint venture with Epangelo Mining (2 EPLs)  Reptile Uranium completed early stage project viability studies for the Ongolo (uranium), and Tubas Sand (uranium) projects !  Reptile Uranium is working on the Shiyela (iron) and Tumas (uranium) projects MINERAL AND ENERGY GUIDE NAMIBIA

! ! ! !

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

EXPLORATION

Teck Namibia

!1   3 EPLs, ! Teck Namibia spent over N$ 14.1 million on exploration in 2014 ! Kaoko and Haib copper projects the exploration is ongoing

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

EXPLORATION

Valencia Uranium

! 1  EPL, 1 ML west of Usakos !  measured and indicated resources were updated to 265 million t with 52.100 t U3O8 !  Exploration expenditure (2014): N$ 14.1 million

MINERAL AND ENERGY GUIDE NAMIBIA

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

EXPLORATION

Zhonge Resources Namibia

! 2  EPLs, 1 ML east of Swakopmund ! Zhonge Resources carried out sampling and geochemical assaying and ground geophysics ! Zhonge Resources is planning to mine 700 to 1000 t uranium oxide per annum at a grade of 230 ppm in their ML !  Life of Mine: to be determined

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

MME

Ministry of Mines and Energy

EXPLORATION

Other Developments

!C   heetah Minerals successfully drilled for copper !  Langer Heinrich Uranium western extension was developed for production ! Skorpion Zinc and Rosh Pinah Zinc jointly developed the Gargarub zinc deposit for production !  The Tschudi Mine started production 2014 !  Anomaly 16 (gold) close to Navachab Mine came into production !  A new geological model for the Haib copper deposit was constructed and it is likely to become a producing mine in the near future !  The Lofdal REE deposit near Khorixas is at an advanced stage of exploration !  The old Namib Lead Mine east of Swakopmund in processes for revival

Backbone of the Namibian Economy

Drilling

Chapter 2 | Mining

MME

Ministry of Mines and Energy

HYDROCARBONS

Exploration

Hydrocarbon exploration is extremely active in the Namibian offshore, and partly onshore

Oil from the Wingat borehole

An oil producing hydrocarbon system has been proven in the Namibian offshore, albeit not in economic quantities Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

HYDROCARBON POTENTIAL

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

!   Four geological basins are located offshore Namibia. Running from North to South, these are named the Namibe, Walvis, Lüderitz and Orange basins. !   Orange Basin – Kudu Gas Discovery project advance and construction to start in near future !   Walvis Basin - The exploration well Wingat-1 drilled by HRT, recorded a non-commercial oil discovery !   31 wells drilled offshore Namibia. !   14 exploration, 7 appraisal Key: Offshore Geology and 10 ODP/DSDP

Chapter 2 | Mining

MME

Ministry of Mines and Energy

HYDROCARBON EXPLORATION & APPRAISAL

Drilling

Seismics

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

MOST ACTIVE PLAYERS IN THE INDUSTRY TULLOW / PANCONTINENTAL

REPSOL / TOWER / ARCADIA

-  Tullow farmed-in in Pancontinental PEL37 -  Currently acquiring combined 3D+2D seismics

-  Repsol farmed-in PEL 10 in 2013 -  Welwitschia-1 well drilled

Maurel et Prom

ENIGMA (CHARIOT)

-  2 Years operating in Namibia -  Planning 3D seismic acquisition

-  8 Years operating in Namibia -  2 wells drilled and planning a 3rd well MINERAL AND ENERGY GUIDE NAMIBIA

HRT

-  4 Years operating in Namibia -  3 wells drilled - Evaluating further prospect

SERICA

-  Operating in Namibia for 2 years only and is looking for partner to drill

TULLOW

-  Critical role in the development of Kudu Gas SHELL

-  Important past role in Kudu Gas evaluation -  Back in Namibia PEL39; preparing new 3D seismic acquisition

Murphy / OMV / COWAN

-  Murphy and OMV recently farmed-in in Cowan’s PEL46 -  3D survey started 5 April

Backbone of the Namibian Economy

Chapter 2 | Mining

MME RESERVES AND PROSPECTIVE RESOURCES

Ministry of Mines and Energy

!  Currently only one commercial hydrocarbon accumulation, Kudu gas has been discovered in 1974, but production yet to start. !  1.4 Tcf proven natural gas reserves, but more recent exploration and analysis suggests that the potential resource could be as high as 10 Tcf. !  Increase in 2D and 3D seismic data acquisition has improved image and mapping of the prospects, as well as the estimation of potential oil and gas resources in the area !  Recent estimates suggest offshore Namibia could contain about 166 billion barrels of original oil in place (OOIP). !  The mean prospective resources could be of about 42.6 billion barrels of oil and 128.8 Tcf (3.6 T cubic meters) of gas prospective resources. !  If these resources can indeed be found, they could locate offshore Namibia as one of the larger oil and gas resources container in West Africa coast.

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

THE KUDU GAS FIELD

Kudu

Backbone of the Namibian Economy

MINERAL AND ENERGY GUIDE NAMIBIA

Water depth : 170m Reservoir depth: 4400mbmsl High pressure – 536 bar High temperature – 158°C Dry/sweet gas – 96% CH4 2-3 bbls/MMscf condensate Deterministic GIIP (Tcf) EA GCA PROVED 1.38 1.45 PROBABLE 3.28 2.72 POSSIBLE 9.92 7.12

Chapter 2 | Mining

MME

Ministry of Mines and Energy

PROMOTION OF MINERAL POTENTIAL

The Ministry of Mines and Energy promotes exploration and mining through the services of a vibrant Geological Survey and the Directorate of Mining’s efficient administration of modern mining Ministry of Mines and Energy legislation. Centrally located in Windhoek, it houses information about some 100 years of exploration in Namibia, as well as modern geological, geophysical and geochemical data; and provides licensing services.

 Namibia top-ranked mining investment destination in Africa and 25th globally Backbone of the Namibian Economy  Geological Survey of Namibia best in Africa (Source: latest annual global survey released by the Canadian Fraser Institute)

MINERAL AND ENERGY GUIDE NAMIBIA

MME

Ministry of Mines and Energy

PROMOTION OF MINERAL POTENTIAL

Backbone of the Namibian Economy

Chapter 2 | Mining

Millions

MME

Ministry of Mines and Energy

PROMOTION OF MINERAL POTENTIAL

600

500

400

300

200

100

1994

1995

1996

1997

1998

1999

2000

2001

Line km flown Exploration Expenditure [Mio $]

2002

2003

2004

2005

2006

2007

before 1985

1994

Data Sales [N$] Licenses active

4.4 million line kms - $ 155 million

Backbone of the Namibian Economy

MME

Ministry of Mines and Energy

DISCOVERY

!  Husab – one of the most significant discoveries in decades !  Resources of 267 million lbs !  @ 488 ppm U3O8 !  15 million tpa ore !  6500 tpa U !  1480 million US$

MINERAL AND ENERGY GUIDE NAMIBIA

Backbone of the Namibian Economy

Chapter 2 | Mining

MME

Ministry of Mines and Energy

PROMOTION OF MINERAL POTENTIAL

MINERAL AND ENERGY GUIDE NAMIBIA

Backbone of the Namibian Economy

Chapter 2 | Mining

Weatherly’s Craig Thomas succeeds Rod Webster

eatherly International Plc (WTI.L), a Copper Ore Mining company, said Craig Thomas has been appointed as Chief Executive Officer and has joined the Board of Directors. He succeeds Rod Webster, who has retired as CEO of the company. He will continue to work with the Company as a Director in a development role. Thomas joined the firm as COO in 2010 and has been an integral part of Weatherly’s development. Weatherly International has also moved its chief executive’s office from London to Windhoek. Weatherly is the parent company of Weatherly Mining Namibia which operates three copper mines in Namibia, namely the Otjihase and Matchless underground mines, and the newly commissioned Tschudi open pit mine near Tsumeb. John Bryant, Chairman, said, “We thank Rod for his commitment to the Company, bringing it to its current stage of development as a copper producer with strong foundations for growth.” In addition, the company announced that Krzysztof Szymczak, Managing Director of Logiman (Pty) Ltd, and Raymond Jenner, Portfolio Director of Orion Resource Partners (USA) LP, have joined the Board of Weatherly. Thomas said, “We have a new management team focused on ramping Tschudi production to a rate of 17,000 tonnes per annum before the end of this calendar year. As the Company moves forward, we will build upon Tschudi as a foundation, and maximise shareholder value from the rest of our portfolio.” In London, Weatherly shares were gaining 2.86 percent to trade at 1.08 pence.

Craig Thomas

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

SMALL SCALE MINING IN NAMIBIA The Small Scale Mining Division: MINERAL AND ENERGY GUIDE NAMIBIA

• •

Is one of the four divisions of the Directorate of Mines Was established in 2009/2010.

Core Function: •

Development of the Small Scale mining Industry of Namibia

BACKGROUND • • • • • •

Country-wide 5 000 to 10,000 Small Scale Miners About 35 types of minerals and gemstones are mined Extraction of gemstones and mineral specimen constitute 80% of the SSM activities. Dimension stones, industrial minerals and other mineral groups constitute the rest. The extraction of high value metals is limited to the production of tantalite and tin concentrates Most mining activities are in Erongo, Kunene and Karas Regions

SUPPORT ACTIVITIES

a) Free Advisory and laboratory services • Analysis of minerals and element spectrum in rocks • Technical advice for mining b) Advise on mineral policy issues and Support in pegging of claims c) Organizational support: Associations and cooperatives • Support to Small-scale Miners in formation of Association and cooperatives d) Implementation of capital projects • 6 projects in process of implementation • Projects involve setting up of processing facility for cutting and polishing of dimension and semi-precious stones in Khorixas, Kunene Region. • Re-started a plant of cutting flat stones for building materials in Noordoewer, //Karas Region.13 workers employed • Processing of clay into bricks and ceramic ware(liheke ya Nakele,Tondoro &loma) e) Liaising with stakeholders/external agencies to optimize support to Small Scale Miners. Stakeholders include: • Bundesanstalt fur Geowissenschaften and Rohstoffe (BGR) • Meeting Points Mining (MPM) • NCCI, Polytechnic, UNAM etc. • LAC • Division of cooperatives development (DCD)-MAWF • MITSD • MET • MLR f) Mineral Ancillary Rights Commission

Chapter 2 | Mining •

A Mineral Ancillary Rights Commission is in place and assists small scale miners with the common disputes of lack of access to private land (farms).

CHALLENGES THAT SSM FACE: • • • • •

Equipment: Inefficient nature of mining, Access to finance - No credit facilities due to risk associated with business of this nature. Market-Most miners sell their stones below market value due to a lack of formal market structures ( 1 SIDE DIAGRAM) Health &Safety-use of PPE and safe mining practices Land issues-Most of the mining activities take place on commercial farmland privately owned by individuals. A contract is made by the landowner often at the SSM’s disadvantage

SOCIO-ECONOMIC SIGNIFICANCE • • • •

Even though the exact contribution of the sector to the country’s GDP is not known, SSM has a positive, direct economic impact (poverty reduction) at the household level in rural and remote areas (According to a study done by NEPRU IN 2009). At a corporate level, a 2% royalty is payable to government for all exports of gemstone/semi-precious stones. SSM is the only source of livelihood to many households in the rural areas. Used for pay for education, health and other essential needs.

•

quality of life for many in the regions. SSM (untapped mineral resource has a high potential to contribute to economic development through empowerment of disadvantaged groups and improvement of income in rural areas)

STRUCTURE OF THE DIVISION Deputy Director Ms. Isabella Chirchir Subdivision: Mineral Resources/Information Subdivision: Analytical &Environmental Services Chief Geologist 4AL1 Ms Minsozi Mweemba Chief Geologist4AL1 Mr. Romanus Samuyenga Senior Geoscientist Mr. Helao Shivolo Senior Geoscientist Ms. Easter Kapuka Senior Administration Officer Ms. Florence Araes Senior Geoscientist Mr. Kudumo Andreas Senior Geoscientist Mr. Linus Kashungu Senior Geoscientist Ms.Sarti Makili Ministry of Mines and Energy 6 Aviation Road Private Bag 13297 Windhoek Namibia Tel:(+264-61)284-8111 Fax :( +264-61)238-643 E-mail:info@mme.gov.na Website: www.mme.gov.na

CONCLUSION •

If the SSM subsector is properly funded, organized and administered, it can significantly reduce the prevailing high unemployment rate to acceptable levels and improve the

mall Scale Miners of Uis (SMU) concluded an Agreement for the revival and development of the Uis Tin Mine and successfully negotiated N$5 million signing bonus of which N$1 million will be donated to the community of Uis for Food hampers and water point development at the Tatamutsi settlement. These projects are; Setting up of Small Scale Clay brick manufacturing plants at Iiheke YaNakale (Omusati Region), Tondoro (Kavango West Region) and Ioma (Zambezi Region).

Workshops for Small Scale Miners were successfully hosted at Noordoewer, Karasburg, Keetmanshoop and Khorixas with the assistance of experts from the Legal Assistance Centre and the Ministry of Agriculture, Water and Forestry. The aim of the workshops was to introduce legal groups to the participants in order to decide on suitable and preferred legal constitutional grouping models. The workshop also aimed at introducing drafting of constitutions, procedures of registration of associations/co-operatives and to explain mineral rights application procedures. A workshop for Small Scale Miners in the Erongo region (Karibib, Xoboxobos and Uis) was also successfully hosted in collaboration with the Ministry of Environment and Tourism to educate small scale

During the period under review, geochemical sample analyses (XRF and XRD Analysis) and other support services were provided to small scale miners countrywide. Ten small scale miners from the //Karas, Kunene, Erongo, Omusati and Khomas regions also received financial and logistical support to exhibit their mineral products at the Mining Expo that was held in Windhoek in May 2013. A survey, using Ground Penetrating Radar (GPR) was conducted in the Karibib and Usakos areas with the help of the Swedish Government organisation (Meeting Points Mining) to locate or identify fractures where possible mineralisation of semi- precious stones could occur. The project is still ongoing and preliminary results from the survey are encouraging. The Ministry participated in the Arusha International Gem, Jewellery and Minerals Fair (AIGJMF) which was organised by the Ministry of Energy and Minerals of Tanzania and Tanzania Mineral Dealers Association (TAMIDA) in October 2013. In spite of the Ministry’s efforts to educate small scale miners, some Small Scale Miners still operate in unsafe and environmentally unfriendly manner causing environmental degradation. Abandonment of mining sites and quarries by mineral rights holders (particularly small scale miners) without following the provisions of the Act, including rehabilitation, remain a problem.

MINERAL AND ENERGY GUIDE NAMIBIA

Land was availed in the above mentioned regions. Evaluation of the said projects to the Ministry of Mines and Energy by the Ministry of Works and Transport are in progress.

miners on the provisions of the Environmental Management Act No 7. of 2007, as well as the Minerals Act.

Chapter 2 | Mining

Skorpion Zinc – World Class Zinc

MINERAL AND ENERGY GUIDE NAMIBIA

“Our ambition is to be the leading global zinc producer and to be a partner employer of choice, delivering operational excellence in a safe and responsible way.’’ Skorpion Zinc Mine and Refinery is a subsidiary of Vedanta Resources plc (Vedanta). Vedanta is a London listed FTSE-100 diversified global resources major and is also listed on the NYSE. Vedanta is a diversified natural resources group that produces Aluminum, Copper, Zinc, Lead, Silver, Iron Ore, Power and Oil and Gas. Skorpion Zinc is the largest integrated zinc producer in Africa producing Special High Grade (SHG) zinc and has since November 2010 been owned and operated by Vedanta Resources. The company employs state-of-the-art technologies with the skills of a highly motivated workforce. Skorpion Zinc is located in the south of Namibia about 25km north of Rosh Pinah town in the //Kharas Region. It is a world-class mining and refinery operation producing 150 ktpa of SHG Zinc which is shipped to world-wide markets through the southern port of Lüderitz. Skorpion Zinc is comprised of two companies: Skorpion Mining Company (Exploration and Mining) and Namzinc Refinery. Oxidized

zinc ore, containing zinc oxide, zinc carbonates as well as zinc silicates, is mined from the open pit. The Namzinc Refinery currently treats the zinc oxide ore from Skorpion Mine to produce the final zinc metal and it is the only zinc refinery of its kind in Africa and therefore a gem in Namibia’s crown when it comes to adding value to raw materials. One hundred percent (100%) beneficiation to quality is branded as SZ SHG on the London Metal Exchange. The final products (99.995% Zinc) are in the form of 25kg ingots and 1 ton jumbos. These are then sold on the international market and mainly used in the steel galvanizing industry. Zinc is a versatile metal used for galvanizing, high-tech products, manufacturing alloys and health products. A unique feature of zinc is that it can be recycled many times.

Mining and Refining

Open-cast mining and hydrometallurgical systems are used to mine and refine zinc oxide to produce Special High Grade Zinc (SHG). It is one of the few oxide mines remaining in the world. The mine life of the present deposit is estimated to end 2018/19. The Refinery operation employs a world-class technology that treats

Chapter 2 | Mining Company Overview

zinc oxide ore to final metal. The 100% beneficiation from ore to final metal is done at Skorpion Zinc Mine and Refinery. The Namzinc Refinery is unique since it uses leaching, solvent extraction and electro-winning technologies to process zinc oxide ore which is mined directly from the Skorpion pit mine. The Namzinc Refinery is the only one in Africa. Skorpion Zinc is looking at converting the current refinery to enable it to treat zinc sulphide material in addition to the current zinc oxide ore. Once the Refinery has been converted, it has the potential to process material not only from the current mine but also from other sources, both within and outside Namibia, which will create major foreign exchange earnings. The success of the Refinery conversion project is of strategic importance not only for the future of Skorpion Zinc, but also to the entire Namibia in terms of larger value addition opportunity, which includes socio-economic development and job creation and preservation. The potential ore supply for the sulphide treatment is the Gamsberg Mine (situated in the Northern Cape) which is also a unit of Vedanta. Currently, Gamsberg holds the biggest zinc deposit in the world.

PRODUCT DESCRIPTION Product quality (SHG) The Skorpion product is 99.995% Zinc

Environment

Skorpion Zinc Mine and Refinery is located in the succulent Karoo Biome, one of the most ecologically sensitive area in the world and one that needs to be protected and conserved. Skorpion strives for environmental excellence with a comprehensive sustainable development plan. Skorpion Zinc’s Refinery is a zero discharge operation.

Exploration

Product range SHG Ingots - 25kg SHG Jumbo – 1ton Possibility to supply CGG

Skorpion Zinc has invested in a large- scale exploration programme to extend the life of the mine. In line with the Vedanta Group’s exploration re-investment strategy, Skorpion Zinc continues to explore within the current mine area, as well as in surrounding areas in search of additional resources. Our strategic focus is on increasing the life of mine of assets through in-pit and near-pit drilling and continued exploration. Vedanta has and continues to invest heavily in exploratory

Product Registration Product Brand registered with the LME under the “SZ SHG” name

MINERAL AND ENERGY GUIDE NAMIBIA

The conversion of the current Refinery will allow Skorpion Zinc to become a player, not just in the Southern Africa region but also in the international market for concentrate purchasers.

Chapter 2 | Mining and life extension of mine projects in Namibia. The exploration team remains highly motivated and committed to ensure that exploration efforts contribute to resource extension and therefore sustainable life of mine. As part of its exploration efforts, Gergarub, a zinc sulphide deposit was discovered by Skorpion Zinc in 2008 under a joint venture agreement with the neighboring mine. This project, with further exploration, could result in additional mining extension for Skorpion Zinc.

Valuing our employees

Skorpion Zinc prides itself in having a committed, passionate and innovative workforce. The company currently has a staff compliment of approximately 1700 of which 96% are Namibians. In an industry with traditionally lower representation of women than men, Skorpion Zinc has a vision for improving diversity within the Company, with measurable targets incorporated into company-wide key performance indicators. At present, women constitute 15% of Skorpion Zinc’s employees. Learning and development initiatives are key to the growth of Skorpion Zinc. A focus on people remains vital as part of the strategic goal of Skorpion Zinc to be the leader in Zinc production. Skorpion Zinc’s focus continues to be on internal capacity development and educational support for its employees.

Community Involvement

Communities are amongst our foremost stakeholders and there can be no sustainable mining project that can ignore the surrounding communities. With an enduring commitment to building sustainable communities, Skorpion Zinc is focused on initiatives that reduce its ecological footprint, create a safe, inclusive work environment for the employees and enhances the economic development of the communities where it operates. Some of the projects include: • Upgrading of the Rosh Pinah State Clinic • Expanding Hoeksteen Combined School • Expanding Rosh Pinah Academy • Upgrading of the Keetmanshoop Stadium • Livelihood upliftment through the Goat project • Women empowerment. • School support programme • U/17 Soccer Tournament • Skills training • Environmental projects

Safety

The safety of Skorpion Zinc’s employees being is of utmost importance to the company. It strives to improve on its safety statistics to the highest standards on safety management systems including OHSAS 18001:2005. Skorpion Zinc has a “no compromise and zero tolerance”

Skorpion Zinc Safety  Best All Injury performance in 12 years  ZIP (Zero Incident Process) training rolled out

 No occupational health related cases to date

MINERAL AND ENERGY GUIDE NAMIBIA

 Compliant to all EMP commitments  Vedanta Sustainability Standards integrated into SZ programs 

SHEQ Week & Summit and Chamber of Mines Peer Review

15 10 5 0

2011/12

2012/13 LTI

9 4

FAC

2013/14 MTC

2014/15

LTIFR

Chapter 2 | Mining

Location

attitude towards driving a safety first culture in the workplace. In order to support this, the Company has risk assessment processes to identify potential risks in its operations. Skorpion Zinc believes safety needs to be practiced and not just inculcated and hence its emphasis on its behavioural safety programme – Zero Incident Process (ZIP). As of 2015, Skorpion Zinc has decided to take safety awareness to another level by implementing Safety Day - a day on which all employees down their tools and focus on safety issues for the whole day. Various activities are lined up for the day varying from presentations to those who have been victims of fatalities throughout the Mining Industry especially within Vedanta. Best All Injury performance in 13 years ZIP training rolled out No occupational health related cases to date No reportable environmental incidents Compliant to all EMP commitments Vedanta Sustainability Standards integrated into SZ programs • Robust internal audit system

MINERAL AND ENERGY GUIDE NAMIBIA

• • • • • •

Skorpion Zinc Corporate Affairs Office 42 Berg Street Klein Windhoek WINDHOEK Tel.: +264 61 241 740 Fax.: +264 63 271 2526 Email: info@vedantaresources.co.na www.vedanta-zincinternational.com

Chapter 2 | Mining

Epangelo Mining: Exploration, Mining and Beneficiation Epangelo Mining Company (Pty) Ltd (Epangelo) is a private company established in 2008 with the Government to the Republic of Namibia as a sole Shareholder. Its operations are guided and subject to the provisions of the Companies Act No.61 of 1973, the Memorandum and he Articles of Association of the Company and the State Owned Enterprises Governance Council. Epangelo only became active in November 2010 and now employs ten people who are all based in Windhoek.

Our Mandate To be a vehicle for meaningful acquisition and exploitation of all strategic minerals, in collaboration with strategic joint ventures partners in public private partnership between the State, which own the resources, and the private sector.

Our Vision To be the leading diversified mining company in Namibia.

Business and beyond

One of the potential license areas that has proven attractive to investors is the Otavi Mountain Land area, including the Tshudi West licence area next to Tshudi Project. Epangelo has eight licenses excluding an additional under joint venture with Vedanta (owners of Scorpion Zinc Mine).

Epangelo Mining Company was created to effect direct State participation in the Namibian Mining Industry, and it aims to get involved in productive mining activities; by combining the characteristics of an instrument of public policy and those of business organization. Epangelo will contribute to the socio-economic development of the country in various ways; including: 1.

Revenue generation,

Taxation on profits,

Royalties,

Dividends,

Employment creation(direct and indirect),

Foreign exchange earnings,

Human capital development,

Infrastructural development and utilization (direct and indirect) such as: Roads and rail; Communication; Water; Power and Ports.

Several joint projects are envisaged for 2014, mainly “green field” exploration ventures to develop the resources in this area. The expected opening of the Tshudi mine in 2015, belonging to Weatherly Mining, is one such indication. Given the size and the number of EPLs, Epangelo Mining Company holds an OML area where numerous strategies will be pursed including: •

Entering into several Agreements (earn-in agreements) with several JV Partners.

Implementation of exploration programs for the licences held under JV special purpose vehicles with Vedanta and Minexus Exploration. •

Otavi Mountain Land (OML) Area The operational activities of the company extend over the breadth and width of all Namibia.

Early stage exploration activities by Epangelo Mining to promote and attract funding and external/internal investment opportunities through “Earn-in framework,” to further develop the project. This may provide opportunity for private Namibian investors to get involved at the early stages of investment where funding is most affordable to small and medium sized local players.

MINERAL AND ENERGY GUIDE NAMIBIA

The criterion to enter into a co-operation arrangement with Epangelo is simply the ability of any company (local or international) to demonstrate financial capacity to investing in any particular venture of its choice. The EPLs belonging to Epangelo are listed on the company’s website as well as on the website of the Ministry of Mines and Energy. 2nd Floor, Mutual Platz Building, Post Street Mall Private Bag 13369, Windhoek, Namibia Tel:+264 61 415700 Fax: +264 61 415701 Email: info@epangelomining.na www.epangelomining.com

Chapter 2 | Mining

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

IntrODUCtIOn & BACkgrOUnD

B2Gold Corp. is a Vancouver-based gold producer with four operating mines. B2Gold also has a strong portfolio of development and exploration assets in Nicaragua, Colombia, Burkina Faso and Mali. B2Gold’s corporate objective is to continue to be a leader in building shareholder value through optimizing gold production at existing mines, the exploration and development of existing projects and potential acquisitions. B2Gold Namibia (Pty) Ltd. is a 90% owned subsidiary of B2Gold Corp. The remaining 10% is owned by EVI Mining Company Limited, a Namibian, broad-based economic empowerment group. B2Gold Namibia’s portfolio includes the Otjikoto Gold Mine in north central Namibia as well as extensive base metal concessions in northern Namibia. The Otjikoto Mine, is located on commercial farmland, about 2km to the east of the B1 main road, between the towns of Otavi and Otjiwarongo, 300km north of Namibia’s capital city of Windhoek. Otjikoto’s construction was completed in 2014, and the first gold poured in December 2014. It’s a very significant development for Namibia, as it will inject nearly US$ 400 million of investment into the country’s economy over its presently envisaged life of 12.5 years, at the same time adding welcome diversity to Namibia’s mining industry, which is currently largely based on the mining of diamonds, uranium and zinc.

OUr VISIOn to be a great mining company that makes a meaningful difference.

We are a highly reputable organisation that protects its people, the environment and broader community from harm and enables them to grow with the success of the Company. For this, every individual accepts responsibility and shares in the reward of results.

LIVIng OUr VALUeS

B2Gold’s corporate objective is to continue to be a leader in building shareholder value through optimising gold production at existing mines, the exploration and development of existing projects and potential accretive acquisitions. One of the rewarding aspects of the mining industry is the positive socio-economic impact that developing new mines can have on the local populations in what are often remote and/or impoverished areas of the world.

OUr MISSIOn to produce superior returns as a responsible mining company.

MINERAL AND ENERGY GUIDE NAMIBIA

Our people are our strength. That’s why B2Gold Namibia seeks to hire and retain the best. This is a competitive advantage for the team and creates an environment in which the individual can excel.

IntegrIty

HIgH PerFOrMAnCe

BUILDIng MUtUALLy BeneFICIAL PArtnerSHIPS

reSPeCt

ACCOUntABILIty

ADDIng VALUe tO COMMUnItIeS & COUntry

Chapter 2 | Mining

A Growthâ&#x20AC;&#x201C;Oriented Gold Producer

OtjIkOtO grAnD OPenIng, 1 jUne 2015 From left to right: Dr Leake S. Hangala (Chairman of B2Gold Namibia), H.E. President Hage Geingob, Bill Lytle (Vice-President: Africa, B2Gold Corp.), Hon. Obed Kandjoze (Minister of Mines & Energy)

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter Mining Q &2 A | SeS Sion w i t h

Mark Dawe – Managing Director of B2Gold Namibia B2Gold Namibia’s Otjikoto Mine celebrated its first gold pour on the 11th of December last year, reaching a total of 7,159 ounces of pre-commercial production. The project was completed on-time, on-budget, and without a single lost time injury. Commercial production was officially declared on the 28 th February 2015 and the Grand Opening of the mine took place on the 1st of June, officiated by the State President, Dr Hage Geingob – his first official function since he assumed office.

Mark Dawe (Managing Director, B2Gold Namibia)

Following the promotion of Bill Lytle to Vice President for Africa, Mark Dawe was appointed as the new Managing Director on the 1st of February 2015. Bill now heads up B2Gold’s projects in Africa, currently comprising of the Otjikoto Mine, the Fekola Project in Mali, and the Kiaka Project in Burkina Faso. Mark was previously employed as Vice President – Key Raw Materials and Head of Global Mining Operations for Solvay’s Global Business Unit: Special Chemicals. In this role he was responsible for overseeing all of the mining operations and projects of the Unit – including Okorusu Fluorspar Mine in Namibia (also Otjikoto’s closest neighbour).

MINERAL AND ENERGY GUIDE NAMIBIA

Mark has worked in Namibia for more than 26 year s and has extensive experience working with the government both as a Managing Director and as a former President for the Namibian Chamber of Mines. He came to B2Gold Namibia with an extensive technical background as a metallurgist and hydrogeologist, and a keen interest in environmental protection and corporate social responsibility.

Q: what made you decide to join B2Gold? A: B2Gold and I share the same passions for team building, maximizing employee potential and giving back to this wonderful country in manifold areas of Corporate Social Investment. The company has developed a word-class mine in record time that adds shareholder value but has intensely focused on sustainability since the project’s inception. They have put in place key policies and procedures to ensure that stakeholders at all levels of the project benefit from this national asset. The goal is to maximize sustainable opportunities for communities, the government and workers as well as the natural environment. This is why I joined B2Gold: The corporate vision is so completely aligned with my personal beliefs, goals and passions, that for me it was, as they say, a “no-brainer”. Q: what are your goals for B2Gold namibia in your tenure as Managing Director? A: It has been mentioned to me on many occasions that Otjikoto will be the flagship of the fleet that will launch B2Gold into the realm of the major producers. The successful ramp-up to above-targeted gold production is of course our primary objective and focus, but there is so much more that would determine whether or not we have achieved success. The measure of success is not just about how much money we have generated, but how we have made a difference. A difference to a social condition, whether it be through interventions in health, education, or community support. A difference to our environment and the wonderful creatures that inhabit it, whether it be through our efforts in conservation, or environmental education. We can only really say we have succeeded when we look back one day and relish the fact that we have made a difference to the quality of life of an increasing number of human beings and a difference to the preservation of our natural endowment, for the benefit of all future generations.

20 Nachtigal Street Ausspannplatz, Windhoek

otjikoto Mine Tel: +264 (0)67 301 8000

windhoek head office Tel: +264 (0)61 295 8700 Fax: +264 (0)61 295 8799

www.b2gold.com

Chapter 2 | Mining

All of our “non-technical goals” are ensconced in the objectives of our Corporate Social Investment strategy. Our CSR team has made such huge strides in terms of giving back to communities that even before production had started, B2Gold had clearly set the CSR standard for the Namibian mining industry. Even before the first ounce of gold was produced, corporate had committed to providing one million US Dollars (N$12 Million) towards our CSR projects in 2015.

communities in which the employees live, it’s often quite the opposite. Responsible Corporate Social Investment means not only what’s in the very best interests of the employees, but also their families, their future livelihoods and the communities in which they live. To date it appears that the majority of employees favours the B2Gold Namibia scheme and recognizes its valuable benefits. Our objective is to maximize the positive aspects that our business activity brings to our region and our country as a whole.

Q: what is B2Gold’s approach to housing its employees? A: Encouraged by Town Councils and opinion leaders, B2Gold took a decision early in the project not to construct an oldstyle mine village; the majority of which have left negative legacies and have not maximized contributions to livelihood improvement and lasting economic stimulation. Faced with three possible options namely the construction of a mine village, issuing a housing allowance, and implementing an assisted home ownership scheme, it was felt that the first two were not desirable for the following reasons.

Q: how many of your employees do you help with accommodation and where are they accommodated? A: B2Gold is trying to move away from a paternalistic system whereby mine-owned housing is provided. Our scheme allows employees to choose where they wish to live and how much of their income they wish to spend on their home loan. We have an assisted home ownership initiative where we play the role of facilitator between contracted banks (at this stage FNB and Nedbank) and the employee. B2Gold provides a 20% guarantee letter to the bank when an employee applies for a home loan. This guarantees employees’ access to finance, many of whom would not otherwise qualify. We are also in the process of negotiating the purchase of erven in Otavi that will be provided to B2Gold employees free of charge, as well as securing erven in Otjiwarongo for B2Gold employees – which they will be able to develop by building their own homes, if they so choose.

Mine villages often lead to socially unsustainable situations. Typically employees are allowed to use a mine house as long as they are employed by the company and the employee has no ownership over the house. As a result, houses are often poorly looked after and on retirement or closure of the operation the employee no longer has a right to the house and has not, over the long term, reaped the benefits of an investment. (As most people know, property ownership in Namibia is an extremely valuable investment.) Mine villages are usually built on very remote mine sites and are intended for the life of mine only. Being located between Otjiwarongo and Otavi it makes sense to develop these economies and offer employees a real piece of ownership in this process. Title deeds of these houses or properties will be held in the name of the employee.

It’s also important to note that being a good corporate citizen involves a number of social responsibilities to the employees, communities, government and our natural environment. Simply giving employees who do not agree with the scheme what they wish for might provide shortterm gratification for them, but it’s unsustainable and often adds to social problems. In the bigger picture of the

Q: B2Gold owns 18,000 ha of land surrounding the otjikoto Mine, of which only 2,000 is utilised for industrial use. what is the company planning to do with all this land? A: Even before construction began on the Otjikoto Project, B2Gold appointed a farm management team to start rehabilitating the land surrounding Otjikoto. The land that B2Gold purchased used to be commercial farm land – heavily over-grazed, bush-encroached and neglected. The team immediately set about a de-bushing and land rehabilitation project. During 2013 and 2014, over 350 head of game were purchased for the farm, re-stocking the very depleted and unvaried species that were on the farm. The team also set about building an Education Centre – a centre for research and education excellence for the Otjozondjupa region and Namibia as a whole. We have huge dreams for the Education Centre, and it is already being used as a venue to host school children for educational outings following an intensive phase last year to develop lesson plans that complement and supplement the Namibian school curricula. Of course we intend to fully explore the land for any additional ore-bodies that could be economically extracted. •

MINERAL AND ENERGY GUIDE NAMIBIA

Housing allowances often contribute to social discord because in a great many instances employees do not in fact utilize this money for housing. Once again, while short term satisfaction might be higher, the long term well-being of the employee, and his or her family, is compromised. We genuinely wish to positively contribute to the long term advancement of our employees (and their families) and create sustainable communities, which are prosperous and last well after mine closure. As a result we elected to create an assisted home ownership scheme, which allows B2Gold employees an opportunity to own their own houses. It is important to note that the scheme does not require employees to build (though they may if they wish to do so) but they’re also able to purchase existing properties using the scheme.

Q: which milestones have been reached in terms of providing for the namibian workforce? A: Our financial scheme which gives all employees access to home loan finance under favorable conditions is operational, as of last month. Employees can now purchase existing properties or land; although as mentioned land to be provided by the town councils is still awaited.

Case Study |

GECKO NAMIBIA infrastructure. They are geared to serve the Namibian economy and specifically the existing and emerging mining industry. Gecko aims to be a catalyst for industrialization in support for vision 2030. The three business pillars of Gecko Namibia are: Resource Development, Mining Services and Industrialisation. Through these pillars, Gecko plans to develop their own and other’s resources, provide services that endeavour to realise the company’s objectives and beneficiate Namibia’s own resources through industrialisation. Gecko plans to be a major role player in the mining services and construction industry.

ecko Namibia (Pty) Ltd (Gecko) is a 100% Namibian owned company that is part of a larger Namibian owned holding company called Gecko Africa Holdings (Pty) Ltd. Gecko is itself a holding company to a number of subsidiaries, which are active in a wide range of industries aimed at developing Namibian resources and

Gecko Africa Holdings has over the past few years consistently had a turnover in excess of a billion Namibian dollars. The group employs over 2000 personnel across southern Africa. Gecko’s future plans hope to bring greater prosperity to the Namibian economy committing to realize the country’s industrial objectives. Investments amounting to billions will be made through the planned project pipeline in Namibia over the medium term. Enquiries: info@gecko.na

RESOURCE DEVELOPMENT Gecko has acquired their own mining and exploration rights for a number of industrial minerals as follows:

Gecko Graphite

This subsidiary has secured the rights to the world class Okanjande graphite deposit near the town of Otjiwarongo in Namibia. This company aims to produce approximately 20,000 tons of flake graphite per annum from this resource. Contact info.graphite@gecko.na

MINERAL AND ENERGY GUIDE NAMIBIA

Gecko Salt

Cape Cross, which is located 120 km north of the coastal town of Swakopmund, is a shoreline salt pan which contains approximately 335 million tons of naturally crystalized rock salt. Substantial work has been done through a series of exploration programs to assess the salt deposit and its conditions for crystallising salt. Gecko Salt has secured the rights to a substantial portion of the Cape Cross salt deposit and plans to produce approximately 1 million tons of salt per annum from this resource. Contact info.salt@gecko.na

Gecko Phosphate

This subsidiary has secured 2 Exclusive Prospecting Licences (EPL’s), totalling approximately 200,000 ha off-shore of Namibia that contains

vast quantities of marine phosphates at 18% P2O5. Gecko has completed an initial round of exploration sampling with promising results. The intention is to mine the marine phosphates and process the phosphates into Phosphoric Acid at the VIP Plant. Contact info. phosphate@gecko.na

Gecko Chemicals

The Otjivalunda pans are located 90 km south from the town of Oshakati in the Northern part of Namibia. The pans contain Burkeite, Thenardite and Sodium Sulphate. Gecko has secured the rights to this pan and intends to develop approximately 100,000 tpa annum of sodium sulphate, Trona, washing powder and soaps. info.chemicals@ gecko.na

Gecko Lime, a mining subsidiary, plans to mine limestone in

the Swakopmund area. Lime, hydrated lime and GCC will be produced at the mine’s processing plant. Contact info.lime@gecko.na

Gecko beyond Namibia’s borders

Green fields, base metal exploration in Portugal and Zambia is currently underway and promises great returns

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MINING SERVICES An experienced team of engineers and geologists plan, manage and coordinate mining and processing related projects at all phases of development (e.g. feasibility studies and project execution).

Gecko Mining

The emerging mining market in Namibia is one in which medium to smaller reserves are being exploited. Gecko Miningâ&#x20AC;&#x2122;s ability to mine these reserves efficiently, positions us strategically to serve the emerging mining sector and provide a one stop mining service. Contact info.mining@gecko.na

Gecko Laboratories

operates a comprehensively equipped metallurgical laboratory servicing the Namibian mining industry. Services include metallurgical process development, leach extraction test work, column leach tests, gravity concentration, solvent extraction tests, ion exchange tests and floatation tests. Contact info. labs@gecko.na

Gecko Civils

The team of civil engineers specialise in civil construction work that is associated with the erection and operation of mining and mineral processing plants, including all associated earthworks, roads, storm water, water and sewer reticulation, pollution control and slurry dams, railway sidings and general infrastructure development. Contact: info. civils@gecko.na

Gecko Mineral Processing designs, manufactures and operates both fixed and mobile mineral processing plants. Contact info.processing@gecko.na

provides services for the mining and exploration sectors within and beyond the borders of Namibia. Services can be provided for mines, quarries and for civils. Contact info.drilling@gecko.na

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MINERAL AND ENERGY GUIDE NAMIBIA

Gecko Drilling & Blasting

Case Study |

INDUSTRIALISATION Vision Industrial Park (VIP)

Gecko has been pursuing the VIP Development Plan, a heavy industrial area to be situated on the Namibian west coast, for the past five years. By the same Cabinet Resolution Gecko was also awarded 700 ha of industrial land on a 99 year lease. VIP will develop infrastructure to accommodate Geckoâ&#x20AC;&#x2122;s own industries and any other commercial enterprises that desire to establish their business at VIP. Each of these would be subject to Environmental Clearance. Contact info.VIP@ gecko.na

will be dedicated to the importing and exporting of bulk commodities (inclusive of fuel and gas).

Gecko Industries

The VIP Development Plan will enable Gecko Industries to create industries that will produce, amongst others, sulphuric acid, caustic soda, phosphoric acid and fertilizer. Reagents will become locally available to meet the needs of the national mining industry. Local manufacturing will result in the export of commodities. Gecko Water plans to make available, desalinated water supply systems, for the VIP Development Plan and other users through partners in the water supply industry.

Port of Swakopmund

Gecko Namibia has embarked on a strategic environmental assessment to assess the potential cumulative impacts for a development of this magnitude. Internationally acceptable limits of pollution will be set for the terrestrial and marine environments thereby ensuring that the stage is set for global investment opportunities. The World Bank require companies to meet the 10 environmental equator principles to which Gecko is committed.

MINERAL AND ENERGY GUIDE NAMIBIA

The Namibian Government awarded Gecko the right to develop a private port on Namibiaâ&#x20AC;&#x2122;s west coast adjacent to the VIP industrial land. The Port of Swakopmund, will form part of VIP Development Plan, situated 25 km north of Swakopmund. The Port of Swakopmund

Sustainability

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MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 2 | Mining

Uranium Mining in Namibia

MINERAL AND ENERGY GUIDE NAMIBIA

he Namibian government strongly supports uranium mining. This took centre stage in April 2013 at a ceremonial ground-breaking at the new Husab mine site some 85 km east of Swakopmund. The Chinese state-owned company Guangdong Nuclear Power Company (CGNPC) Uranium Resources Co. Ltd. and Epangelo Mining, the Namibian government-owned mining company, acquired the Husab uranium mine owned by Swakop Uranium from the Australianlisted company Extract Resources at a cost of 19 billion Namibian dollars (US$ 2.1 billion). Construction of the mine started at the end of 2012, with production targeted for late 2015. The mine construction will create 6,000 temporary and 2,000 permanent jobs when the mine goes into full production. The mine, which is said to hold about 280 million tonnes of uranium ore and has a life of about 20 years, is expected to boost the gross domestic product by 5 per cent. It will produce 15 million pounds (6800 tonnes) uranium oxide per annum, more than twice the total current uranium production of Namibia. Rio Tinto’s Rössing Uranium and Paladin’s Langer Heinrich are currently Namibia’s only two producing uranium mines, with production targets of up to 12 million pounds per annum. Rio Tinto announced both staff and cost reductions, whilst Langer Heinrich postponed its stage 3 expansions. AREVA Resources Namibia’s Trekkopje mine, approximately 65km north-east of Swakopmund is currently under “Care and Maintenance”. The Trekkopje mine nevertheless is a strategic asset for AREVA and the group will reassess the economic situation on a regular basis. AREVA is committed to stay in Namibia over the long term and it will continue its involvement with local populations in the Erongo Region through actions in support of education, healthcare, and local economic development. AREVA’s Erongo desalination plant will also remain in operation to produce water for local industries and populations.

Valencia Uranium (now known as Norasa) is expected to continue with additional exploration. A newly completed engineering cost study on Namibian uranium projects Valencia and Namibplaas suggest increased output and reduced operating costs for the Canadian-led developments. Canadian owners Forsys Metals intend to build the area into a consolidated uranium project called Norasa. Having secured a 25-year mining licence for Valencia, Forsys is in the privileged position of owning one of only two fully permitted development-stage projects in the country. A number of exploration companies, notably Bannerman Resources and Reptile Uranium, are still awaiting governmental approval to proceed with mining. Bannerman Resources applied for a mining license for its Etango Project with an estimated US$ 870 million capital cost for a mine and heap leach concentrate plant. Another Chinese company that received a mining license in 2012 is Zhonghe Resources (Namibia) Development (PTY) LTD, a Namibian registered company founded in 2008. The main shareholders and investors are China Uranium Corporation Limited (CUC) (58%), a wholly owned subsidiary of China National Nuclear Corporation (CNNC), and a private enterprise, Namibia China Mineral Resources Investment and Development (PTY) LTD (Nam China) (42%). The Zhonghe licensing area is located in the Namib Desert, near the Rössing uranium mine and Husab Project . The Zhonghe Project is expected to be an open pit mine, with the total project investment estimated at between US$600 million (N$5,4 billion) and US$700 million (N$6,3 billion).The company hopes to achieve a mine lifespan of around 10 to 15 years, at a production capacity of 700 to 1 000 tonnes of uranium per year. These new projects offer the prospect of significant investment, direct and indirect job creation, infrastructure development and a contribution to the creation of wealth in Namibia, extending into

Chapter 2 | Mining communities well beyond those directly connected to the projects. Namibia is well positioned to become the second largest producer of uranium in the world, elevating Namibia past Niger, Australia and Canada to the second rung on the world ladder of uranium producers. But there is a vitally important caveat: to manage the risks of environmental degradation, including pollution and radiation safety that may result from mining activities. It is crucial that mining companies comply with all relevant laws and regulations at all times.

bearing rock processed to produce uranium oxide. Mining is done by blasting, loading and hauling from the open pit, currently measuring 3 km long, 1.5 km wide and 390 m deep.

Operating Mines

and ISO 14001:2004 certification allows Rössing consistent application of HSE best practice.

Rössing Uranium Limited – Working for Namibia

Rössing is a member of the Rio Tinto group of companies. The mine currently has around 1,100 employees with 98.5 per cent Namibians. The mine provides stable, long-term and rewarding employment, backed by training and career development opportunities. At the end of 2012 the mine had supplied a total of 123,453 tonnes of uranium oxide to the world’s nuclear power utilities for the generation of electricity. All uranium produced by Rio Tinto’s mines is marketed by Londonbased Rio Tinto Uranium Limited and supplies electricity companies located in all three major markets: Asia, North America and Europe. The uranium is mined from tough Alaskite, which is the uranium-

The mine has a number of great growth opportunities ahead – not only in exploration and organic expansion options, but also in business development opportunities. A most recent development is the signing of a long-term sulphuric acid supply agreement with a Namibian company, starting in 2014, that would benefit employment creation in Namibia. Rössing has a significant annual procurement spend, with N$2.2 billion spent on goods and services of which N$1.5 billion (or 63 per cent of the total spent) was allocated to Namibian registered suppliers in 2012. Apart from living up to the objectives of Namibia’s Vision 2013 and the national development plans of promoting value addition within the Namibian market, Rössing is assisting the Government of Namibia to create and maintain employment opportunities. The impact of the events in Japan in 2011 continued to plague the uranium market throughout 2012. The mine reported a N$474 million operating loss in 2012. The mine continues to invest heavily in time and resources to improve our efficiency, productivity and cost base in order to remain competitive in the marketplace. The Rössing Foundation implements and facilitates Rössing’s corporate social responsibility activities within Namibian communities, and is managed by a Board of Trustees.

MINERAL AND ENERGY GUIDE NAMIBIA

The Rössing Uranium Mine is one of the largest and longest-running open pit uranium mines in the world. It is located in the Namib Desert 65 kilometres from Swakopmund near the town of Arandis. Discovered in 1928, it started operations in 1976 as Namibia’s first uranium mine and in 2012, produced 2,699 tonnes of uranium oxide, producing 4 per cent of the world’s uranium.

Rössing remains committed to best practices in its health, safety and environmental performance and continue on its Zero Harm safety journey, with the goal to create an injury- and illness-free workplace. A formalised Health, Safety and Environmental Management System

Chapter 2 | Mining

For more information: Penda Kiiyala General Manager External Affairs, Communities and Corporate Communication Email: Penda.Kiiyala@riotinto.com or yourcontact@rossing.com.na www.rossing.com www.rossingfoundation.com Langer Heinrich Uranium Mine (LHM)

MINERAL AND ENERGY GUIDE NAMIBIA

LHM in Namibia is owned 100% by Paladin through its wholly owned Namibian subsidiary, Langer Heinrich Uranium (Pty) Ltd (LHUPL). Paladin purchased the Langer Heinrich project in August 2002 and, following development and construction, commenced producing from the open pit mine and conventional alkaline leach plant in early 2007 with annual production of 2.7Mlb of U3O8 achieved in 2008/2009. Soon afterwards, a Stage 2 expansion was undertaken to increase production to 3.7Mlb pa U3O8 followed by construction and commissioning of the Stage 3 expansion, completed FY2012. The mine has produced consistently at a rate of 5.2Mlb pa U3O8 for the past 12 months. Langer Heinrich is as surficial, calcrete type uranium deposit containing a Mineral Resource of 77,980t U3O8 at a grade of 0.054% U3O8 (250ppm U3O8 cut-off grade) in seven mineralised zones designated along the length of the Langer Heinrich Valley within 15km length of a contiguous paleodrainage system. The deposit is located in the Namib Desert, 80km from the major seaport of Walvis Bay.

Developing Mines SWAKOP URANIUM Company Overview

Swakop Uranium is currently constructing and developing a worldclass uranium mine, called the Husab mine, near the town of

Swakopmund in the Erongo region in western-central Namibia. Once in full production, Husab, which has the potential to produce 15 million pounds (6 800 tonnes) of uranium oxide per annum, will be the second-largest uranium mine in the world (the world’s largest uranium mine, McArthur River in Canada, can produce up to 18 million pounds per annum). The Husab mine’s potential production is more than the total current uranium production of Namibia and will elevate Namibia past Niger, Australia and Canada to the second rung on the world ladder of uranium producers, behind only Kazakhstan. The 8 km uranium mineralisation on the Swakop Uranium Exclusive Prospecting Licence (EPL) area has been confirmed as the highestgrade, granite-hosted uranium deposit in Namibia and one of the world’s most significant discoveries in decades. Based on the Definitive Feasibility Study (DFS) for the project, Husab is being developed as a low-risk, conventional, large-scale load-and haul open pit mine, feeding ore to a conventional agitated acid leach process plant. The mine has a potential life of more than 20 years, with uranium reserves of at least 280 million tonnes. There are furthermore opportunities to increase the reserve base by adding the defined resources at Zones 3 to 5, and through building on promising exploration results.

Our owners

Until April 2012, Swakop Uranium was a 100% subsidiary of Extract Resources, an Australian company listed on the Australian, Canadian and Namibian stock exchanges. During April 2012, Taurus Minerals Limited of Hong Kong became the new owners following a successful takeover of Extract Resources. Extract Resources has subsequently been delisted. Taurus, an entity owned by China General Nuclear Power Company (CGNPC) Uranium Resources Co. Ltd. and the China-Africa Development Fund, has been pursuing Swakop Uranium’s Husab orebody since 2011, first by successfully launching a takeover bid for Extract’s majority shareholder, Kalahari Minerals plc, which owned 43% of Extract. This was followed by a US$2,2-billion takeover offer for Extract, which the Extract independent directors recommended their shareholders to accept.

Chapter 2 | Mining CGNPC’s investment in Swakop Uranium not only marked the biggest in Namibia since the country’s independence, but also by far the single biggest investment by China in Africa. More than US$ 100-million (N$1-billion) was spent to get the project to the construction phase. A further about US$2-billion (N$20-billion) will be required to bring the Husab Project to fruition.

construction and about 1 800 permanent operational job opportunities. This will increase the number of people employed in the mining sector by approximately 17%. According to a socio-economic study done on the Husab Project, eight to ten spin-off jobs will be created per permanent employee, which means that up to 16 000 permanent jobs will be created by and as a result of the Husab Project.

In November 2012, the Namibian state-owned mining company, Epangelo, and Swakop Uranium finalised an agreement for the subscription of a 10% stake in Swakop Uranium in a deal valued at N$1,8-billion (US$226-million). At the signing ceremony, Mr. Zheng Keping, CEO of Swakop Uranium, said more than N$1-billion had already been spent to get the project to its current state. “Our budgets estimate a further N$20-billion will be required to bring the project to fruition,” he said.

Swakop Uranium has furthermore committed itself to social and empowerment aspects such as local procurement where possible, local recruitment, involvement in social responsibility programmes, training, education and sound environmental management practices. The Swakop Uranium Foundation manifests its commitment to supporting the Erongo region and Namibia. The Foundation has, among others, provided funding to Ellie’s Vegetable and Flower Garden, based in the town of Arandis near the Husab mine; and pledged support towards the construction of a girls’ dormitory at the Tears of Hope orphanage in Swakopmund.

Head office

Swakop Uranium’s head office is in the Namibian capital of Windhoek. The company also has an office in Swakopmund, which is situated about 70 km from the Husab mine site. Swakop Uranium’s contribution Given the potential of the Husab site, Swakop Uranium is poised to become a substantial contributor to the Namibian economy and its local communities. At a spot price of US$ 65/lb, a production rate of 15,5 million pounds per annum and an exchange rate of N$10 to the US dollar, Swakop Uranium will have an annual turnover of US$1-billion. The Husab Project will furthermore contribute 5% to the Namibian Gross Domestic Product, 20% to the country’s merchandise exports and generate up to N$1 700-million per year in Government revenue. The project will also create more than 6 000 temporary jobs during

Swakop Uranium also helped to acquire land from the Swakopmund Municipality for a new school that will open its doors in Swakopmund in 2015. Close on 500 hungry minds, waiting to absorb new knowledge, will now have a chance to benefit from some of the best education in the area. While the major contracts on the project will be with international companies, Swakop Uranium remains committed to encouraging spend with Namibian companies through a variety of means. In parallel with the construction of the Husab mine, the Swakop Uranium management team in Namibia will assemble and train the operational team to ensure that the company is ready to operate the mine once construction is completed and the mine is commissioned. For more information: Visit our website at: http://www.swakopuranium.com/

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

MINERAL AND ENERGY GUIDE NAMIBIA

Bannerman Resources-Etango Uranium Project

annerman Resources’ Etango Uranium Project is one of the world’s largest undeveloped uranium deposits, located in the Erongo uranium mining region of Namibia. Bannerman completed a Definitive Feasibility Study (“DFS”) and Environmental and Social Impact Assessment (“ESIA”) on the Etango Project in 2012. Key outcomes of the DFS are as follows:

• Cash operating costs of US$41/lb U3O8 in the first 5 years and US$46/lb U3O8 over the life of mine; • At a uranium price of US$75/lb U3O8, the Etango Project generates operating cash flow of US$2.7 billion before capital and tax, and free cash flow of US$923 million after capital and tax, based on 104Mlbs U3O8 life of mine production;

• Ore Reserves (at 100ppm cut-off) totalling 279.6 million tonnes at an average grade of 194ppm U3O8 for 119.3 Mlbs of contained U3O8;

• Pre-production capital cost of US$870 million; and • Minimum mine life of 16 years, with further extensions possible through the inclusion of measured and indicated resources below the designed pit, and the conversion of existing inferred resources.

• Production of 7-9 Mlbs U3O8 per year for the first five years and 6-8 Mlbs U3O8 per year thereafter, based on an average processing throughput of 20 Mt per annum and an average recovery rate of 86.9%, which would rank Etango as a global top 10 uranium only mine;

Chapter 2 | Mining

HEAP LEACH DEMONSTRATION PROGRAM STRONGLY SUPPORTS DFS • Fast and high leach extraction – within 20 days average total leach extraction of 94%; • Low sulphuric acid consumption – on average less than 16 kg/tonne (compared with DFS projection of 18kg/tonne); • Geotechnical stability - visual observations during the unloading of the ore confirmed the uniform percolation through the material, integrity of the agglomerate and

geotechnical stability of the heap. • The similar performance of the larger scale 30t sample to the previous 200kg sample in the laboratory indicates potential upside to the full scale heap leach pad performance in the DFS. • Capability building – rapid growth in understanding of the process control and metallurgical accounting associated with the specific characteristics of the Etango deposit and design flowsheet.

Bannerman’s Chief Executive Officer, Len Jubber: “The results of the Demonstration Plant confirm the low technical risk associated with the Etango Project and highlight opportunities to improve the project economics. The Etango Project continues to progress and remains one of the very few globally significant uranium projects that can realistically be brought into production in the medium term.”

MINERAL AND ENERGY GUIDE NAMIBIA

The results from the recently constructed N$ 15 million strongly support the assumptions and projections incorporated in the DFS.

Chapter 2 | Mining

ROSH PINAH ZINC CORPORATION

Technical Services

• Grade Control

Tonnage and Grade Reconciliations. Tracking of Mined Out Quantities (Production Tracking).Daily and Weekly Planning and Forecasting of Tonnages and Grades. Ore Classifiaction. Provide Mining with reliable information regarding ore vs. waste development.

• Exploration(Underground Regional)

Finding new economic or resources in the Mine grant as well as in the vicinity of Rosh Pinah.There are different tools to use such as mapping of rock types and geological structures, geochemistry, geophysics and finally drilling of promising areas. When ore is found the shape, size and grade of the ore body is to be interpreted.

• Production Geology

Production geology focuses on upgrading the ore resources found by exploration to a measured category. Diamond drilling is done which produces core that provides different geological information logged. Production geologists interact with mining to ensure that the areas being mined will produce the planned grades and tonnages.

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• Rock Engineering

Rock Engineering focuses on mining strategies, excavation design, excavation layout and excavation support systems that ensure safe, stable and productive mining operations. It is the technical engineering that bridges the gap between mining geology and mine engineering.

• Geo-data Geology

Mining

• Mining Focal Issues

-Total ROM production: 680 000t

Handling of all geological data regarding the ore resource and reserve and is responsible for its integrity. This data is gathered by the Exploration and Production geologist and consist mainly of drill core descriptions, lab analyses and ore body interpretations. Using a computer program to create 3D images of the ore body and a block model which indicates the varying metal values in different areas.

-Waste development

: 4522m (356 026t)

-Ore development

: 359m

-UG exploration

: 44 000m

-Grade

: 8.89%Zn, 1.65%Pb

-Total Materials

: 4100t/day per day

Chapter 2 | Mining

Beneficiation Plant At Rosh Pinah Zinc Corporation the ore processing method consists of a two stage differential froth flotation process with the production of a galena (lead) concentrate as the first stage (lead circuit), and sphalerite (zinc) concentrate as a second stage (zinc circuit).The tailings from the lead floatation circuit are fed to the zinc thickeners as the feed to the zinc flotation circuit. Both flotation circuits consist of rougher, scavenger and cleaner cells.

• Primary Equipment Fleet

-4x25t Bell plus 1 1x30t Elphinstone AD Trucks plus 1x40t -5xElphinstone production LHD’s (remote scoops) -4xAtlas Copco Twin boomer drill rigs -2xAtlas Copco Ring drilling rigs-Simba’s -1xDown-the-hole raise drill-CMS -4XLM 75 Diamond drill rigs -1xBoltec -1xBell Scaler

Basic Beneficiation Plant Flow Diagram

• Future Opportunities

• Crushing Circuit

-Other payable metals (Au, Ag, Cu)

Mineral liberation utilizes a three stage crushing system and a two stage screening system producing a final-9mm particle size feed to the beneficiation plant.

-Ramp up to increase ROM production to 1Mt pa Engineering “Maintenance”

• Milling Circuit

• Main Functions

Provide excellent engineering solutions, technical support, and process optimisation to drive down cost. Do preventive maintenance to ensure availability of the operations. To upkeep a safe working environment.

In the milling circuit a 12x12 foot Marcy Grate discharge ball mill operates in close-circuit with a three-stage (primary, secondary and tertiary) cyclone system. The tertiary cyclone underflow produces a product with the particle size of 80% passing 106 microns which is fed to the lead circuit. The feedrate to the milling circuit runs between 85 and 90 tons per hour (tph) depending on the hardness of the ore.The annual milled tonnage for the ball mill is roughly about 660 000 tons.

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 2 | Mining

Rosh Pinah Overview Rosh Pinah Zinc Corporation (Pty) Ltd owns and operates lead and zinc mines. The company was founded in 1999 and is based in Rosh Pinah, Namibia. As of June 11, 2012, Rosh Pinah Zinc Corporation (Pty) Ltd operates as a subsidiary of Glencore Plc. Uncertainty exists with authorities requirements and how the current legislation is administrated. As the legislation is fragmented and not formalised, compliance is difficult to assess. However, Rosh Pinah has begun to develop an environmental management plan. As part of this process, the mine has undertaken an “environmental audit of current and past mining practice to determine impact with the objective to design an environmental management plan”.

11.19.2 Environmental issues Waste rock dumps stability: Waste rock is disposed on two dumps. These dumps have been constructed by end tipping, resulting in slopes at the natural angle of repose, which are inherently unstable, leading to slumping in various areas. The low rainfall conditions have resulted in a lack of a rehabilitation strategy for the waste rock dumps, as vegetation growth is limited. SRK is of the opinion, that the dumps are a safety hazard and as a minimum will have to be cut back to reduce the slope angle with a liability of about ZAR10 – 20m.

MINERAL AND ENERGY GUIDE NAMIBIA

Rosh Pinah The underground zinc and lead mine is located in an arid region of the southern portion of Namibia. The ore is concentrated and refined to produce metal oxides. The region receives 70 mm/yr of rainfall on average. The aridness limits surrounding farming activities to game farming. The town of Rosh Pinah is located adjacent to the mine and includes the new portion recently constructed to house the employees of Skorpion Zinc. An informal settlement adjacent to the hostel, the “Sand Hotel”, has developed at the foot of the western waste rock dump and extends over the hill adjacent to the dump. The area where the mine is located has been included in the recently proclaimed Ais Ais National Park. The Orange River, located approximately 30km to the east of the mine, is the only significant water course in the region.

11.19.1

Potential for acid rock drainage: No information is available on the geochemistry of the waste rock dumps, however, considering that the ore that is mined is sulfidic there is a high probability that some sulfides are present in the waste rock. This could potentially lead to the production of acid rock drainage but the potential is probably minimal given the low rainfall in the area. Furthermore, no signs of acid seep were observed at the base of the dumps. SRK, therefore, does not consider ARD a significant risk. Water contamination at the tailings dam: A single tailings dam, divided into a number of compartments, is present at the mine. Testing has not yet been undertaken to determine sulfide concentrations in the tails, however, relatively low concentrations would be expected as the bulk of the sulfides would be removed during mineral processing. Acidity is therefore not expected to be a significant problem at the tailings dam. Salinity is unlikely to be a significant problem at the tailings dam, as background water quality is poor. Geochemical testing did indicate that the dam is enriched with the heavy metals mercury, zinc, cobalt, barium, lead, selenium and cobalt. Initial groundwater monitoring has indicated the presence of a heavy metal plume below the tailings dam, moving in a southerly direction, however the lack

Compliance

Components of environmental legislation in Namibia are fragmented into different Acts and there is a lack of overarching legislation. In addition, several of the South African laws in practice at the time of Namibia’s independence in 1990, remain in force by virtue of Article 14 of the Constitution of Namibia however these are often outdated and not necessarily enforced. Much of Namibian legislation is in draft form and there is uncertainty if and when several of the draft Acts will be promulgated. The Environmental Management Bill is due to be promulgated in 2005 and will legislate the requirements of Namibia’s Environmental Assessment Policy.

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Chapter 2 | Mining of receptors below the dam would imply that exposure to this contamination is minimal. Therefore, the risk associated with this plume is also considered minimal and SRK is of the opinion that at closure it is unlikely that any groundwater remediation measures would be required around the tailings dam. Informal settlement sewage: A seep below the toilet facilities of the informal settlement was observed. It is suspected that this is generated by sewage effluent from the toilet facilities daylighting on surface. While the informal settlement is not strictly the mine’s responsibility, the mine constructed the toilets on mine property. Therefore, the mine may be required to implement some form of remedial measures once the informal settlement is removed. To cover this, SRK proposes a sensitivity contingency of ZAR1 – 1.5m. Hazardous material handling: Historically, hydrocarbon housekeeping management has been poor, resulting in soil contamination around the workshops over an area of approximately 1Ha. It is reported that hydrocarbons have not been detected in the groundwater. It is SRK’s opinion that this lack of hydrocarbons in the groundwater is an artefact of the lack of appropriately placed boreholes, rather than an indicator that the groundwater has not been contaminated. However, the lack of receptors downgradient minimises the risk. Asbestos has been used extensively as a construction material on the mine with offices, shops and the school constructed from asbestos. The pipeline from the Orange River to the mine (300 mm OD) is also constructed from asbestos. At closure, disposal could represent a significant cost. The mine believes that all PCB contaminated oils have been removed however, they are still awaiting receipt of the final clearance certificate. Used oil is collected for recycling. Waste disposal: All other waste from the mine, including grease, oil filters, redundant plastic and rubber components from the plant and vehicles and domestic rubbish generated by the mine, is transported to the mines waste site on the waste rock dump where it is burned on a daily basis. Closure of this dump represents a liability as it is expected that the mine will be required to ensure that seepage from the area is minimised. It is SRK’s opinion that this could cost in the region of ZAR1 – 4m.

Land degradation: Land degradation has primarily been caused by the construction of the waste rock dumps and the

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Air emissions: The tailings dam is a significant source of dust and has resulted in numerous complaints from the local community. Limited remediation is possible with vegetation establishment difficult. SRK is therefore of the opinion that the practicable closure strategy will be to rock clad the dump. Operationally, the mine has applied Dust-a-Cide to the northern slope, adjacent to the village as a means of dust control. The mine also attempts to operate the tailings dam so that the horizontal surfaces are kept wet. It is reported that although some dust is generated from the waste rock dumps, the volumes generated are insignificant. The mine undertakes regular dust monitoring. Community relationships: The “Sand Hotel” is a safety risk, as it encroaches on the waste rock dump. Furthermore, the presence of the community is reportedly unsettling the residents of the hostel, as the noise from the community is excessive. Rosh Pinah and Skorpion have apparently come to an agreement with the community that each mine will provide a ZAR1m to relocate the settlement to a flat area to the west of the Rosh Pinah town. It is reported by the mine that the community are eager to move. Social issues: Should the mine close in five years’ time, the implication is that the work force will be made redundant. This will impact on the mine workers and their dependants as there is little employment opportunity in the region. It is expected that at closure, there will be a significant departure of people from the town. This would impact significantly on the town’s economy. The mine is however, of the opinion that the area could be developed for tourism and are investigating, on an ad hoc basis, potential tourism opportunities. Lack of planned and appropriate management of these social issues could result in a significant risk to Exxaro’s reputation. The modified focus exploration strategy aims to increase mine life to beyond ten years to ensure the sustainability of Rosh Pinah mine’s workforce and that of the region. Closure planning and costing: There is currently no closure plan in place but it is understood that a closure risk assessment is to be undertaken shortly. It is assumed this will be followed by the development of a closure plan. The mine has estimated its liability for immediate closure to be ZAR45m. Of this ZAR45m, ZAR7m is allocated to demolition costs and ZAR38m is allocated to restoration costs. It is SRK’s opinion that this estimate is insufficient to cover potential remediation at closure, particularly if the slimes dams require rock cladding and the asbestos on site requires disposal as hazardous material. It is estimated that the shortfall is some ZAR45m. It must also be noted that the incorporation of the mine into a national park may result in stringent closure requirements being applied to the mine. At this stage it is not possible to quantify this risk, as the requirements of the Park has not been defined. As there have been no legislative requirements in Namibia requiring the mine to establish a closure fund, no closure capital is available. There is however, a provision of ZAR35m in Mine budget to address closure.

MINERAL AND ENERGY GUIDE NAMIBIA

Saline water management: Given the low rainfall of the region, storm water management is not an issue, however, discharge from the aquifers results in an accumulation of water underground. Underground water is stored in an underground sump and recycled back into the mining process. More recently and prior to the construction of the underground sump, the underground water was pumped to the tailings dam where it was allowed to evaporate. In addition, water within the plant that has becomes too saline from recycling is bled to the thickener for disposal on the tailings dam. Historically, underground water and excess plant water was discharged from the mine into the veld or it was used for irrigation of the golf course. This may have led to soil contamination due to the naturally high groundwater salinity and the salinity arising from the plant, however no monitoring has been undertaken to assess the situation. SRK are of the opinion that an investigation into potential contamination is required (estimated cost of ZAR0.25m)

tailings dam. The construction of a small open pit at the foot of the mountain has also resulted in some land degradation. As there is little natural vegetation in the area, the presence of un-vegetated waste rock dumps does not have a significant visual impact, as the waste rock blends into the surrounding landscape.

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 3 | Diamonds

Chapter 3 Diamond

MINERAL AND ENERGY GUIDE NAMIBIA

DIAMOND

Diamond Commissioner Kennedy Hamutenya

The first offshore diamond deposit was discovered by Sammy Collins at Wolf Bay in 1959.Sammy Collins also founded the Marine Diamond Corporation (MDC) in 1961.

the sea current during voyage. Imperfect stones tend to fracture and disintegrate, while stones with less imperfections are able to complete their journey whole.

Given the fabulous stories and legends surrounding the onshore diamond deposits in the Namib Desert, it poses no surprise that this extraordinary tale of diamond discovery continues beneath the sensual waves of Namibia.

Offshore diamond production in Namibia has now surpassed onshore production, as 2001 marked a record breaking 1.6 million carats from the seabed, with 99% being of gem quality.

MINERAL AND ENERGY GUIDE NAMIBIA

The discovery of the first offshore diamond deposit at Wolf Bay by Sammy Collins in 1959 was indeed a defining moment in the history of diamond mining in Namibia, heralding the birth of a completely new industry. About 29,000 carats were discovered offshore in 1990, rising to 623,000 in 1997.In 1998, offshore mining produced 400,000 carats of 95% gem quality diamonds. Icy quivers of excitement coursed through the industry in 1999, as marine diamond mining production peaked at over 2,000,000 carats, including a single day when 16,271 carats were recovered. The excitement caused by the discovery of offshore diamond deposits is only rivalled by the fact that thanks to Mother Nature, 99% of diamonds produced in Namibia are of gem quality. Gem quality in diamonds is determined by the level of imperfections found in them. Perfections and imperfections on diamonds are largely a result of the amount of stress and weathering that the stones are subjected to by

Namibia is currently the only country that industrially mines diamonds from the sea bed, and as such a global leader and trend setter in the area of Marine Diamond Mining and Technology. Diamonds were formed deep within the earth’s core billions of years ago and only a small number survive the journey to the earth’s surface, borne through volcanic pipes known as kimberlites. The high concentration of diamonds in kimberlites makes them attractive to large scale mining. Far from the glamour associated with diamonds, the early mining process was anything but. In 1930 Namibia, through to the 1950’s, prospecting was carried out manually, using pick axes and shovels to excavate from the surface earth to the bedrock. Excavated material was then placed in a hand operated cylindrical sieve through which the sand was screened. Everything smaller than 1.5mm or larger than 30mm, which wasn’t cemented gravel, was discarded. The gravel that made it through was then transferred into a hand operated trammel for classifying. At the end of this laborious process, each diamond discovered was logged against a section and the zone from which it came; a record that was essential to decisions made on where to mine.

Diamond is said to have perfect cleavage, meaning it will separate neatly along these lines rather than in a jagged or irregular fashion. It is along this cleavage that the cutter sets to work, unearthing the brilliance within. “The cutter knows the diamond intimately. As he examines the rough beauty in his hands, he determines how it should be shaped to best retain the utmost brilliant effect.”

POLISHING Adamantine luster. Pure transparency. Powerful refraction. Qualities associated with diamond. They are bestowed on it in the third phase of the manufacturing process referred to as polishing. The polishing action is done with a cast iron wheel, into which diamond dust has been rubbed to produce a sand paper effect. After a stone has been cut and polished, it is then classified again, this time by its cut, color, clarity and carat weight, also known as the “Four Cs.”

Conflict-free Mining Namibia plays a bold role as a pioneer for conflict free diamonds the world over. As one of the pioneer countries that initiated the Kimberly Process, the Namibian diamond industry is seen as a model for proper regulation and oversight in the global mining industry. Namibia remains a testimony to how the resources and revenues generated from diamonds can be used to develop a country, its infrastructure, education, health and socio-economic structures of communities.

Today, the diamond mining process in Namibia has developed tremendously, as the diamond industry employs innovative exploration techniques to detect and assess the potential of land based and offshore targets. As laborious as the process of mining sounds, the rough diamond is just about beginning its journey in the manufacturing process and definitely far from ready for the little black or blue box. Rough diamonds, as the end product of the mining process is called, still have to go through the processes of manufacturing, which is broken into; sorting, cutting and polishing.

SORTING Once mined, rough diamonds are delivered to experts who sort, categorize and assign value to them. It is here that industrial quality diamonds-which are small, lower quality stones-are identified.

Those diamonds that are of gem quality are classified into thousands of categories based on size, shape quality and color. The majority of diamonds fall within a range of standard colors from colorless to faint yellow or brown tints. Almost all rough diamonds have some distinguishing marks, known as inclusions, which make each piece unique.

CUTTING In ancient times, diamonds were left uncut and mounted into their settings, giving the piece of jewellery a dark, deep mysterious look. However,nothing compares to the fiery brilliance of a beautifully cut diamond.

NAMIBIAN DIAMONDS TODAY, TOMORROW AND FOREVER Namibia’s diamond resources continue to enjoy a very good run of production, with 2008 marking the centenary of the first diamond that Zacharias Lewala picked up, which resulted in the successful and dynamic diamond industry in Namibia. The diamond industry in Namibia has witnessed extensive growth over the years, as offshore mining activities have now even surpassed onshore mining. This growth has thrust Namibia in the forefront of the diamond industry, not only in Africa but internationally. However, this growth had its limitations, as up until 1999 Namibia could only export rough diamonds to other countries where the manufacturing process was concluded. This situation led to the Diamond Act being passed into law in 1999. The introduction of the Diamond Act created a favourable environment for the diversification and expansion of the diamond industry in Namibia. The Diamond Board of Namibia was also set up to promote the sustainable growth and diversification of the Namibian diamond industry, promote diamond security, and the monitoring and assessment of the performance of the upstream side of Namibia’s diamond sector. This development was a turning point in the diamond industry in Namibia, as it positioned Namibia as not just a producer of rough diamonds, but a major player in the global diamond industry.

MINERAL AND ENERGY GUIDE NAMIBIA

These industrial diamonds are used as drill bits and lathes in equipment.

The international diamond industry, government and NGO’s of member countries have a zero tolerance policy on diamond activities globally-from mine to retail. This is achieved through the Kimberly Process, the System of Warranties, the World Jewellery Confederation and the Council for Responsible Jewellery Practices.

Chapter 3 | Diamonds

NDTC in the diamond pipeline

ince Namibian independence in 1990, diamond has remained the most economically significant mineral commodity produced by the mining industry in the country. For years, the country has produced about 2% of the world’s gem-quality diamond and is in the top ten ranked producers of gem diamond in terms of value. Namibia is world-renowned for its gem quality placer diamonds that occur along the Orange River as well as, onshore and offshore along the coastline. The Namibian diamonds were originally transported via the Orange River into the Atlantic Ocean and distributed northwards by long-shore currents. Diamonds typically occur as placers within raised and “drowned” beach terraces, gullies in the bedrock, and eluvial deposits in wind corridors within southern Namibia. As onshore diamond reserves are depleted, future diamond production will predominately come from the seabed. Mid-water to deep-water mining operations requires sophisticated marine vessels and crawlers that are capable of retrieving diamondiferous gravels/sands from the seafloor. The major diamond producing company in Namibia is Namdeb Diamond Corporation (Pty) Ltd, which accounts for an average of 1.6 million carats per annum. Other companies mining diamonds in Namibia include Sakawe Mining Corporation (Samincor) and Diamond Fields Namibia (Pty) Ltd. For years, Namdeb Diamond Corp. (Pty.) Ltd, a joint venture between De Beers Centenary AG and the Namibian Government (50% each), was the country’s leading diamond producer. In 2006, Namdeb, its contractors, and its subsidiaries produced more than 2,000,000 carats (400 kg).

MINERAL AND ENERGY GUIDE NAMIBIA

The partners also negotiated the Namdeb Sales Agreement in 2006, which created the Namibia Diamond Trading Company (NDTC), to sort and value the volume of Namdeb’s production that would be marketed to the domestic diamond-cutting industry.

Orange River

Off-Shore

On-Shore

Diamond mining along the Orange River accounts for 5.2% of the total revenue produced by Namdeb and for 2.8% of total carats produced. The Daberas Mine is the main production facility in the Orange River mining area, and capable of treating nearly four million tons of diamond-bearing gravel a year.

DeBeers Marine, Sakawe Mining Ltd (Samincor), and Diamond Fields Namibia carry out offshore diamond mining in Namibia. Namibian marine diamond recovery has now surpassed traditional land-based diamond production. Namibian marine diamonds are calculated by experts to contain some 2 billion carats.

Gem quality diamonds are mined from marine terrace gravels and pocket beaches along Namibia’s coastline from Oranjemund to Luderitz. The 2003 production figure for diamond Mining Area 1 was some 500 000 carats. The plant produces an estimated 200 000 carats per year, by processing diamondbearing material.

Chapter 3 | Diamonds NDTC sorting role In 2007, the Namibia Diamond Trading Company (NDTC) was founded as a joint collaboration effort between the Namibian Government and De Beers. The NDTC, after its inception, immediately delved into the sorting, valuations, sales and marketing of Namibia’s extensive diamond resources. Driven by the grand purpose of optimising the full value of diamonds for Namibia, the NDTC fits the diamond pipeline through adding value to diamonds and affecting a strong diamond distribution chain, whilst driving downstream beneficiation for Namibia. The NDTC adds immediate value to the rough diamonds mined by Namdeb through its sorting and valuing activities; in 2011 over a million carats of diamonds were handled by NDTC. This skilled categorisation process enables a proportion of Namdeb’s diamonds to feed into the global De Beers supply and be sold to world leading international diamond businesses at the optimum price, thereby maximizing the returns for Namibia on her natural resources. Meanwhile, the sorting and valuing process also identifies the types of diamonds that can support the domestic cutting and polishing industry in Namibia. Namibia’s diamond manufacturing industry has grown to what it is today thanks almost entirely to the rough diamonds supplied by NDTC. The N$ 2 billion of rough diamonds sold to the local industry by the NDTC over the years shows the company’s commitment to adding value in country and supporting the development of a strong sustainable local industry. For operations to contribute to maximizing the value of our diamonds, the company ensures that everyone in the area masters the art of diamond valuation, which is the art of visualizing how the FOUR C’s (Carat, Cut, Clarity, and Colour) relate to each other in a particular rough diamond stone in order to determine its value.

This covers a value chain starting from receiving the diamonds from the mine as Run Of Mine to a final output of fully sorted and valued diamonds in more than 12 000 price categories in which rough diamonds can be sorted.

Overview and Structure NDTC’s Operation consist of the following four main functional areas: 1.

Rough Diamond Division responsible for the cleaning, processing, sorting , valuation of rough diamonds, training of staff and all other diamond administrative activities (consisting of the +2 c and -2 c diamond sorting areas, Diamond Academy, Diamond Administration and Outbound Offices)

Diamond Risk Management responsible for all security related matters at NDTC.

Information Technology responsible for all our IT needs and data matters at NDTC.

Technical support Services which looks after the design, installation and maintenance of the various infrastructure components of the company.

Production NDTC handles the entire rough diamond production of Namdeb.

Total intake from Namdeb

Production area

2008

2009

2010

2011

Diamond Area 1

1,034,280c

430,359c

523,009c

374,211c

Atlantic Area 1

1,68,815c

651,733c

974,849c

895,699c

Marine Dredging

35,651c

Total

2,138,746c

1,082,091c

1,497,859c

1,218,128

Rough diamond intakes for the years 2008-2011

How NDTC weathered the storm

NDTC had to introduce voluntary separation in the wake of recession period. The company had put strict requirements to sit- holders (companies contracted to do the cutting and polishing duties on behalf of NDTC) to have a fully-fledged manufacturing company or a factory locally where they can do their operations in order to benefit the local people through employment creation. Despite, new markets of China and India around 2010, the business environment and the recovery process was impacted negatively by uncertainty by the volatility in the exchange rate, particularly the Indian Rupee/United States dollar, the protracted Eurozone crisis, a slowdown in demand in the new markets and a general lack of liquidity.

MINERAL AND ENERGY GUIDE NAMIBIA

Barely two years into its operations, the entire diamond industry was hit hard by the global recession and forced to downsize and abruptly shift strategy.

Chapter 3 | Diamonds The company’s operations were paralyzed by the recession and it nearly cast doubt over its existence as diamond demand was very low and affected revenue collection. Towards 2011, the Namibia cutting and polishing industry saw a 38% increase in overall employment as the diamond sector bounced back. The company managed to improve the amount of diamonds bought by their sight-holders for beneficiation on the year ending 2011 despite diamond prices going down at that period.

Beneficiation is central to the NDTC’s philosophy and the company’s business model, and NDTC is committed to working with all stakeholders in the long term to help the country achieve its Beneficiation aims and objectives. Significant progress in this area has been made through partnerships with Sightholders and other stakeholders since the inception of the NDTC in 2007. Key achievements include:

That year, sight holders purchased and beneficiated approximately N$1.8 billion worth of rough diamonds surpassing N$1.2 billion achieved in 2010, and indicating an 8% increase in revenue growth. The sight-holder selection process has led to an increase in the number of factories to be supplied by the NDTC in the new contract, as well as an increase in the value of diamonds to be sold. The NDTC has improved its tax contributions to the Government by 11% to N$88m as compared to 2010 which was recorded N$78.4m. In April 2012, the NDTC entered into three-year agreements with 12 Namibian cutting and polishing factories. The three-year supply agreements are at the core of the Namibian Government’s objective of promoting value-addition activities of Namibian raw materials, and underpinned one of the NDTC’s primary objectives, which are to facilitate the creation of a sustainable diamond cutting and polishing industry in Namibia. Through these three-year supply arrangements, the company facilitated the creation of approximately 1 300 jobs in the Namibian cutting and polishing industry. Besides global economic storm, the Namibian diamond industry has faced various challenges such as longer production cycles, bureaucracy and high labour and production costs in comparison to other cutting centres. The amount of midstream rough and polished stocks in the pipeline, resulted in reduced demand for new rough stones in the short-term from NDTC sight-holders (clients), with total sales to local cutting and polishing companies estimated at approximately N$ 1.5 billion for the 2012 calendar year, decreasing by approximately 7 per cent when compared to total sales of N$ 1.6 billion for 2011.

MINERAL AND ENERGY GUIDE NAMIBIA

The creation of hundreds of jobs in the diamond industries achieved through the establishment of the NDTC.

•

Completion of two and a half years of operations at NDTC, with over $US345 million (N$ 2.61 billion) of rough diamonds being sold to the Sightholders of NDTC for the period October 2007 to March 2010, for the purpose of local cutting and polishing.

•

Continued introduction of the latest, leading edge diamondrelated technology in the NDTC operations.

•

Skills development of Namibian employees, in areas such as Key Account Management and operation and maintenance of diamond-related technology.

•

The development of local marketing activity.

•

Stimulus for the development of jewellery design capabilities, through programmes such as the NDTC Shining Light Diamond Design Awards in Namibia.

•

The potential for other value adding activities through the businesses of the NDTC and Sightholder companies, and potentially in other sectors of the economy.

While excellent progress has been made to date, it should be recognised that successful and sustainable Beneficiation is a long term process. It requires solid partnerships of the type that De Beers and the DTC are experienced in establishing, with each party playing its specific and important role:

Out-dated legislation however continues to further compounds the challenging market conditions that the industry faces. NDTC has contributed to the production of consistent, accurate and quality right first-time assortments for the about 1.6 million carats of Namdeb Holding’s 2012 total annual production.

•

Government of the Republic of Namibia creating an enabling business environment.

•

NDTC operations providing access to the appropriate rough diamonds.

•

Sightholders showing manufacturing

commitment

in-country

NDTC Facts and figures:

In 2012, NDTC had paid out N$ 80 million to its shareholders, bringing the total dividends paid over the five-year period to a whopping N$700 million. The exceptional growth in revenue has also been attributable to increase in consumer demands for both rough and polished diamonds and the concomitant strong price growth.

Beneficiation What is beneficiation? In the diamond industry the term beneficiation refers to domestic downstream activities that add value to locally-mined rough diamonds. It includes the process of sorting and valuing rough diamonds, their subsequent cutting and polishing, diamond trading, and the manufacture of diamond jewellery. It can also include the local marketing of diamonds.

•

Sorts and values in excess of 1 million carats from Namdeb annually

•

12 Clients known as Sightholders receive rough diamond supply from NDTC during sights that take place ten times a year

•

10% in value of Namdeb production sold directly to manufacturers for purposes of creating Namibian brands

•

NDTC encourages jewellery design capabilities in Namibia through the NDTC Shining Light Diamond Design Competition

•

Maintains and develops employment opportunities and broadens the skills base in the Namibian Diamond Industry

Chapter 3 | Diamonds

Increase efficiency. Operate safely. Lower environmental impact. Reliable performance. ...all with the help of our wide range of mining, industrial, marine and automotive lubricant products. We offer complete onsite lubricant maintenance services as well as automated greasing technology for the smoothest engine and machine performance.

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Web: www.lubs.com.na 93

MINERAL AND ENERGY GUIDE NAMIBIA

MOBILFLUID 424 MULTIPURPOSE

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Chapter 3 | Diamonds

Debmarine Namibia is a recognised world leader in marine diamond exploration and mining technology.

Our Vision To be the global benchmark in marine mining. Forever.

Our Mission To mine marine diamonds sustainably.

Introduction Debmarine Namibia is a joint venture marine diamond prospecting and mining Company, owned in equal shares by the Government of the Republic of Namibia and De Beers. The Company is a wholly owned subsidiary of Namdeb Holdings (Pty) Ltd. Debmarine Namibia became operational in 2002.

Operations: Exploration and mining technology

MINERAL AND ENERGY GUIDE NAMIBIA

Debmarine Namibia operates in the Atlantic 1 mining licence area off the southern coast of Namibia, at water depths of up to 140 meters. The Company operates five diamond mining vessels, namely Debmar Atlantic, Debmar Pacific, !Gariep, Grand Banks and the Mafuta. Two mining technologies are deployed that suit different ground conditions are deployed, namely the airlift-drill and the crawlermounted dredge technology. Resource development is carried out by scanning the seafloor using geophysical mapping followed by sampling to determine the reserve inventory. The inventory, together with other parameters, is processed into a mine plan, which is aimed at ensuring the sustainable use of the resource for the long-term benefit of the stakeholders. The production is from the ocean floor using highly advanced technology and supported with sophisticated tracking, positioning and surveying equipment. Debmarine Namibia charters MV Coral Sea, for sampling. An Autonomous Under Water Vehicle is chartered for geophysical data work. Offshore logistical support services are provided to the mining vessels by means of fixed and rotor wing aircraft and tug services.

Otto N. Shikongo Chief Executive Officer, Debmarine Namibia

Safety Debmarine Namibia is committed to Zero-Harm in terms of the safety of its employees. Participation in regular safety training programmes ensures continuous safety risk awareness and management.

Health The Company has an on-site voluntary counselling and testing (VCT) programme, and anti-retroviral therapy is available free of charge to all affected employees and their life partners. The Company conducts regular on-site baseline screening check-ups for early identification for chronic and acute illnesses and to educate, counsel and refer employees with chronic and acute illnesses.

Skills development Debmarine Namibia employees make the business. It is with this in mind that the Company puts significant emphasis on skills development through a wide range of programmes including; bursaries, technical training, long-term trainee, self-study assistance, leadership development and safety awareness. Skills development is critical to the Company and ensures that our investment in the development of local talent empowers our employees, our communities and fosters economic opportunity for Namibia in support of Vision 2030.

94 94

Chapter 3 | Diamonds The Namibianisation of the workforce is a key initiative that is driven at the highest level. Currently Namibians make up 82% of the DBMN workforce, a major increase from 18% when the Company migrated from South Africa to Namibia in 2002.

in addressing social, business, mining, environmental and ethical standards, through the Diamond Best Practice Principles Assurance audit programme, as a JV member of the De Beers Group of Companies. Debmarine Namibia continues to excel in all aspects of its operation, notably in the areas of safety, health, skills, development, environment, sustainability and mining.

Environmental responsiveness Debmarine Namibiaâ&#x20AC;&#x2122;s prospecting and mining operations are certified to the ISO 14001 international standard. This standard specifies requirements for an environmental management system to support environmental protection and prevention of pollution in line with legal requirements and socio-economic needs in close consultation with key stakeholders and affected parties.

Values Teamwork, Integrity, Excellence and Respect.

FAST FACTS:

Company name

Debmarine Namibia

Location

Windhoek (location of the Head Office) Atlantic Ocean (location of mining vessels)

Operations commenced

January 2001

Chief Executive Officer

Otto N Shikongo

Type of mining

Offshore marine diamond mining

Number of mining vessels

Five mining vessels: Debmar Atlantic, Debmar Pacific, !Gariep, Grand Banks and Mafuta

Production output in 2014

1.27 million carats

Social responsibility

For further information, please contact:

The Companyâ&#x20AC;&#x2122;s Social Responsibility Fund continues to make donations to worthy causes with a focus on education in the areas of science and technology, as well as through the Debmarine-Namdeb Foundation.

Debmarine Namibia Corporate Communications

DBMN is ISO14001, International Safety Management (ISM) and OHSAS 18001 certified, in line with its commitment to safety and environmental management. The company demonstrated compliance

Stella Auala Communications Manager Tel: +264 61 297 8643 Fax: +264 61 297 8100

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 4 | Geology

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 4 Geology

Chapter 4 | Geology

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 4 | Geology

GEOLOGICAL SURVEY Director: Geological Survey Dr Gabi Schneider Director Dr. G. Schneider E-mail: gschneider@mme.gov.na

The main objectives of the Economic Geology Division are to Investigate, report and promote Namibia’s Minerals resources and their mineral potential in order to attract local and foreign investments as well as to create sustainable development of Namibia’s mineral resources.

• Engineering and Environment • Geochemistry and Laboratory • Geophysics • Geoinformation • Regional Geoscience

MISSION STATEMENT Enhance knowledge and awareness of Namibia’s geological resources through scientific investigation as well as application and dissemination of quality research data. Facilitating the search for and the assessment of mineral resources, geological engineering and land use planning through sustainable development with due regard to the environment.

OBJECTIVES

MINERAL AND ENERGY GUIDE NAMIBIA MINERAL AND ENERGY GUIDE NAMIBIA

The Geological Survey of Namibia, as custodian of Namibia’s rich endowment of geological resources, facilitates the responsible development and sustainable utilisation of these resources for the benefit of all Namibians. • Provide geoscientific information through research to promote sustainable development and investment in Namibia. • Guide land-use decisions to ensure the availability and sustainability of resources for the current and future welfare of our society • Stimulate investment in Namibia’s Mining Sector in order to contribute to the development of Namibia’s economy • Create awareness of the earth sciences in order to enhance the understanding of the geoenvironment and its interaction with the life-supporting system of the Namibian people. The organisation comprises six divisions: • Economic Geology

Major activities of Economic Geology Division Earth Data Namibia Management All the information collected by various exploration companies for a period of over one hundred years, by means of mapping, surveying and exploration reports is stored in the database. Analogue data received from exploration and research related activities has been transformed and stored securely to digital format through a continuous process of scanning and entering of this data into the Earth Data Namibia (EDN) database. Link to the web presence of the Information Management system Earth Data Namibia.

Economic Geology Mineral Resources Information Series Compiling mineral occurrence descriptions for each of the 1:250 000 (157KB) Geological map sheet using archival exploration reports and other sources.

Provision of Geological /Exploration Data Exploration or historical data stored digitally within our Earth data Namibia (EDN) database are vital to prospectors, investors or researchers and are therefore being requested on a daily basis.

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Chapter 4 | Geology Reviewing and assessment of Exploration Major Tasks of the Division • Independent environmental monitoring and inspection of Reports active mines. Reviewing and assessing exploration reports, which are submitted by exploration companies in accordance with the minerals (Exploration and Mining) Act of 1992

• Monitoring and assessment of risk potential of abandoned mines.

Promote Mineral Investments

• Operation of environmental, rock and soil mechanical laboratories

Promoting mineral investments by attending and exhibiting at major local and international mineral investment conferences and trade fairs such as Ongwediva trade fair, Keetmanshop Industrial and Agricultural show, Windhoek Show Grounds, PDAC, INDABA, SEG etc.

• Contribution to coastal management, urban and land use planning.

• Steering the Strategic Environmental Assessment (SEA) for the Uranium Rush and Strategic Environmental Management Plan (SEMP) office

Environmental Geology

Dimension stone Catalogue Namibia produces a wide variety of dimension stone consisting mainly of marbles, granites, diorites and sodalite. The Dimension stone industry has been in existence since the beginning of the last century; however, its potential has not yet been fully developed. Therefore, the Economic geology division is currently busy with compiling a Dimension stone Catalogue.

Plays a leading role in the protection of vulnerable scarce natural resources such as water, soil and biodiversity in the mining and related environment

Engineering Geology Deals with engineering geology/ geotechnical problems/ risks associated with different various soil and rock formations throughout the country.

Ore Deposit Research The division continues to identify minerals currently in demand and review the literature with the aim of highlighting potential prospective areas with some Rare earth and tungsten mineral deposits has been undertaken by economic geology staff members.

Core shed Facility The Economic geology division continues to maintain and manage the sample storage facilities in Windhoek and Tsumeb. The two facilities house valuable geoscience information in form of diamond drill core and reverse percussion drill chip samples and are accessed by mineral prospectus, mineral explorers and researchers on request. Namibia is regarded as highly prospective for the discovery of mineral deposits and the Economic Geology Subdivision will continue to highlight highly prospective areas through its products to help attract the much-needed investments in the minerals sector of the Namibian economy.

ENGINEERING AND ENVIRONMENTAL GEOLOGY The Division of Engineering and Environmental Geology (DEEG) consists of 2 Subdivisions - Environmental Geology and Engineering Geology.

9999

• to deliver high quality chemical and mineralogical analysis of rocks, minerals, soils, stream sediments, water and other environmental materials for our customers • to use internationally recognized methods fit-for purpose to provide added-value to our products or services • to upgrade the laboratory facilities and maintain the laboratory equipment in order to keep up with the fast evolving analytical techniques without compromising the quality and standard of services offered to our clientele • to conduct a country-wide baseline geochemical mapping through the Regional Geochemical Surveying Programme • to manage the archival geochemical data through the Earth Data Namibia database All these objectives are achieved through the various, but related tasks of the two existing Subdivisions of the Geochemistry and Laboratory Division:

Analytical Geochemistry The Geochemistry laboratories are equipped with a wide range of modern facilities and equipments to provide analytical services to a wide range of clientele.

Regional Geochemistry The Regional Geochemistry Subdivision focuses on the country-wide baseline geochemical sampling programme that commenced in 2000.

MINERAL AND ENERGY GUIDE NAMIBIA MINERAL AND ENERGY GUIDE NAMIBIA

Mining and exploration companies are actively exploring for Precious and semi-precious stones, uranium, Precious metals, base metals, rare metals, industrial minerals. Namibia also has several active dimension stones quarries and processing plants. Furthermore, companies are exploring for fossil fuels, of which the offshore Kudu gas field will be exploited in the near future.

GEOCHEMISTRY AND LABORATORY The Geochemistry and Laboratory Division is empowered to provide high quality geochemical services to the country’s mineral sector. The main objectives of the Division are:

Chapter 4 | Geology GEOPHYSICS

National Earth Science Museum

Geophysics is one of six operational divisions within the Geological Survey of Namibia. The Division is responsible for the acquisition and interpretation of geophysical data for the mineral exploration sector and research institutions. The Geophysics Division consists of three subdivisions namely Airborne Geophysics, Ground Geophysics and Interpretation Geophysics.

Houses the largest collection of Namibia’s mineral, rock and fossil record.

The division is responsible for the interpretation of geophysical data for field mapping, economic geology and the environmental monitoring. They review interpretation programmes and coordinate the activities with other divisions and other government agencies.

Ground Geophysics Is responsible for the interpretation of geophysical data for field mapping, economic geology and the environmental monitoring.

Airborne Geophysics

National Earth Science and Energy Information Centre: Library and Sales National Earth Science and Energy Information Center is a specialized reference library on earth science and is opened to the public 8h0012h30, 14h00 -16h00.

Publishing In-house publishing of an annual earth science journal (Communications of the Geological Survey of Namibia), Memoirs, Thematic works (Bulletins), periodic bibliographies and handbooks (e.g. Mineral Resources of Namibia) as well as special publications (e.g. Fossils of Namibia).

Is responsible for all aspects of airborne geophysical surveys Interpretation Geophysics It provides complementary interpretation services to airborne and ground geophysics.

Cartography Subdivision A fully-equipped and computerised drawing office and darkroom for digitising, graphic and map production, map film processing and photographic plate making.

GEOINFORMATION The Geoinformation Division comprises of the National Earth Science Museum which houses the largest collection of Namibia’s mineral, rock and fossil record; the National Earth Science and Energy Information Centre (NESEIC) - Library and Sales, a specialized reference library on earth science that is open to the public; and the Cartography Subdivision.

REGIONAL GEOSCIENCE The Regional Geoscience Division is responsible for conducting geological mapping and the production of geological map data, which are available both in digital and hardcopy format. Details of available maps and digital data are given in the downloadable catalogue.

MINERAL AND ENERGY GUIDE NAMIBIA

Understanding the geological map? Geologic maps show the underlying bedrock (solid rock at or below the land surface). Surficial maps depict geologic materials, e.g, gravel, sand, silt, clay and till. Apart from showing the distribution of bedrock and surficial deposit within a specific geographic area, geological maps also provide information on the internal characteristics of each map unit.

• Environmental consulting (e.g. Cleaning up environmentally damaged sites, pollution prevention, locating waste-disposal facilities) • Evaluation and prevention of geo- hazards (landslides, earthquakes, erosion potential, and land subsidence) • Engineering (e.g. Buildings and foundations, planning transportation and utility routes)

Some common uses of maps: • Exploration and developing mineral resources (e.g. Oil and gas, base metal and industrial minerals)

• Town planning (e.g. Development of local land use master plans and evaluation of land use proposals and waste disposals sites)

• Exploring for and developing ground-water resources • Development of energy resources, e.g, geothermal.

• Evaluating property (Proposal tax assessment and land acquisition)

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Chapter 4 | Geology Benefits of geological maps

• Basic earth science education and research. • Assisance with public policy decsisions.

• Availability of the maps to society- “public goods’’ • Increased credibility of reports and studies • Time saved in project completions

What is the value of a 1:50 000 scale geological map sheet? • N$ 600 000 this represents the average amount of money a company would spend to collect the information provided by a published geologic map sheet.

• Create and deliver scientific knowledge

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 4 | Geology

Division of Engineering and Environmental Geology By: Israel Hasheela (Chief Geoscientist), Head of Environmental and Engineering Geology Division, Geology Survey

MINERAL AND ENERGY GUIDE NAMIBIA

This division is made up of two sub-divisions namely; Engineering Geology, and Environmental Geology. We conduct environmental geology surveys looking into mine pollution or mapping mineral contamination caused by mining or ore processing activities. What we would do in such surveys is, we collect samples(Soil,water,vegetation)within the vicinities of the mining activities, then a geochemical analysis is conducted on this samples to determine the level/concentration of various mineral contaminants(Cu,As,Zn,Pb,Cd,Hg,Co,Ni,Cr).Type of contaminants present would depend on the type of ore you are dealing with,wheter it is sulphidic ore deposit, like most of our base metal ore deposits that we have, or it perhaps uranium deposits. Knowing what type of ore youâ&#x20AC;&#x2122;re dealing with would therefore give you a hint on what sort of contamination you are dealing with. Apart from pollution investigation at active mines, we also assess risks posed by abandoned and unrehabilited mines. These are mainly sites that were operated before independence, when Namibia had

no Environmental law compelling mine operators to do rehabilitation after mining. This is therefore a legacy left on the government shoulders, to deal with. We have therefore established an inventory of these sites; thus far we have recorded ca 200 sites, varying in sizes. In assessing risks of such sites, we employ a methodology that allow us to determine risk level of the sites taking into account their potential to chemically contaminate, the physical risks they pose. We also advise on landuse planning interms of geological hazards, be it unsafe grounds due to geology, i.e. the faults, or areas contaminated by mining. Example Tsumeb We also run a lab that assists us in fulfilling our engineering and environmental geology investigation work. We also undertook a Strategic Environmental Assessment for the Uranium Province, which culminated into an Environmental management plan, this aims at maximizing benefits/synergies from our Uranium mines, and to minimize the negative impacts. It looks at cumulative impacts caused by mining and all related activities. In the management we therefore look at Environment, Social and Economic aspects. We have developed a set of areas that are annually assessed by a number of indicators and these provide us with an idea whether we are steering the region into the direction that we wish to go. This is very much a multi stakeholder process, and its success depends very much on everybody playing their role.

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Chapter 4 | Geology

Salt Pans in Namibia

What are salt pans? Natural salt pans are flat expanses of ground covered with salt and other minerals, usually shining white under the sun. They are found in dry climates. In Namibia salt pans occur along the coast, for example at Cape Cross, as well as further inland(Etosha Pan)

Salt in Inland Pans Inland pans produce far less salt than the pans along the coast. The known main inland occurrences of salt are those of Owamboland in the north, and Vertwall, Aminius and Arandis in the southern and central parts of Namibia. Only a few of the many pans scattered over Owamboland and the Etosha National Park contain salt. These are the Ngandjela and Ngandjela East Pans, the Otjivalunda Pans, situated west of the huge Etosha Pan, and the Ondangwaâ&#x20AC;&#x2122;s Salt Pan, immediately north of the Etosha National Park fence.

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The pans of Ovamboland,which belong to the inland pans, contain sodium sulfate, sodium carbonate as well as some sodium chloride(the latter better known as table or rock salt).For many centuries the salt crust (NaCl)on these pans has been used for domestic purposes by the Owambo people; the existence of the underlying soda ash (Na2CO3+NaHCO3)and thenardite (Na2SO4)has only been known since 1915.The latter are being used by the chemical industry in production, among others, of washing powder,paper,textiles and glass. During each rainy season at least part of the salt is dissolved and redeposited in the subsequent dry season.

Chapter 4 | Geology

A member of the Organisation of African Geological Surveys

Ministry of Mines and Energy

Annual Report Strategic Environmental Management Plan (SEMP) for the Central Namib Uranium Province 2013 May 2015

Prepared by

LAUNCH OF THE THIRD SEMP REPORT

Geological Survey of Namibia Earth Sciences for Namibia’s Sustainable Development

A member of the Organisation of African Geological Surveys

MINERAL AND ENERGY GUIDE NAMIBIA

The focus of the SEMP reports is on the assessment of compliance with 12 Environmental Quality Objectives (EQOs). Relevant data are presented to support the assessment.

122 indicators for the various EQOs are assessed according to a following colourcoded system:

Status:

NOT MET

IN PROGRESS

MET

EXCEEDED

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A member of the Organisation of African Geological Surveys

2011, 2012 AND 2013 SEMP REPORTS IN COMPARISON

Status (%)

NOT MET

IN PROGRESS

MET

EXCEEDED

2013

2012

2011

Earth Sciences for Namibia’s Sustainable Development

A member of the Organisation of African Geological Surveys

2011, 2012 + 2013 IN COMPARISON 100% 90% 80% 70%

EXCEEDED

60%

MET

50%

IN PROGRESS

30%

NOT MET

20% 10% 0%

2013

2 2012 Years

2011

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40%

Chapter 4 | Geology

A member of the Organisation of African Geological Surveys

Earth Sciences for Namibiaâ&#x20AC;&#x2122;s Sustainable Development

A member of the Organisation of African Geological Surveys

Acknowledgements

MINERAL AND ENERGY GUIDE NAMIBIA

The Namibian Uranium Association and individual Uranium Mines in Namibia NERMU/Gobabeb Challenges Government Ministries Utilities Municipalities

Earth Sciences for Namibiaâ&#x20AC;&#x2122;s Sustainable Development

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A member of the Organisation of African Geological Surveys

Road-show Governance implementation for the central Namib Uranium Province: Strategic Environmental Management Plan

R Leonard, I Hasheela, M Hijamutiti, GIC Schneider, T Wassenar, O Shaningwa, I Mupewa & I. Shaduka

Geological Survey of Namibia

Earth Sciences for Namibiaâ&#x20AC;&#x2122;s Sustainable Development

A member of the Organisation of African Geological Surveys

www.mme.gov.na Earth Sciences for Namibiaâ&#x20AC;&#x2122;s Sustainable Development

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http://www.mme.gov.na/files/publications/d57 2013%20SEMP%20Annual%20report%20final.pdf

Case Study |

North River moves towards construction phase North River Resources owns 100% of the Namib Lead-Zinc Project in Namibia. The Company has a clear vision: to become an established mining company in Namibia, and towards this, the Companyâ&#x20AC;&#x2122;s current objective is to deliver a 250,000 tonne per annum operation by reopening the previously producing mine on site as soon as practicable. Having demonstrated the robust economics associated with achieving this, the Company has been refining the process flow sheet over recent months to optimise the project. The project has a current JORC resource of 1,250,000 tonnes, with

resulting underground in-situ metal inventory of 30,709 tonnes of lead; 80,640 tonnes of zinc; 1.76 million ounces of silver. The Company has demonstrated the strong potential to expand this through further drilling, which would extend the life of mine beyond the initial 3 years. Located just 25km from the town of Swakopmund and 55km from the port of Walvis Bay, the Project benefits from excellent access to infrastructure. The Company is now focused on refining the Front End Engineering and Design ahead of a construction decision.

MINERAL AND ENERGY GUIDE NAMIBIA

North River Resources Brief Company History

James Beams Chief Executive Officer 2006 North River Resources listed on UK stock market 2009 Acquired Namibian assets from Kalahari Minerals 2010 Site Clean up, metallurgical test work commenced 2011 Mine dewatering and underground drilling commenced from 6 level; Scoping Study commenced 2012 Full underground void survey; Maiden JORC resource 2013 Feasibility Study commenced, Additional underground drilling; Increase in JORC Resources 2014 April: Mining License application lodged with MME June: Environmental Clearance received from MET July: Cornerstone Investment by Greenstone Sept: Increase in JORC Resources Nov: Publication of Feasibility Study

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| Case Study Company Overview North River Resources has a vision to become an established miner in Namibia. To achieve this, the Company plans to reinvest free cash flow derived from future production at its Namib Project into the development and/or acquisition of new projects in-country. To begin this journey, North River is currently focused towards building the Namib Project.

Key Facts

• Listed on London’s AIM market • CEO: James Beams, leading a Board of experienced mining personnel • X-strong in-country team with recruitment ongoing • Support from strategic cornerstone investors – Greenstone and Taurus • Strong focus on health and safety

Significant Shareholders

Greenstone Resources LP -‐ 29.99%

Taurus Minerals Ltd -‐ 12.13%

TD Direct InvesCng -‐ 4.63%

Barclayshare Wealth Management -‐ 3.74%

MarCn French -‐ 3.73%

Imperial Minerals Ltd -‐ 3.2%

Other -‐ 42.58%

JORC Resource Fresh Ore (tonnes and grade at 1% Pb+Zn cut-off grade) Classification

Area

Tonnes*

Pb %

Zn %

Ag (g/t)

Indicated

Underground

877,000

2.7

6.0

44.4

Inferred

Underground

372,000

1.9

7.5

42.1

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JORC Resource Base of 1.25 million tonnes

Case Study |

Broader Vision • Ambition:

• Become an established mining company in Namibia • Production of base metals from multiple streams within 3-5 years

• In order to deliver this: • Build management capability

• Maintain strong board of directors • Build culture of Corporate Social Responsibility • Establish a strong operating track record within Namibia and with investors • Build Namib as the first project: on time and on budget • Reinvest free cash flow into development/acquisition of new projects • Maintain strategic cornerstone investors (e.g. Greenstone and Taurus)

Environmental Journey Deblin Mine abandoned in 1992 following closure of underground operations. Tailing Retreatment in 1997 – site abandoned. Environmental cleanup commenced 2009 EIA & EMP submitted to Ministry of Environment and Tourism Environmental Clearance Approved 24th July 2014

Resource Base of 1.25Mt

110m

MINERAL AND ENERGY GUIDE NAMIBIA

210m

310m

Indicated Resources Inferred Resources

110

410m

| Case Study

Proposed Project • Annual throughput of 250,000 tonnes at an average grade of 9% (Pb+Zn) • Underground mine access via twin declines in the North and South of the defined resource • Plans to implement traditional underground mining methods, utilising truck and loader haulage • Importantly, minimal site preparation is required and favourable geo-technical conditions for plant construction exist • Process route is based on simple bulk crushing, milling followed by lead then zinc flotation • Lead recovery of 91.1% with a concentrate grade of 62.2% and a zinc recovery of 89.2% with a grade of 52.5% achieved during locked cycle test work • Tail from the flotation circuit will report to a thickener for water recovery prior to being pumped to the already established tailings dam

Namib Process Plant Flowsheet

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Case Study | Activities Undertaken Since January 2015 – Focused on Project Development Safety iniCaCves being conducted Mine development plan reviewed in detail and idenCﬁed as criCcal path

Board boosted technically by appointment of Keith Marshall and Ken Sangster as NED’s

Further metallurgical test work completed to beBer understand mineralogy and opCmal process ﬂow sheet

Project team strengthened and underground development brought in-‐house

New MD and Project Director appointed

Next Steps Ahead of a Construction Decision Ini$al Front End Engineering & Design (FEED)

Early development of the Namib Project North decline

MINERAL AND ENERGY GUIDE NAMIBIA

Sourcing of plant equipment On-‐going underground development programme to establish access for the next phase of resource expansion drilling Recruitment of technical and opera$onal staff at the Namib Project Capital es$mate to be updated following engineering on final process flow sheet – scope for improvement vs Feasibility Study Safety and management systems being implemented

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| Case Study Preparing for Project Development • New Managing Director and Project Director appointed • Board boosted technically by appointment of Keith Marshall and Ken Sangster as NED’s • Further metallurgical test work completed to better understand mineralogy and optimal process flow sheet • Mine development plan reviewed in detail and identified as critical path • Project team strengthened and underground development brought in-house • Safety: • 12,000 man hours with no LTI’s since Feb 2015 • All staff trained in First Aid and Fire Fighting • Pre-employment medicals initiated • Policies and procedures

Current Activities and Next Steps • Early underground development programme underway for resource expansion • Mine and processing technical reviews being finalised: all positive • Capital estimate to be updated following engineering on final process flow sheet. Scope for improvement vs Feasibility Study • Safety, Management Systems being implemented • Power supply trade-off study completed and in review process • EPC contractor shortlisted • Value Engineering / Optimisation with owner and EPC Contractor • Ongoing site establishment • HR recruitment planning & training systems/processes underway

Critical Infrastructure

Water pipeline within 8km

Power supply via national grid supplemented by generators

Project capital development cost benefits from existing infrastructure

Water sourced from desalination plant, supplied by Namwater

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Existing power line spur to site connected to National Grid

Case Study | Investing in Namibia • Capital investment of US$28m over initial life of mine • Re-investment of cash flows in extending life of the operation and identifying 2nd project • Owner operated - Ramping up to 300 full time employees • Local supply contracts being established for all site operating consumables and services • US$20m to be paid in corporation tax and royalties over initial 3.5 year mine life. Plus export levy as applicable • Ongoing employee training and development

Google Earth 22°31’3.80” S 14°45’46.54” E North River Resources plc 1A, Princes House 38 Jermyn Street London SW1Y 6DN

MINERAL AND ENERGY GUIDE NAMIBIA

Managing Director: James Beams James@northriverresources.com

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| Case Study

Whether this plugs in to coal, solar or gas, we can finance the source of the power. At the Development Bank of Namibia, we appreciate the fact that sustainable electricity is a prerequisite for sustainable development.

Our portfolio of projects spans regional electricity distributors (REDs), cross border distribution lines, independent power producers and electrification infrastructure for local authorities.

Our doors are open to power producers and distributors. Call 061 - 290 8032.

If your vision electrifies us we have the power to switch on the finance.

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Good business is good for development.

Chapter 5 | Safety

MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 5 Safety

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Chapter 5 | Safety

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Chapter 5 | Safety

Advanced Solidifies Fire Suppression position in Namibia Established in 200- through its South African holding company ADVANCED Fire Suppression Technologies; ADVANCED Fire Suppression Namibia (AFSN) has grown to be able to provide a onestop-shop-service for all customers’ fire detection, prevention and protection needs, while boasting of the most advanced firefighting products in the world, With a huge concentration on the mining industry in Namibia, AFSN has secured mega deals with Rossing Uranium Ltd as well as Navachab Gold Mine, among its client database. ADVANCED Fire Suppression Namibia is a member of the ADVANCED GROUP of COMPANIES; the group consists of seven other subsidiaries namely;

• • • • • • •

ADVANCED Fire Suppression Technologies, ADVANCED Fire Suppression Systems, ADVANCED Fire Suppression Botswana, ADVANCED Fire Fixed Systems, BAFOKENG Hydraulics and Mining Solutions, Enviromission, KENRU Fire Protection.

Says Chief Executive Officer, Barry Sissing, “Our main focus in the mining sector is on vehicle and fixed systems. Our strengths lie in technical expertise and capability, committed staff and industry knowledge which in turn enable us to select the best possible products and systems for various industries.”

MINERAL AND ENERGY GUIDE NAMIBIA

Some of AFSN clients are illustrated below.

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Chapter 5 | Safety ADVANCED Fire Suppression Namibia is currently the only distributors of ANSUL and WORMALD Vehicle Fire Suppression Systems in Namibia. Equipment loss, downtime, increased insurance rates and personal injury are often the results of fires involving vehicles. Suppressing vehicle fires are exactly what the ANSUL and WORMALD systems were designed for.

Re-setting a released suppression system is often simpler, easier, faster and much cheaper compared with powder or foam suppression systems. Normally our service organization guarantee a complete reset within 24 hours. Advanced suppression system is normally installed in less than one working day. “The installation is carried our by its own travelling service technician or by one of our many certified installers that are available all over the world. Once a year the fire suppression system should be inspected and the functions tested by a certified installer. Normally, this does not take more than an hour. Every five years the suppression system should undergo a revision where the suppression fluids also are exchanged,” says ASFN. The total life span cost of Advanced suppression systems is low compared with competing systems. Our system is very reliable and adapted for demanding environments. A large service network guarantees fast actions.

According to Sissing, with its Detection and Automatic Actuation Systems, all fire systems are capable of 24-hour fire detection. Vehicle fire systems are commonly used by all major mining houses and various other sectors. “With internationally trained installers and service technicians, we offer a 24-hour service throughout the year including all holiday periods with our technicians on standby 24/7. A fire in a mine can have terrible consequences in the form of human lives or longer production reductions with economic losses. In the compact and hot engine compartment of a mine machine the course of fire can be very fast with massive smoke development in the whole mine complex. With its hydro pneumatic fire detection the suppression system works with the same effect even when the electricity supply is disconnected. The system is also position independent (if the mine machine is laying on the side or up-side-down).

Trading Name

: ADVANCED Fire Suppression Namibia

Registration No.

: 2008/0075

Postal Address

: P.O. Box 8380

Swakopmund Namibia Contact Details

: [T] +264 (0)64 400 883 / [F] +264 (0)88 622 504

CEO:

Barry Sissing

+264 (0)81 442 8747

Barry@advancedfsn.com

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Registered Name : ADVANCED Fire Suppression Namibia (Pty) Ltd.

Chapter 5 | Safety

International SOS: A one stop shop solution to the mining industry

In business since 1985, International SOS has developed specialised capabilities in providing remote medical services in very challenging environments, specifically for the mining industry.

International SOS in Namibia

International SOS operates in excess of 300 sites throughout Eastern Europe, the Middle East and Africa, from harsh desert environments, to offshore installations and to deep African jungle.

The mining sector in Namibia is vibrant and attracts many investors from around the world. International SOS has been a core part of that growth; assisting organisations in building appropriate medical and travel safety solutions based on project parameters.

Approach and Standards

The organisation has serviced both Namibian and foreign companies within the energy, mining and infrastructure sectors in Namibia for more than 15 years. During their time in Namibia, International SOS has made supporting the local economy and residents as a priority. They integrate local medical teams for cross-cultural and medical excellence and growth. International SOS actively recruits Namibians and provides educational opportunities to further drive the remote medical services and sustainability at mining sites by offering accredited courses and engaging with the Namibian mining community. International SOS supports several remote mining sites with managing the health risks to workers at Namibian mines, and provides their clients with clinics and staff to provide medical attention in the event of an incident or accident. Dirk van Doorn, General Manager, Sales & Marketing | East Europe, Middle East and Africa, of International SOS, explains: MINERAL AND ENERGY GUIDE NAMIBIA

Solutions Built for Unique Needs of Mining Companies

“As a medical services company, our goal is to be able to respond appropriately to medical emergencies in line with international standards of emergency medical care. As a business partner, our value is to help organisations reduce costs, recordable injuries, and time spent offsite through a preventive approach to health management.”

International SOS strives to be proactive in ensuring that health standards are met as set out by the client or by the government in the country where the client is operating. In most cases International SOS will exceed these standards through the application of the latest cutting edge remote medical processes and ideas. In fact, the highest quality possible in medical service delivery is demonstrated by the global ISO 9001:2008 certification across all its healthcare and travel safety services. Dirk van Doorn continues: “We find that mining organisations are not just looking for a health care provider, but a trusted advisor that can import the best practices from around the world, especially in designing and operating major medical projects for mining houses. This helps our Namibian mining clients stay at the forefront of remote medical solutions.” International SOS is fairly unique in the provision of medical services to the mining industry, as they offer a one-stop-shop solution. This means they like to be engaged from the beginning – from the site health assessment at the start of a project right through the specific needs of medical provisions during the construction phase; culminating in the on-going provision of medical care, clinic management, and education programmes at the mining location. Mining companies work with medical service providers like International SOS to provide for the medical well-being of their workers. Mining companies generally invest in the following services, depending on the site its stage of development: • Remote clinic design and medical staffing provision • Medical Evacuation Response Plans

The local office is based in Windhoek and is supported 24/7 by their regional Assistance Centre located in Johannesburg, South Africa.

• Assistance Services to medically and logistically support cases that must be managed off-site

The business in the Republic of Namibia continues to grow in the mining sector, as well as the Oil and Gas and Infrastructure sectors (including the support of construction and manufacturing companies).

• Drugs, disposables and medical equipment supply services to ensure compliance and support the scope and quality of the on-site medical services

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Chapter 5 | Safety By the Numbers: • Telemedical Interface • Medical assistance for evacuation support, medical advice, peer review and case management • Occupational health services from pre-employment medicals and fitness-to-work, to on-going wellness and support

30 Years in Business In 2015 International SOS celebrated its 30th anniversary. When asked to discuss some of their major milestones, they spoke of their expansion in Southern African countries such as Botswana, Zambia,Mozambique and DRC. They also spoke of the work they do around malaria education and malaria control programmes. In addition to malaria programmes they run for EMI clients in malaria areas, they are particularly proud of the efforts of their staff, who often donate their time, expertise, and supplies to raise awareness and reduce the risk of infection in local communities. Dirk added: “It has been an amazing journey and we have learning greatly from our time in Namibia. We look forward to continuing to invest in our most important asset, our people, as well as develop our Global Assistance Network and our providers in Namibia.”

Client testimony The MTN Group, an International SOS client since 2010, is a leading mobile telecommunications operator in emerging markets, connecting 219.2 million people across Africa and the Middle East. Zain Reddiar, Head: International HR Operations at MTN Group Head Office in South Africa: “As our business expanded across 22 countries we found a real need for International SOS’ services. If we did not have this relationship we would feel far more vulnerable.

The ongoing Ebola outbreak is a case in point. The moment we realised this could be a concern for our people and our operations, we talked to International SOS. The response was immediate – something we needed and came to expect. The information and advice provided enabled us to respond appropriately to media enquiries, to governments, to our staff and their families, and to local communities. You can never put a value on a person’s health and safety - their wellbeing is the number one priority. We know the welfare of an employee assigned to a foreign country takes precedent over any cost concerns, but we do believe the real value we get back as a result of our relationship could easily be ten times or more what we actually pay in membership.”

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A recent study revealed the benefits of implementing pre-travel health checks and malaria prevention measures for business travellers and international assignees. Return on Prevention, published by Prevent and commissioned by the International SOS Foundation, analyses the average monetary investment required to relocate an employee for an international assignment and the costs that incur when an assignment fails due to an employee’s inability to fulfil the assignment due to poor health. The study shows how the benefits of implementing a travel health prevention strategy significantly outweigh the operating costs of the programme. 1. A medical check for travellers and international assignees aimed at identifying pre-existing medical issues before assigning employees to a foreign country. This ensures employees are fit for the proposed assignment and its working conditions. It identifies general and work- related health problems before the assignment begins: • The cost-benefit analysis showed that $1 invested returns a benefit ranging from $1.6 (minimum scenario) to $2.53 (maximum scenario). 2. A malaria prevention programme aimed at employees travelling and working in malaria-risk regions. Employees are given information before departure and receive prophylaxis medication and other technical protection means such as mosquito-nets, insecticide sprays and repellents as well as a malaria curative kit: • The malaria prevention programme reduced the occurrence of fatal cases by 70%. The benefits also outweigh the costs in the case of this programme: For each $1 invested, the return was estimated at $1.32. International SOS has released many reports on why an organisation has a duty of care – a moral, and at times legal, responsibility – to protect their people working overseas or on assignment. The Prevent study proves there are tangible commercial incentives to investing in preventive programmes, in addition to fulfilling an organisations duty of care. Implementing quality, appropriate pre-travel health and malaria programmes can save lives and cut costs. For More Information For more information on our capabilities in Namibia, please contact Robert.Makunike@internationalsos.com t +264 (0) 61 289 0906 / m +264 (0) 81 129 3137 For a free copy of the Prevent report on how malaria programmes and pre-travel health checks can help organisations significantly reduce costs and protect their workers, visit www.internationalsos.com/ return-on-prevention For more information about how International SOS supports energy, mining and infrastructure, clients, visit www.internationalsos.com/ sectors/.

MINERAL AND ENERGY GUIDE NAMIBIA

We can’t leave anything to chance and wait for something to go wrong: Education, prevention and preparation have always been really important for us. Our work with International SOS is one proof point that shows our people that we are an organisation that cares and takes their wellbeing seriously.

Pre-Travel Health Checks & Malaria Prevention Programmes Benefit Businesses & Workers

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Chapter 6 | Finance &Tax

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Chapter 6 | Finance &Tax

Chapter 6 Finance &Tax

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Chapter 6 | Finance &Tax

Namibia and Taxation: A Deloitte perspective A conversation with Deloitte Tax Director Gerda Brand

How do you describe Namibia’s tax and investment matters in the mining sector? Namibia has a wealth of natural resources and a number of investors have been active in the country for some time, with new investors looking to invest on a regular basis. Namibia, in our view, therefore has a huge opportunity to attract local and foreign investors. Having said that, it is not always easy for investors to make the decision to invest in Namibia for a number of reasons – the relative uncertainty in the tax regime, difficulty in obtaining information on the Namibian tax regime unless an investor consults with a professional advisor, time to set up operations from a legal and tax point of view, to name a few.

MINERAL AND ENERGY GUIDE NAMIBIA

What is your understanding of Namibia’s tax regime? And what is Deloitte’s position in that regard? From a corporate tax point of view Namibia has a source basis of taxation. This means that any income that is earned from a Namibian source is subject to tax here. As is normal with a source basis of taxation, there are also a number of deemed source provisions in our tax legislation. This means that in certain defined circumstances income earned from non-Namibian sources could be pulled back into the Namibian tax net because the person earning the income is a Namibian resident individual or Namibian registered company. The other aspect of the Namibian tax regime is that it generally does not tax gains made on capital account. We believe our tax system is an appropriate system for Namibia at this point in time, but that the provisions of Income Tax Act could be better administered and applied by the Revenue Authorities. We however believe that the current reforms taking place at Inland Revenue and the envisaged Tax Agency will improve the tax administration in future. From an indirect tax point of view (e.g. Value-added Tax), Namibia is following the norm applied in many countries with a value-added tax system.

What are the key issues facing/affecting the taxation systems where the mining sector is involved? Currently, key issues for the mining sector include the timeous receipt of Value-added Tax refunds, the withholding tax on services, tax on the proceeds of mineral rights/ shares, the proposed introduction of export levies, to name the obvious ones. All of these currently impact or will impact the Namibian mining industry directly. Delays in VAT refunds are affecting mining companies from a cash flow perspective as companies often have to wait until VAT verification audits are conducted by the Revenue Authorities before a refund is received. A number of mining companies in Namibia inevitably have to make use of consultants and other professionals to provide certain technical and consultative services – these are all subject to 25% withholding tax, unless tax treaty relief applies. Even repairs to machinery that cannot be performed in Namibia would attract withholding tax. Since the introduction of the withholding tax, we found that most suppliers contract to receive a net fee, meaning that the Namibian mining company effectively has to pay the withholding tax on the supplier’s behalf and that results in increased costs to the Namibian company. Looking at the introduction of tax on the sale of mineral rights or shares in companies holdings such rights, one does understand Government’s philosophy behind it. However, in a time where many investors (especially start-up investors) need to find co-investors / farm-in partners to make an investment viable, the introduction of this provision came at the worst possible time. Also, what is fairly

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Chapter 6 | Finance &Tax unique with the Namibian provision is that these types of transactions are taxed on proceeds as opposed to profits. Thus, any costs that an investor already incurred with the investment is not taken into account when calculating the tax payable on the transaction. There are a number of concerns with the proposed export levy, the more obvious ones being the practical implementation thereof and the pressure on prices and/ or profits that this levy would have.

What is the role of tax in investment decisions? The tax regime of a country has a significant impact on investment decisions, but the regime should be such that tax is only one of factors in making the ultimate investment decisions. Corporate tax always has a direct impact on the return on investment, while value-added tax for example could impact the cash flow of the business – it is therefore important that investors consider tax in their decision making process. All in all it is very important for investors to know that they are investing in a country where the tax system is stable, that proposed changes will be made public in advance and that stakeholders have an opportunity to debate/ discuss proposed changes or at least provide input as to how changes could impact on its contribution to the country’s economy. Uncertainty or volatility in the tax practices of a country makes investors nervous as they are mainly looking for long term consistency and certainty.

What criteria does Deloitte apply in evaluating a tax system? A tax system should be a policy tool for economic management and the prime source of revenue for a country. A good tax system will allow all kinds of economic investment and will not penalize certain investments; it will encourage business to consider tax issues equally with other investment criteria and not put tax issues ahead of such other criteria. And then a good tax system should be simplistic, certain and efficiently managed.

What are the most common themes and myths regarding the current tax system? The most common theme experienced currently is the lack of timeous processing of submissions and payments made to the Revenue Authorities. Unfortunately, this is not only a perception and we deal with many cases where submissions and returns have not been processed and or assessed within a reasonable time. We are, however, positive that the system will improve drastically once the new IT system has been implemented. This system will also allow for e-filing, which would be a huge step for the Ministry to become more effective in administering our tax system. We also believe it will free up resources that are currently performing pure administrative duties to start considering the provisions of the various pieces of tax related legislation in more detail and performing audits and investigations. The other theme that we seeing very often is the differences between import submissions made by taxpayers and the customs system (the Asycuda system). In most instances the reconciling differences dates back a number of years and often results in huge additional demands. Such assessments then take many months to resolve as the assessments often stem from timing differences between the taxpayer’s declaration and the reporting on the Asycuda system.

What is Deloitte’s advice the mining industry? Our advice, on a policy level, is to ensure that the mining industry keeps abreast of changes and potential changes by keeping contact with the relevant mining association(s) and tax advisors. On an administrative level, our advice is to obtain statements of account from Inland Revenue on a regular basis – so that action can be taken where returns/ submissions have not been processed within a reasonable time.

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Chapter 5 | Safety

Standard Bank Namibia beckons mining investors Head of corporate and investment banking, Amit Mohan

…Bank has financial muscle to finance largescale mining ventures

MINERAL AND ENERGY GUIDE NAMIBIA

tandard Bank Namibia has a rich pedigree in the mining industry. As a Bank well versed in serving the mining sector in Africa, Standard Bank Namibia has been framing its products to ensure that the country has more bankable projects that can take the country to new economic heights. The Bank has been ready to finance large-scale mining projects understanding that the projects require big chunks of financing. One recent key highlight has been the co-financing of Debmarine Namibia’s latest sampling and exploration vessel (approximately N$1.8 billion). “Like many large investment banks, we work with government, corporates and financial clients in multiple sectors and geographies. Unlike most, we are first and foremost Namibian; we have a long, proud history that gives us a unique depth of expertise and breadth of footprint. We are set apart by our scale, by the strength of our regional and international connections, and by our ability to innovate. Our track record shows our success in building businesses across Namibia, especially in the natural resources, mining and power and infrastructure sectors,” thus Standard Bank Namibia’s Head of Corporate and Investment Banking Amit Mohan.

While this year may be a challenging one for the global mining industry, mining prospects remain, Standard Bank Namibia’s strength and passion is for Africa as a region. And so when clients speak with Standard Bank Namibia, they are actually having a conversation with an entire regional backbone. We are always ready to finance business ventures with an established business plan and viable outlook. Exploration projects however have a very unique business structure in that income streams tend to be highly speculative and dependent on what’s in the ground and the interested extraction counterparty. For this reason, most exploration projects are funded by owner equity or by sizeable minerals extraction firms. Mining is a risky business which is influenced by several factors including uncertainties in commodity prices on the world markets. However in terms of the outlook, commodity prices are not anticipated to exhibit material improvement, impacting on sector valuations and the ability to raise financing. But Standard Bank Group research shows that African mining remains underexplored. In 2013, African exploration accounted for 17% of the worldwide exploration budget

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Chapter 5 | Safety

Debmarine Namibia’s latest sampling and exploration vessel (approximately N$1.8 billion) financed by Standard Bank Namibia despite the fact that the continent holds more than 30% of the world’s mineral resources. So amid a more sober outlook, the prospects for mining in Africa remain essentially intact over the medium term. And although cautious, our appetite for mining projects, is quite strong. What financing products is Standard Bank offering to medium and large scale exploration and mining firms?

Our comprehensive suite of financing and advisory solutions for the mining and metals sector include: Project finance Corporate finance advisory solutions Working capital facilities

We offer solutions in Advisory, Capital Markets, Debt and Transactional Services. All these capabilities bring together complementary skills from corporate finance and balance sheet banking to geology and mining engineering. And with our global footprint, our transactional banking network is able to provide our clients with a more seamless solution for their day-to-day operations.

Bridging finance

How do you convince a local miner to access project financing from your Bank other than foreign financial institutions understanding that it is always cheaper to borrow from Banks in foreign countries where interest rates are relatively lower?

Commodity price risk management solutions

This question symbolizes our strength as a regional bank. We are able to finance miners on both local and foreign exchange expenditure needs within our integrated Group structure.

In the meantime we continue to participate in dialogues that promote sustainable growth and business in the mining sector. Standard Bank Namibia is confident that the mining sector promises positive growth opportunities for the country, despite a downturn in the global mining industry.

Because of our history as a mining bank and our enduring expertise in this sector, we work to understand our client’s individual requirements. We coordinate and execute our clients’ financing and banking requirements across Africa and emerging global markets. Our highly regarded commodity and currency trading desks offer 24-hour trading capabilities to support price-risk management and hedging strategies. In addition, we carry out in-depth analyses of commodity trends and stay on top of the latest developments in the mining and metals industry. We continue to play a leading role in arranging facilities for many of the most significant mining projects in Africa and other key emerging markets.

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Inventory financing Structured trade and commodity finance Foreign exchange and interest rate hedging Global transactional banking services

Mining prospects however look bright for Namibia as the country is currently the world’s fourth largest producer of uranium and is expected to overtake Niger and Australia by 2017 through the commencement of the Husab mine production. As Standard Bank, our eminence talks to financing power and infrastructure, mining and metals, oil and gas and other key sectors such as fast moving consumable goods, real estate and telecommunications. As the world looks to emerging markets to power growth, Namibia is taking its rightful place at the heart of this.

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How will Standard Bank contribute to the growth of the mining sector in Namibia?

Acquisition finance

Chapter 2 | Mining We specialise in resources, infrastructure, energy and large real estate and have leading expertise in these areas. We also bank and finance many of the key players in the retail, financial and business services, manufacturing, services, fisheries, tourism and agriculture sectors. We focus on the top- FDI and indigenous corporates, including the commercial SOE’s and provide banking-, funding-, and advisory services to many of Namibia’s leading entities. We also provide these services to key ministries and national/governmental agencies in raising Capital Markets debt. Mining is certainly one of our key focus areas and we employ three mining professionals including a mining engineer and a geologist/ mineral economist. We also have a dedicated coverage/ relationship management team for resources as well as a specialised credit approach. This enables us to track all exploration, mining and valueaddition projects in the resources sector and take calculated risk in a sector which is known to be risky.

RMB: Redefining role in mining RMB has been involved with most of Namibia’s major mining and resources projects over the past few years. We are proud to have been an integral part of the development of the N$ 4bn Otjikoto Gold mine opened by the President on 1 June, as well as being an MLA and funder to the SS Nujoma, the Debmarine exploration vessel currently being built as well as their recently commissioned mining vessel, the Mafuta. Together these two vessels capital cost exceeds N$ 3bn. RMB team members have also been close to the development of Husab uranium, Namibia’s largest mining project..

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We are also integrally involved in the advising, banking, arranging and financing of the N2,5bn Ohorongo Cement plant and are bankers, advisors and/or lenders to a number of Namibia’s premier exploration and mining companies. Some of the current RMB team were involved with the Otjikoto project since the initial discovery of the deposit more than 10 years ago. We followed the project through ownership by four successive companies, advising each in turn and facilitating and arranging funding for Evi Mining, the BEE shareholders. After the acquisition of Otjikoto by B2Gold RMB Namibia stepped up and were selected as part of the funding consortium to the company and also provided full banking and hedging services to the Namibian subsidiary. RMB Namibia, through the FNB Holdings Foundation, has also partnered with the B2Gold Foundation in a number of Corporate Social Responsibility projects. Lessons learnt include getting involved early, picking winners and forming lasting value-added partnerships with corporates with whom we share values and long-term objectives which support national visions and goals.

Specialised multi-disciplinarian We have a multi-disciplinary team of financial and technical experts who are able to assess projects early in their lives and to take a firm view on winning- projects, companies- and management teams. We look for long-term relationships, avoiding speculative and opportunistic players, even at the cost of short-term gains.

While we do engage in early advisory activities and are happy to bank credible companies from an early stage, we only consider funding of advanced projects which have reached a resources or reserves stage of development. We are always happy to chat to all-comers and can sometimes guide small companies in the right direction or matchmake them with technology or early-funding partners.

Challenges There are many challenges. From making sense of the early stage EPLs where not much work has been done, to finding early equity or partners to move projects to the next stage, to banking the large and mega-projects which have foreign sponsors. On the large projects, there is generally an assumption that Namibian banks cannot play a meaningful role- this assumption has been proved wrong in the cases of Langer Heinrich, Ojikoto Gold, Ohorongo Cement and the various DebMarine vessels where Namibian banks have indeed been significant funders.

‘Growth at home’ strategy? Namibian mines have done a lot to encourage ‘Growth at Home’ in procurement, management, training and skills development, enterprise development and in ownership. The Chamber of Mines has played a strong catalytic and coordinating role in its members adopting a Mining Charter which advances all these elements. Epangelo Mining has also begun to play a role in becoming a local shareholder representing government’s interests in mining projects and is becoming more capable in pursuing its primary role in advancing exploration of strategic minerals’ EPLs. The Chamber is also working actively with Government on the value-addition opportunities in the mining sector. What is still largely missing is the local private equity or venture capital for Namibian projects. The Namibian Stock Exchange has not yet been able to raise significant capital for mining projects and a few foreign private equity firms have recently invested in Navachab and Tschudi mines but most of the capital for mining has come from foreign stock exchanges or direct FDI investors. These sources of funding are critical to the future development of mining and should be actively fostered. Namibia’s recent top-ranking in Africa by the Fraser Institute will continue to encourage FDI investors to choose Namibia above competing destinations. Namibian miners, investors and funders should continue to partner these foreign institutions and policies should be developed to encourage such partnerships.

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Chapter 5 | Safety

DBN: Development coming of age The structure of projects listed on the balance sheet was responding to the Bank’s focus on larger entities within the manufacturing, transport and logistics, and tourism sectors, as well as infrastructure. The DBN’s first branch outside Windhoek, the capital was in Walvis Bay, in the Erongo region, as an important part of the refocusing, considering enterprise and infrastructure are stimulated around the port and the mining sector, opportunities emerge for enterprise in other regions. The Bank’s finance for Omburu Sun Energy, the solar energy generator that will contribute to the pressing need for greater energy independence, is particularly valuable as it opens the door for finance of private sector energy generation. The scope and range of projects received for consideration show that an innovative mind-set is thriving, and that there are significant opportunities for the financial sector to consider, as Chief Exectuve Officer Martin Inkumbi (MI) discusses below.

Could you highlight the role that the Development Bank of Namibia (DBN) plays in the development of the Namibian economy as well as your key objectives as CEO?

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Martin Inkumbi (MI): The role of the Development Bank of Namibia (DBN) is to finance economic development in Namibia, primarily by extending financial credit or loans as well as business support services to enterprises doing business in Namibia. The bank provides financing for a broad range of economic activities, including infrastructure projects, large corporate enterprises, and even small and mediumsized enterprises. DBN has a local mandate and primarily finances businesses incorporated in Namibia. We also finance cross-border transactions, export and import-related activities, and infrastructure related projects that link countries within the Southern Africa region. Infrastructure is a key focus area for DBN. In addition, the DBN’s lending focus is aligned with the government’s development plans. The bank aims to help the country move towards the achievement of its 2030 development plan, which will unlock Namibia’s potential in agriculture, manufacturing, transport and logistics, tourism and business services. The DBN does not directly finance the agriculture sector, as government has established a special finance institution for this purpose, the Agricultural Bank of Namibia, but we have a presence in all others.

Martin Inkumbi - CEO The Development Bank of Namibia (DBN) has over the years benefited from strategies developed in previous years, and the implementation of strategies in 2014 has shaped the Bank’s future. The Bank’s assets have recently passed the N$ 2 billion mark, representing a growing resource for development finance.

Could you highlight the main product and service offerings that you provide for the mining sector? MI: The DBN does not provide an exclusive service for the mining industry but supports mining activities through the financing of the participation of Namibians in mining projects. The bank does not get involved at the exploration phase but can certainly finance the mining activities. We are particularly keen to support local service providers for the mining industry.

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Chapter 5 | Safety How accurate is the international investor’s perception of the mining and constructing sectors in Namibia and which elements of the country would you like to highlight to them? MI: When it comes to mining, Namibia is known for its uranium, diamond, gold and copper resources, but it is also increasingly becoming a key transport and logistics hub for the region. Namibia has a seaport and is well connected to its neighboring countries in the region. This presents an excellent investment opportunity for those looking at transport and logistics opportunities to service the southern Africa region. The challenge has always been the small population, which does not present a strong enough market for investors and producers. The population of Namibia is only about 2 million, but it is positioned as a gateway to the region’s market, which has over 300 million people.

What are the DBN’s lending capabilities in the country?

The DBN takes equity on certain projects. What does the DBN look for in a project to take this decision and up until what point does the bank become involved in a project? MI: The DBN only considers equity in economic projects that it considers to be of strategic economic importance to Namibia. The aim is not to become a majority shareholder in a project, as the bank would not want take over the management of the business. The bank prefers instead to remain a minority shareholder, taking a 25% to 30% stake. To date, DBN’s major equity investment is in Ohorongo Cement, for example, because it is the only cement producer using local resources to supply to the construction industry. The bank has also supported a local group, Evi Gold, in taking up shareholding in a mining project until the parties did an internal re-financing. DBN support assisted this Namibian investor acquire shares in Otjikoto mine, in the early stages, before mining activities began.

MI: DBN is relatively a small bank and can at this stage only lend up to N$ 300 million to a single group. However, the Bank leverage on partnerships with other development finance institutions, to finance infrastructure, industries and energy projects. There is capacity to finance multi-million Namibian dollar projects within the region.

Do you have a final message for our international community? MI: There are opportunities almost in every sector of this young economy. DBN will support international investors coming to Namibia. It can finance joint ventures between Namibian entrepreneurs and international investors setting up business operations in our economy.

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Chapter 6 | Finance &Tax

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Chapter 6 | Finance &Tax

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Chapter 6 | Finance &Tax

TAXATION AND INVESTMENT ISSUES IN MINING

PAUL MITCHELL Between 1985 and 2005 over 100 hundred countries introduced new mining laws, most involving reforms to their fiscal systems, including taxation. These reforms were motivated by a desire to encourage greater mining investment and concerns about the public–private shares of mining revenues. It is clear that tax revenues derived from mining activities represent an important public policy issue. This chapter outlines key policy issues as they relate to the mining sector: the role of tax in companies’ investment decisions; the optimum level of tax and effective tax administration; observations about a “good” taxation system; and conclusions about the role of tax regimes in development generally.

The role of tax in investment decisions Mining is a cyclical industry, and investment in exploration and mine development follows these cycles. All regions of the world are affected by this cyclicity, and, as mentioned in the previous chapter, companies usually compare numerous development options internationally, and screen these options to obtain

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the best balance between risk and reward. The key factor determining investment decisions is the geological potential of a site, but it is strongly offset by fiscal and socio-political considerations, with the former including tax rates and the latter the stability of the tax system. Table 1 below details the most important criteria which companies consider in making investment decisions, and it can be seen that more than a third relate to taxation.

Designing mining tax systems The ultimate goal of any government’s mining tax system is to ensure the greatest possible benefit for the public while simultaneously encouraging investment in the sector. Achieving this

requires realistic consideration and careful balancing of the objectives of the two key players: companies and governments. For companies, the overall level of tax, including royalties, influences incentives to explore and develop. Higher taxation levels are likely to reduce incentives to invest, and, in marginal cases, even to keep some mines operating. The timing of tax charges also influences investment patterns. Raising tax rates will increase government receipts in the short term, but if an increase is too high it will discourage exploration and development, thus reducing the tax revenues generated by the sector over the longer term. Different types of taxes influence investment behaviour and government administration. For instance, taxes based on units of production irrespective of profitability may create economic inefficiencies by discouraging the exploitation of lower grade ore and shortening the life span of some mines. Conversely, taxes on corporate profits (and to a lesser degree incomes) are more efficient and recognise the inherent risks in mining operations, particularly wide fluctuations in international minerals prices and the difficulties of anticipating all geological, technical, financial and political factors over a mine’s lifetime.

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Chapter 6 | Finance &Tax Table 1. Top ten company decision criteria in mining investments 1. Geological potential for target mineral 2. Profitability of potential operations 3. Security of tenure and permitting 4. Ability to repatriate profits 5. Consistency of minerals policies 6. Realistic foreign exchange controls 7. Stability of exploration terms and conditions 8. Ability to pre-determine environmental obligations 9. Ability to pre-determine tax liability 10. Stability of tax regime

Bold: tax-dependent. Italics: tax-related.

Source: UN survey of 45 companies quoted by Prof. James Otto, 2005, unpublished. Notes: the survey included a total of 62 factors, not necessarily in the numerical order given. Further, profits-based taxes tend to distribute these risks more evenly between companies and the state. While perhaps economically superior, the challenge with profit-based systems is their greater complexity, which may be a genuine constraint in developing countries with limited administrative capacity. Also, more complex profit-based systems have greater potential for corruption and tax fraud – key concerns in the EITI context. When deciding whether or not to invest, companies consider not only the expected rate of return (or profitability) but also the associated risks of a new project. An important risk consideration is the perceived stability of a tax regime over time. perceived stability is also important for governments. This is because of the risk–return trade-off: where companies perceive greater risks, they and their financiers will demand a higher return, thus lowering the returns available to the government when determining the required profitability of a new project. Therefore, tax systems play an important role for the government in terms of influencing the relative attractiveness of a jurisdiction for investors. To summarise: a government’s objective for the minerals sector is to obtain an appropriate share of income and to foster development, while companies want an adequate return on investment. Thus, it is in the interests of both parties to facilitate projects that are successful for their full potential life-spans.

key issues affecting taxation systems A number of factors that are unique to the mining sector need full consideration in the design of mining tax regimes. The primary one is the characteristic minerals and financial cycle that was discussed in Chapter 3. The cycle means that different mines have differing capacities to pay taxes at various points, as is explained below.

• Mine development: this too is a high-cost phase requiring the purchase of substantial capital inputs, most of which need to be imported. Typical responses are to enable accelerated recovery (depreciation) of capital costs once production begins, and to have low import duties and value added taxes (VATs). • Production: minerals production is the longest and most profitable phase in the cycle and is usually when

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• Post-mining: after mining ceases and there is no income, projects often incur significant rehabilitation costs and also in some instances extended liabilities for site management. The typical response is to provide tax deductibility to encourage companies to set aside funds progressively during the production phase. Some have suggested that tax relief for such funds should not apply because rehabilitation is a social responsibility. Some mines are large in scale and have long life spans, and these need specific consideration. Such large, long-life mines may operate through many political regimes and economic cycles, and can involve numerous laws. A common response in these circumstances is to negotiate specific agreements which provide some stability for key items like tax terms. A further consideration is that minerals are a finite resource and are subject to property rights laws – in most countries minerals are owned by the state. To compensate for lost property rights many nations impose royalties, or encourage companies to invest in infrastructure and other public goods. To accommodate variations in the value of different minerals and in the scale of mining operations, tax systems often vary royalties according to mine scale and commodity value. Other factors require consideration. Companies can pay taxes or reduce the tax payable by investing in additional infrastructure and other public goods – how does a tax system balance these trade-offs? Minerals must be processed after extraction – how should a tax system encourage greater domestic processing? It is important to note the above distinctive features of the mining industry and how they affect taxation. There is however an opposite argument which says that tax systems should be uniform across all industry sectors. uniformity encourages economic efficiency where investment attractiveness is not distorted by government incentives, reduces the potential for harmful special-case lobbying by industry, and reduces administrative complexity. All these factors mean that designing good tax systems for the minerals sector is challenging. In practice, perhaps the best systems are those which are essentially uniform across all industry sectors but which recognise some distinctive features of mining and provide some flexibility, such as flexible profit-based royalties. The designing of royalty regimes is not without its challenges however. Systems

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• Exploration: this is a substantial cost phase without any income and is highly risky. Governments typically respond by allowing losses to be carried forward and to be offset against profits in the production phase. This has the secondary benefit of encouraging firms to continue beyond exploration to development.

payments to the government begin to be generated. However, minerals are sold into competitive markets and prices fluctuate, meaning that governments often provide flexibility, such as relief from export duties and VATs, or, in more serious cases, relief from other more substantive taxes.

Chapter 6 | Finance &Tax based on economic theory often incorporate technical considerations (e.g. geology) and sophisticated calculations. In practice, some of the necessary inputs for these models are hard to obtain. This difficulty often leads governments to use royalties systems that are simpler to administer, especially administrations that do not have the technical capacity to manage the complex mechanisms required for optimal royalties calculations. Governments need to understand the effects of their tax systems on investment and respond accordingly. Fortunately, there is a ready measure that they can use, which is based on relative exploration expenditure: all things being equal (including tax), a country should attract exploration investment proportional to its international geological attractiveness rating. If investment is less, it implies other faults in the investment climate, such as excessive tax. However, if investment is greater than geological potential, investment conditions may be overly generous.

Evaluating a tax system Given the sensitivity and importance of minerals taxation as a public policy issue, it is essential that key stakeholders consider it to be fair and reasonable. Inclusive procedures for objective evaluation are needed. Here, the main questions are: • Are payments to society adequate? • Are investors receiving a fair return? • Is the system competitive with those of other nations or provinces? It is essential to address two factors for any evaluations to be legitimate. First, evaluations must incorporate all applicable taxes and fees; one measure of this is the Effective Tax Rate or ETR (Otto, J., 2005, unpublished) – the value of all payments to governments divided by the value of gross or pre-tax profits.

It is instructive to note what has emerged as most common international practice in regard to ETRs. Figure 1 below shows comparative ETRs for a hypothetical copper mine, but uses actual taxes applicable in major mining countries. It can be seen that the majority of countries fall within the range of 40-50% ETR. This implies that tax and company profit would be about equal over the life of a mine. With an ETR of 50% and a typical cost structure for a 20-year medium-sized copper mine, this would imply 17% of gross revenues going to corporate profits and the same figure going to taxes (see Figure 2).

An effective tax system Given the diversity of operations in the mining sector, it is impossible to define an ideal tax system for all jurisdictions. There is, however, a common objective of encouraging successful and sustainable projects that exploit resources fully while avoiding social costs. In this context, four observations can be made about a good tax system. Tax levels and transparency. Governments should try to maximise tax revenues over the longer term by encouraging investment in their jurisdiction and a profitable and technologically advanced industry. To do this they need to institute tax systems that are neutral or progressive to motivate corporate innovation and profit-seeking. Regressive taxes that take increasing shares of profits and discourage investment should be avoided. Given that any set of tax rates and the mix of taxes will be based on assumptions about future prices and costs, and that these will inevitably change over time, there should be a preference for transparency. This

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The second factor is the need to understand as clearly as possible the particular financial circumstances that apply in the mining sector being evaluated, so that its capacity to pay is

realistically known. In theory this can be obtained by building models of all (or typical) mines’ cash flows in the jurisdiction concerned. In practice such an exercise may be impractical, as such models must incorporate assumptions about prices, costs and production volumes, etc., which will change over time. Notwithstanding these challenges, for public policy to be effective and credible, decision-makers must understand the impacts of changing tax rates, adding or deleting a tax, offering incentives, or any combination of these, before policy changes are made.

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Chapter 6 | Finance &Tax can be implemented by establishing multi-stakeholder bodies to conduct regular reviews of key assumptions, so that any policy change is predictable and decisionmaking is consensual. Mix of taxes. previous discussion has shown that the mining industry is often subject to many taxes, frequently levied by different levels of government. This is counter to the objectives of simplicity and uniformity in taxation systems to ease administrative burdens and reduce the risks of corruption, poor policy and fragmented public expenditure. Also, taxes should be responsive to fluctuations in minerals prices. In combination these factors suggest that preference should be given to centralised direct taxes, based on profit or income, while reliance on indirect taxes, such as units of production or

Figure 1. Model copper mine: comparative eﬀective tax rates

Uzbekistan Ivory Coast Mongolia Ghana Guinea Greenland USA (Arizona) Mexico Poland Tanzania Peru Indonesia Kazakstan Philippines South Africa Bolivia Papua New Guinea China Argentina Zimbabwe Chile Western Australia Sweden

value-based taxes, should be minimised.

ideal range? ETR = 40-50%

Distribution of tax revenues. The allocation of revenues between different tiers of government is a long-standing and increasingly important issue. Here, experience to date about development impacts is inconclusive, implying that there is no clear-cut finding for or against fiscal decentralisation. Nevertheless, it seems sensible for companies to cultivate constructive relations with all tiers of government, and to encourage collaboration and capacity-building for all relevant parties in proportion to their influence.

Eﬀective Tax Rate (%)

Figure 2. Division of mine revenues 20 year typical medium sized copper mine Gross revenue: uS$3.3 billion (50% Eﬀective Tax Rate)

Conclusions

loan costs 2% Bank

proﬁts 17%*

Operating costs 44%

New exploration New mines Dividends

Wages Consumables Spares Power Water Community

Taxes and fees 17%*

Capital costs 21% Contractors Suppliers Infrastructure Others

The taxing of mining activities is an important public policy issue that raises questions of fairness about the exploitation of nations’ natural capital. unfortunately, the sector is so diverse that it is not possible to specify an optimum tax system that can be used as a model, although certain universal characteristics of good systems can be defined. Given that any system will be based on a set of assumptions about the future that will change, a fundamental principle is that there is a strong case for transparency and inclusiveness. All stakeholders share a common goal of seeking successful and sustainable projects that foster development. In seeking to achieve this goal, it is essential for all to realise that the tax system is only a part of the challenge: as tax systems increasingly converge, the question of whether mining tax revenues are being properly utilised will become more important than the division of wealth between companies and the state. Paul Mitchell is Director of Mitchell McLennan Pty Ltd, a specialist environment and planning consultancy in Australia and former President of the International Council on Mining and Metals (ICMM) and former Member of the EITI International Board.

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National Provincial local

* Note 50% division

Uniformity across sectors. Many countries have special tax systems for their mining industry, and, as stated previously, this adds complexity, costs and risks. It is feasible and preferable for mining companies to be subject to a country’s general tax system, perhaps incorporating a few special allowances such as a royalty. putting all tax-payers on an equal footing can provide greater certainty, stability and efficiency, and increase incentives for governments to improve tax administration and fiscal policy-making more generally. For industry, one important benefit is the reduction in pressures for coercive taxation once capital investments have been made and thus become immobile.

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Chapter 7 | Petroleum

Chapter 7 Petroleum 138

Chapter 7 | Petroleum

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Chapter 7 | Petroleum

DIRECTORATE OF PETROLEUM AFFAIRS Director: Petroleum Mr. Carlo Mcleod

The mandate of the Directorate of Petroleum Affairs is to ensure that there is adequate supply of petroleum products to the nation, and to minimize the negative impacts of petroleum resource exploitation on the environment and to contribute to the creation of value for society from petroleum activities. The Directorate is headed by an Acting Director-Mr. Carlo Mcleod The Directorate consists of 3 Divisions headed by Deputy Directors •

Petroleum Supply and Distribution(Petroleum Downstream)Mr. Immanuel Nghishoongele

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Petroleum Exploration, Production &(Petroleum Upstream)Mrs. Maggie Shino

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Regulation, Compliance and Economics-Mr. Carlo Mcleod

The downstream sector is governed by the following legislation: Petroleum Products and Energy Act, 1990(Act 13 of 1990) Petroleum Product Regulations, 2000 Petroleum Products and Energy Amend. Act, 2003(Act 16 of 2003)

ORGANISATIONAL STRUCTURE OF THE DIRECTORATE OF PETROLEUM AFFAIRS

Licensing system in the Downstream sector •

The Petroleum Product Regulations of 2000 were instituted to place the regulatory framework in the hands of government rather than to leave it in the hands of the oil companies.

•

These regulations control mainly the operational issues around Health, Safety and Environment (HSE), as well as fuel specifications.

1. Petroleum Supply and Distribution Division

(Petroleum Downstream) •

The Petroleum Supply and Distribution (Petroleum downstream) deals with the wholesaling and retailing part of the importation of petroleum products.)

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The country is supplied through the private market which has established commercial storage facilities all over the country.

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•

2. The Petroleum Exploration, Production Promotion Division (Petroleum Upstream)

Petroleum products account for more than 70% of energy being used in the Namibian economy due to low population density and long transport routes. The Petroleum Supply and Distribution division is comprised of two sub-divisions:

1.1. The Petroleum supply and logistics sub-division Deals mainly with administrative issues of the directorate, managing of fleet and ensuring that resources such as furniture’s, computers and stationery are evenly distributed. They also compile the yearly budget and report on financial utilization of the directorate.

•

The Petroleum Exploration, Production and Promotion Division (Petroleum upstream) relates to the exploration, production and promotion of oil and gas.

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The main objective of this Division is to create value for society from petroleum activities by:

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Initiating policy and legislation for petroleum exploration, development and production in Namibia;

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Promoting petroleum exploration in Namibia;

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Participating in license negotiations and awards;

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Monitoring the activities of oil companies that are carrying out petroleum exploration, development and production in Namibia; and

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Building a national capacity in the upstream petroleum sector.

1.2. The Petroleum distribution and licensing sub-division: Deals with the evaluation of downstream license applications, do recommendations and issue licenses. It also deals with day to day inquiries on licensing matters and follow ups on outstanding documentation.

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Chapter 7 | Petroleum The Upstream sector is governed by the following legal framework:

to the running of the Directorate, namely the Inspectorate and Economic subdivisions.

Petroleum (Exploration and Production) Act, Act 2 of 1991; Petroleum Taxation Act, Act 3 of 1991;

3.1. Inspectorate subdivision

Petroleum Laws Amendment Act, Act 24 of 1998; and the Model Petroleum Agreement (MPA), 2007

•

It deals with the retail (service stations) and depots inspections countrywide on a yearly basis to ensure that regulations and policies are adhered to. It also monitors whether safety and health standards are being followed and to identify those operating without retail licenses.

•

It also deals with the inspection of drilling units for Health, Safety and Environmental compliance in order to give clearance before drilling in Namibian waters are allowed.

•

It enforces compliance in general to the downstream and upstream spheres.

Licensing system processes in the Upstream sector: 1.

The Petroleum Commissioner receives all applications.

The applications are registered in the License Register by the Chief Inspector of Petroleum.

The Evaluation committee evaluates the applications.

The Petroleum Commissioner seeks Ministerial approval of the evaluation outcomes through the Permanent secretary.

The Minister then communicates the evaluation outcomes to the applicants.

The Government Negotiation Team (GNT) negotiates on behalf of the Minister the petroleum agreements with applicants and makes recommendations to the Minister to award or not to award the license.

The Minister may then approve the recommendations from the Government Negotiating Team.

Thereafter the Company submits the initiated and final petroleum agreement to the Petroleum Commissioner.

The Minister signs the petroleum agreement and approves the granting of the license.

3.2. Economics Subdivision •

This subdivision is responsible for calculating the Basic Fuel Price (BFP) unit rate state, and the drafting of Cabinet Submission, Government Notices and Fuel Price Press Release.

•

They are members of the Fuel Pricing Committee and participate in all fuel pricing adjustment discussions.

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They analyze and scrutinize levy adjustment requests by various institutions and recommends new levies to the Ministry.

•

They also conduct research on oil related projects and activities done by other countries in the SACU region, and attends Interstate Oil Committee Seminars and Meetings twice a year.

10. The Company then signs the final petroleum agreement and makes payments for Rental Fees and Petrofund contributions. 11. The Petroleum Commissioner issues the license. 12. Minister issues letters to unsuccessful applicants.

STRATEGIC PROJECTS IN THE DIRECTORATE OF PETROLEUM AFFAIRS

3. Regulation, Compliance and Economics Division •

This division deals with the monitoring of compliance and adherence to the laws by the industry players. It ensures that license holders are adhering to the Petroleum Laws, the country’s legislation and policies that are in place.

•

It also ensures that petroleum agreements entered into with investors are enforced.

•

It serves as the support function to the upstream and downstream divisions.

•

The Division consists of two (2) subdivisions that are crucial

•

Regulatory Framework Review

•

Strategic storage facilities project management

•

Implementation of Kudu gas project.

•

Implementation of MoU between Namibia and Angola on trade in petroleum to swap crude for refined products.

•

Petroleum upstream data management in conjunction with Namcor.

•

Implementation of Licensing and Monitoring System(LMS)

MINERAL AND ENERGY GUIDE NAMIBIA

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Industry fundamentals being called into question

oil prices have taken a toll on the global oil and gas industry. In December 2014, West Texas Intermediate (WTI) crude prices dropped from over $100 per barrel to less than $60 per barrel, with Brent oil prices following suit. The slide continued into 2015, dipping below $45 per barrel before making a modest recovery. The glut of oil amid lagging world demand is altering trade flows and raising concerns for traditional suppliers. Similarly, North America’s ongoing move towards energy independence continues to reverberate across world markets and may be leading to the emergence of a self‐sufficient energy trading bloc across the United States, Canada and Mexico. For Russia, declining market share among western consumer nations is spurring the country to seek friendlier markets in India and China, a trend that stands to alter geopolitical power structures. In fact, geopolitics is taking center stage and, as a result, increasingly standing as the driving force behind emerging relationships and trade patterns. OPEC, too, is seeking new buyers at a time when it is challenged with meeting the vastly differing requirements of its various member states, causing additional geopolitical turmoil. Predictions for the global energy trade are also evolving. Rather than seeing rampant globalization, natural gas and LNG supply is being consumed closer to source – at least for the time being. As buyers gain greater control than sellers over LNG prices, long‐term contracts are being renegotiated and the construction of new LNG terminals is slowing. The unchecked growth of megaprojects is also losing speed as international energy companies scramble to cut costs. This report takes a look at six of the issues currently impacting the oil and gas industry (and the upstream market in particular). Although by no means a definitive list, these issues include an anticipated shift

W MINERAL AND ENERGY GUIDE NAMIBIA

hat a difference a year makes. Last year, we examined industry fundamentals ranging from prevailing macroeconomic conditions, the supply‐demand balance and regulatory constructs to cost components, commodity prices and the impact of geopolitics. Stemming from that analysis, we considered the waxing and waning of dominance among suppliers; the progression from regionalization to globalization in natural gas markets and the reverse in oil markets; a shift in the global energy mix; the swelling of capital projects to “mega” proportions; and a move towards greater interdependencies among nations. This year, however, virtually all of these ‘fundamentals’ are being called into question. Certainly, declining

in supply‐demand fundamentals, the emergence of new trading patterns, consideration of OPEC’s role in the market – at least over the short‐term, falling LNG prices, the long‐term costs of complex projects and evolving dynamics between integrated oil companies (IOCs) and national oil companies (NOCs). Drawing on research and the views and opinions of our oil and gas team globally, this report aims to provide you with food for thought, while encouraging healthy debate and discussion. As ever, we also encourage you to share your views. To that end, please do not hesitate to contact the Partners listed at the back of this report. Particular thanks go to Adi Karev, our recently retired Global Oil & Gas Leader, for his input into this report, as well as all of our other contributors for providing their input. We hope the combined effort has served to create a report that is relevant, insightful and thought‐ provoking. Anton Botes DTTL Global Oil & Gas Leader

Declining oil prices have taken a toll on the global oil and gas industry. In December 2014, West Texas Intermediate (WTI) crude prices dropped from over $100 per barrel to less than $60 per barrel, with Brent oil prices following suit. 142

Chapter 7 | Petroleum

Shift in supply‐demand fundamentals

s the United States continues to maintain its place as a major producer of both oil and gas, historical energy trade patterns are shifting. The country can now satisfy roughly 90% of its energy needs from domestic sources, up from 70% in 2005.1

On the oil supply front With the loss of the United States as an anchor market, the world’s major oil suppliers are casting about for new buyers. Over the past four years, the United States completed roughly 20,000 new shale wells.2 This has boosted America’s oil production to nearly nine million barrels per day (MMbbl/d),3 a number that rises to 12.5 MMbbl/d when natural gas liquids are included.4 Since 2008, U.S. tight oil supply has risen from 0.5% of the world’s total to 3.7% today.5 Notably, the costs of these wells typically make them quite profitable as well. In 2013, eight of the largest independent oil producers in America had average operating costs of $10 to $20 per barrel of oil (or equivalent unit of gas) produced.6 At the same time, the United States may not be alone in changing supply‐demand fundamentals. For instance, while the Middle East can meet its current needs, demand for both oil and gas in the region is growing. A number of emerging,

and re‐emerging, major suppliers can also potentially change energy market dynamics. Output from Southern Iraq and Iraqi Kurdistan could ramp up, for example, despite the security issues that currently plague the region. Should Iran finalize a nuclear agreement with the P5+1 countries (Russia, China, France, Britain, the United States plus Germany), its oil production could also increase as sanctions are lifted. And production in Brazil, despite its recent political turmoil, still has room to grow. These fluctuating industry dynamics are fueling a power play between traditional and new oil suppliers. The Middle East, for instance, has seen its U.S. market share fall, for both crude and refined products, and is now struggling to work out the fundamentals of how to operate in a market awash with oil. To this end, Middle Eastern producers are aiming to redirect their flow of oil east to Asia, rather than west to the Americas, while simultaneously increasing their share of European consumption. Russia, too, has seen a change in its traditional consumer market as Europe seeks to diversify supply and has also begun to turn to Asia for new buyers, as have smaller suppliers in Africa, like Angola and Nigeria.

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 7 | Petroleum This trend will likely only accelerate should the United States ultimately lift its ban on crude oil exports. To date, the U.S. Commerce Department has only granted waivers for the export of ultralight forms of oil known as condensate. However, at a hearing on March 3, 2015 at the House Subcommittee on Energy and Power, concerns were raised that the export ban – along with continued low oil prices – could force the industry into a protracted downturn. Should these arguments prevail, the implications would reverberate across the globe. Even without U.S. oil on the global market, legacy suppliers are going to great lengths to maintain market share. At its meeting in Vienna in November 2014, OPEC decided to maintain production at 30 MMbbl/d in an attempt to stifle competition from alternative suppliers, including the United States, Canada, Russia and offshore Brazil. To maintain this volume, roughly 2.5 MMbbl/d of offline production in Iran, Iraq and Libya are being offset by a rise in production of more than 2 MMbbl/d from Saudi Arabia, Kuwait, Qatar and the United Arab Emirates (UAE).7 As Saudi Oil Minister Ali Al‐Naimi told the Middle East Economic Survey in December 2014, “If I reduce, what happens to my market share? The price will go up, and the Russians, the Brazilians, U.S. shale oil producers will take my share.”8 Several nations in the region are holding firm on their production levels: Saudi Aramco, UAE’s ADNOC and Kuwait are collectively expected to increase exploration and production (E&P) spending by 14.9% in 2015.9

The world’s biggest demand centers are also shifting. Demand out of China and, to a lesser extent Western Europe and the United States, was once expected to spur long‐term demand. However, the International Energy Agency (IEA) cut demand forecasts and now estimates that oil and gas demand will grow by only 0.9 MMbbl/d in 2015.10 To be sure, China remains a demand center, with imports up 13% in December 2014 compared to a year earlier.11 It was in December that China’s crude oil imports rose above 7 MMbbl/d for the first time12 and, by 2040, those imports could grow to just under 18 MMbbl/d.13 That said, in 2014, the Chinese economy grew by 7.4%, down from 7.7% a year earlier – which represented its slowest growth rate in 24 years.14 While demand may remain strong, the nation’s willingness to pay top dollar for imports may increasingly fade, potentially shifting its sources of supply. For its part, Western Europe continues to suffer from the malaise of the region’s economics. In 2014, European oil demand shrank by 0.20 MMbbl/d, while demand in 2015 is projected to decrease again by 0.10 MMbbl/d15 (see Figure 2). The U.S. Energy Information Administration (EIA) projects European demand will remain at 14 MMbbl/d through 2040.16

Yet, while these decisions are affecting the world’s newest producers in various ways, they will likely not affect the direction in which prevailing trade winds are blowing.

Today’s dominant global oil suppliers may find their influence waning as alternative producers gain market share.

Over time, today’s dominant global oil suppliers may find their influence waning as alternative producers gain market share (see New trading patterns emerging, below).

MINERAL AND ENERGY GUIDE NAMIBIA

Oil demand dynamics

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Chapter 7 | Petroleum

HANDPICKED GEMS

THINK NAMIBIA. THINK RMB.

Our skills, thinking and experience find the best prospects.

MINERAL AND ENERGY GUIDE NAMIBIA

Namibia’s three new mines were financed by RMB Namibia. Global competitiveness, rock solid commitment and a keen eye for potential, resulted in RMB committing funding of N$1-billion to the Langer Heinrich uranium mine, the Otjikoto gold mine and the “Mafuta”, Debmarine Namibia’s new mining vessel at sea. RMB has contributed significantly to the realisation of the NDP4 and Vision 2030 by supporting these and other jewels in the Namibian resources crown. For more information contact Steve Galloway, Henk Ludik or Angelique Peake of RMB Namibia on +264 61 416 150 or visit www.rmb.com.na Thinking that can change our world.

RMB Namibia is a division of FNB Namibia.

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DISTRIBUTION OF MAJOR COMMODITIES IN NAMIBIA www.gsn.gov.na

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 7 | Petroleum

MINERAL AND ENERGY GUIDE NAMIBIA

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MINERAL AND ENERGY GUIDE NAMIBIA

Chapter 8 | Energy

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Chapter 8 | Energy

Chapter 8 Energy

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 8 | Energy

Directorate Overview Director: Energy John Titus

Presentation Outline



Introduction



Namibia Generation and Transmission



Legal Framework-Documents



Industry Status-Current



Routes to renewable energy procurement



Projects in Pipeline



Challenges and Opportunities

Introduction

Republic of Namibia Independence Area Population

MINERAL AND ENERGY GUIDE NAMIBIA

Four power stations – 492 MW Max Demand in 2015- 590 MW

Paratus HFO 12MW

Anixas HFO 23MW

Van Eck coal 120MW

Transmission network: ~11 100 km Distribution network: ~22 000 km

Power Imports: 50% average

Languages

English :Official Other :Oshivambo, Otjiherero, Afrikaans, Damara/Nama

Sectors (% GDP)

58% tertiary, 18% secondary and 18 % primary industry (2014)

Literacy rate

85 % (2011)

Legal FrameworkDocuments

Namibia Generation and Transmission Ruacana hydro 332MW

1990 from South African mandate



White Paper on Energy Policy of 1998



Electricity Act 4 of 2007



National Integrated Resource Plan (NIRP)



Interim Renewable Energy Feed-in Tariffs (REFIT) programme



Net Metering Rules



Rural Electricity Distribution Master Plan of 2010



Off-grid Energization Master Plan of 2007



Petroleum Products and Energy (PP&E) Act of 1990, Section 11 (10 & (2) as amended in 2003.

Import Interconnection ~ 600 MW

150 150

Chapter 8 | Energy

Industry Structure Current Policy Maker

Routes to Renewable energy procurement

Ministry of Mines and Energy

Regulator

Electricity Control Board

NamPower Generation

Energy Trading Import & Export

NamPower Distribution

Licensees (Regulated Entities)

Independent Power Producers

REDs

Local and Regional Authorities

P > 5 MW Tender  Current total cap set at 70 MW.  PPA either Nampower, Regional and Local Councillors or REDs  27 IPP (s) to-date , at least 40% seeking investment partners. List at www.ecb.org

Distribution End Consumers

Other Distributors

License Types

Generation

Trading Import Export

Transmission

Distribution & Supply

Concentrated Power Station   



50 MW capacity. Still at the feasibility stage Ground measurements for solar radiation has started.

PV solar : 30 MW (3 x 10MW solar PV)REFIT-2017  



Tender Closed date. 9 pre-qualified bidders, 6 submitted final bids. Technical and financial evaluation started late September 2015.



Temporary Power Station (Mid 2016- 2019/2020)



Gas Power Stations - 2019



 No monetary compensation.  No generation license required only a contract with RED or Local and Regional Councillors.  Suited for Business owners and rooftop solar home .

Challenges and Opportunities

Projects in a pipeline



RE procurement mechanisms in Namibia

Transmission End Consumers

Transmission

Stop gap measure of about 200MW of firm power until Kudu Power is commissioned

Kudu Gas: 884 MW, 484MW Local and 400MW regional off take.

Hydro Power Stations - 2022   

Baynes Hydro: 300 MW. Technical and Financial feasible studies completed. Environmental and Social impacts studies on-going.

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 8 | Energy

Navachab Gold Mine is an open-pit operation situated 170 kilometers west of Namibia’s capital Windhoek, near the small town of Karibib. The mine was brought into production in December 1989 at a cost of N$85 million. Using best in class mining practices, the operation produces an average of 2.5 tons of gold per annum.

NAMIBIA

OWNERSHIP

BRIEF HISTORY

QKR Namibia Navachab Gold Mine

The town of Karibib has historically been

(“Navachab”) is owned by QKR Cor-

renowned for its high quality marble

poration Limited (“QKR”) the majority

production. Early exploration, however,

shareholder and Epangelo Mining

indicated that some of the marble

Company (Pty) Ltd (“Epangelo”) the

deposits in the area contained sizeable

minority shareholder since July 2014.

amounts of gold.

QKR is a private mining company

In 1984, gold deposits were discovered

backed by a strong and credible shareholder base, focused on acquiring and building a diversified portfolio of development and growth assets in the EMEA region and the Americas. production started

1989

Epangelo is a private company with the Government of the Republic of

MINERAL AND ENERGY GUIDE NAMIBIA

an appraisal study was conducted in 1986 which led to a business decision to deposits discovered. Construction work started in 1988 and

Namibia as the sole shareholder,

the first bar of gold was poured just 21 months later - in December 1989.

rights and ensure that government

2025

exploration drilling the following year,

develop a mine on the site of the largest

established to acquire mineral

estimated life span of mine to go beyond

on the farm Navachab and after

participates in the exploration, mining and beneficiation of minerals of strategic importance, thus realizing higher economic benefits for Namibia.

At its commissioning Navachab Gold Mine was scheduled to have a 14 year lifespan. Based on current reserves, the life of mine is estimated to go beyond 2025. In July 2014, the QKR Corporation purchased Navachab Gold Mine from AngloGold Ashanti plc.

QKR Namibia Navachab Gold Mine P.O. Box 150, Karibib, Namibia T: +264 (0) 64 552 000 F: +264 (0) 64 550 231 E: info@navachab.com.na

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Chapter 8 | Energy

HUMAN RESOURCES

A State of the art health center has been

Navachab Gold Mine employees 380

health related aspects such as medical

permanent employees and on average 400

examinations, primary health care are

contractors. As an employer of choice, we

done one site.

constructed on site to ensure that all

strive to develop our employees, to their fullest potential through a variety of training and development programs. The mine has been rated Affirmative Action Compliant for the past seven years, by the Ministry of Labour and Social Services.

HEALTH SAFETY AND ENVIRONMENT Navachab Gold Mine recognizes that the long-term sustainability of its business is dependent on the responsible and efficient management of the exploration and extraction of mineral resources, ensuring

SOCIAL RESPONSIBILITY

Mission Statement

QKR Namibia recognises and promotes the diversity of the people within the company and its surrounding community. Navachab Gold Mine over the years has taken up initiatives/projects to contribute to the social wellbeing of the community of Karibib, Erongo region and Namibia in general, achieved through partnerships

for communities

with government and other key stakeholders.

the safety of our employees, stewardship

This is largely being done by providing

over the environment and rehabilitation

support to local development plans,

of disturbed areas. We do this by using a

infrastructure development, health,

systematic approach to identifying high or

poverty alleviation, education, sport and

unacceptable risks within the workplace and

youth development at local, regional and

eliminate or reduce them to a tolerable level.

national level.

for employees

for shareholders

MINING OPERATION AND GOLD RECOVERY The Navachab Gold Mine is a continuous

at 66 kV. The step down sub-station is

operation based on a 24 hours, seven days

adjacent to the plant and provides the

per week cycle. The mine is a conventional

mine with 11 kV through a 10 MVA step

open pit operation and ore is selectively

down transformer. The mine has its own

mined at 10 meter benches.

back up supply of power in 1.5 MVA

In order to produce 2.5 tons of gold,

diesel generators.

the mine is excavating and hauling,

Gold is produced using a conventional

an average of around 16 million tons

carbon-in-pulp extraction method,

per annum.

at the rate of 1.4 million tons per annum.

Ore from the pit and from the surface stockpiles is delivered by 90 ton haul trucks to the crusher section, where oversize The crushed material is delivered via a conveyor belt to a concrete storage silo. Ore is withdrawn from the silo and fed via

facility which upgrades lower grade material before it is fed to the CIP plant was added in 2010. The DMS plant pre concentrates low grade marginal ore that is fed to the CIP plant, at the rate of 40 tons per hour.

conveyor into a SAG mill. The mill operates on a power draw of approximately 3,300 KWh at an average rate of 3,900 tons per day. Navachab is connected to the Namibian national electricity grid, operated by NamPower, with a single three phase line

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MINERAL AND ENERGY GUIDE NAMIBIA

material is crushed to size by a jaw crusher.

A Dense Media Separation (â&#x20AC;&#x153;DMSâ&#x20AC;?)

Chapter 8 | Energy

Marenica Energy Ltd (“MEY”) COMPANY

Marenica Energy Ltd (“MEY”) is quoted on the Australian Stock Exchange and Namibian Stock Exchange. It has two substantive assets: the Marenica Uranium Project on EPL3287, a significant but relatively low-grade uranium deposit; and the Intellectual Property (IP) and know-how of the recently developed U-pgradeTM process. Whilst the uranium price remains depressed the focus of the company will be, for the immediate future, obtaining the maximum value from the U-pgradeTM process, with the Marenica uranium asset to be developed with an increase in the uranium price in subsequent years.

THE MARENICA URANIUM DEPOSIT

Marenica has a 75% interest in the Marenica Uranium Project, with a current JORC resource in excess of 57 million pounds of uranium. In spite of this significant size the project was determined to be uneconomic due to its low resource grade and the depressed prices for uranium. • An increase in the leach feed grade from 94ppm to >5,000ppm U3O8, • Similar results in sea water, which is particularly beneficial in a dry environment such as Namibia, • Reduced social and environmental impact per pound of annual production compared to ‘conventional’ technology.

In April of 2006, Marenica Energy entered into a Joint Venture agreement approved by the Ministry of Mines and Energy on 31 May 2006, whereby it could earn an 80% interest in the project. Substantial funds were expended on drilling and engineering studies. In late 2011 a group of consultants completed a Scoping Study and established that the Project was sub-economic using conventional Heap or Tank Leaching processing methods.

MINERAL AND ENERGY GUIDE NAMIBIA

In 2012 the company embarked on a Research and Development program to explore opportunities to reduce the operating and capital cost to improve the Marenica Uranium Project economics. A team of experts was assembled to direct the research. The experts included industry consultants and senior scientists from the CSIRO (Commonwealth Scientific and Industrial Research Organisation) an Australian Government owned and run organisation regarded as one of the pre-eminent research and scientific organisations globally. Since that time Marenica has undertaken considerable testwork and analysis of its ore, which has resulted in a breakthrough process. The results were tested under a range of assumptions and operating factors to confirm the applicability of this new process to the Marenica Uranium Project. This initial bench scale testwork cost over US$3 million, and included successful tests on over 3 tonnes of ore from the Marenica Project. The testwork resulted in the development of a new uranium concentration process, called U-pgradeTM, that is unique and ground breaking and reduces the development and extraction cost of uranium at the Marenica Uranium project. U-pgrade™ is Marenica’s processing technology. On ore samples from the Marenica Uranium Project it has been shown to deliver: • An upgrade in uranium concentration of approximately 50 times at a recovery of over >73% by rejecting ~98% of the waste material (gangue),

The concentration of Uranium in the feed to the leaching circuit dramatically reduces the mass of material (ore) to be leached and therefore the size of the traditional leaching plant and subsequent residue storage facility. Internal cost estimates have indicated a potential reduction in process operating costs using U-pgrade™ of between 50% and 70% and a reduction in capital costs of between 30% and 50% compared to conventional heap leach technology. Given the breakthrough nature of this new process, Marenica has taken the step of applying for a patent to protect this valuable Intellectual Property (IP), which will be known under the trademark of U-pgradeTM. The U-pgradeTM process is a beneficiation process that does not require chemicals and produces a benign waste stream constituting approximately 98% of the mined mass. The very high mass rejection in the U-pgradeTM process reduces the amount of material needing to be chemically attacked by leaching chemicals, in turn minimising the total chemical requirement and reducing the environmental and social impact of transporting and disposing of less chemicals. The U-pgradeTM process produces a concentrate free of acid consumers and the concentrate can be leached in acid leach facilities already existing in Namibia, further reducing the environmental impact, and improving the industry economics. U-pgradeTM amenability bench scale testwork has been completed on other third party Namibian and Australian ore types. The results were predictable, explainable and consistent with the outcomes from the Marenica Ore testwork.

154 154

Chapter 8 | Energy It has become clear that this process has widespread and global applicability to many uranium deposits. It is applicable to surficial uranium deposits with a particular emphasis on calcrete-hosted deposits. During this testwork U-pgrade™ has been shown to be most applicable to Namibian calcrete-hosted, and a number of other surficial, uranium deposits. The emphasis of MEY has therefore evolved from a focus on the Marenica Uranium project to include other relevant Namibian uranium assets, where U-pgradeTM could revitalise their project economics.

THE PROCESS / U-PGRADE™

U-pgrade™ is an invaluable process at any time but particularly now in the current economic downturn and the low uranium price environment in which we find ourselves. It provides the potential to dramatically increase the profitability of medium to higher grade surficial deposits, as well as transform the lower grade ones such as those found at Marenica’s site in Namibia, from sub-economic into economic. With application of the U-pgradeTM process the required uranium price to develop these styles of resources can be greatly reduced. MEY believes that the application of U-pgradeTM will revolutionise processing of surficial uranium by providing a means for these projects to be developed at significantly lower costs and well below current project development trigger prices. In addition, existing producing mines or near term producers will be able to substantially increase their margins as a result of implementing the U-pgradeTM process. The potential application of U-pgradeTM to these sub-economic and low grade resources is the primary target for commercialisation of U-pgradeTM. Marenica, through U-pgradeTM, is positioned to play a significant role in improving the future cost effectiveness of uranium production in Namibia together with a reduction in the social and environmental impacts of such projects. U-pgrade™ is a means of positively impacting on the economic prospects of surficial global uranium deposits, and in particular Namibian deposits, helping to provide fuel for a low-cost and lowcarbon energy source for the future.

Marenica expects that its U-pgrade™ process can benefit

The value of U-pgradeTM comes from an operating and capital cost

155 155

THE PILOT PLANT

Marenica has completed the groundwork to build a fit for purpose pilot plant to test target ores at a larger scale. The mobile and containerised plant will be capable of processing around 50 tonne of ore per month. It is the current plan to initially house the plant at the CSIRO facilities in Perth, WA.

U-PGRADETM COMMERCIALISATION PATHWAY

MEY’s plan to commercialise the U-pgradeTM process includes the following steps • Build containerised pilot plant • Operate pilot plant on Marenica ore to prove the process and de-risk the flowsheet • Make pilot plant available for third party ores • Progress development of the Marenica project or a third party commercialisation structure • Encourage other resource owners to progress their projects with U-pgradeTM as the key to viability

CURRENT STATUS

Marenica has applied to the Minister of Mines in Namibia for a Mineral Deposit Retention Licence to replace the current Exclusive Prospecting Licence, which if approved would effectively allow Marenica a period of 5 years grace with respect to exploration expenditure obligations (noting that all Marenica’s environmental responsibilities are in order), to allow short to medium term focus on the U-pgradeTM process development. Using U-pgradeTM with the Marenica deposit remains a future plan for the Company once uranium prices improve, and MEY looks forward to a long and mutually beneficial relationship with the Namibian government and its people.

CEO: Mr. Murray Hill Marenica Energy Limited phone number +61 8 6555 1816. http://www.marenicaenergy.com.au/ Murray.Hill@marenicaenergy.com.au

MINERAL AND ENERGY GUIDE NAMIBIA

1. Most existing surficial uranium mines in operation right now, by reducing operating costs and improving efficiencies, as well as allowing a lower cut-off grade to be applicable, thereby extending mine life and reducing mining costs, and 2. Many new surficial uranium ore projects stalled in the wake of current depressed uranium prices by decreasing the hurdle or “trigger” uranium prices required to proceed with development. 3. The environmental and social impact of uranium mining as the U-pgradeTM process produces a benign waste stream constituting approximately 98% of the mined mass. Only the balance of some 2% of the mined mass is chemically treated, which dramatically reduces the risk and environmental impact associated with residue (tailings) disposal.

reduction which is compelling for producers across a wide range of uranium prices.

Chapter 8 | Energy

BACKGROUND

MINERAL AND ENERGY GUIDE NAMIBIA

Oshakati Town Council took a ground breaking step in the history of local government in Namibia when it joined forces with Premier Electric (a subsidiary of NamPower) to establish a joint-venture company, Oshakati Premier Electric (OPE), in the year 2000. This was also the year in which the company became operational. OPE’s main objectives are to distribute and supply electricity and to maintain and operate the electrical infrastructure in Oshakati. The Electricity Act of 2000 allowed Local Authorities to commercialise the electricity services through agreements such as joint ventures and private public partnerships. OPE became the first private company to distribute electricity in Namibia. Initially, NamPower and the Oshakati Town Council had equal shareholdings in OPE (50/50). The Oshakati Town Council contributed electrical infrastructure in Oshakati to OPE and NamPower injected capital, equivalent to the value of the assets contributed by the council. In June 2007, NamPower’s investment in OPE was settled and the Oshakati Town Council became the sole shareowner of OPE. OPE is governed by a board of directors and run by a Management team appointed by the Board. It operates within the boundaries of Oshakati Town and is responsible for supplying power to the town of Oshakati; maintaining and upgrading the street and traffic lights and existing and future networks; and for other related services such as account payments, power applications, fault reporting, etc.

History of OPE

The Energy White Paper of 1998 identified the need to restructure Electricity Supply Industry (ESI), subsequent the Electricity Act of 2000 was promulgated. Some of aims for restructuring of the ESI were: • To improve efficiency • To upgrade aging infrastructure • To lower tariffs and • To accelerate electrification projects and therefore stimulate economy, etc The Electricity Act of 2000 allowed Local Authorities to commercialize the electricity services through agreements like, JVC’s, PPP, etc. The Oshakati Town Council (OTC) immediately made use of the opportunity and approached NamPower for a possible smart partnership. NamPower welcomed the OTC initiative and the JVC concept was supported by both line ministries namely; Ministry of Mines and Energy as well as Ministry of Local, Regional Government and Housing.  Some of the objectives for the JVC were: • Reduction of illegal connections and technical losses • Electrification of urban poor localities of Oshakati • Improved administration of Electricity Services • To keep tariffs as affordable as possible, yet sustainable • Reduction of power failures • To grow the demand for electricity • Rehabilitation of the aging electricity network • Job creation • Make electricity profitable etc,

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Chapter 8 | Energy WHO WE ARE AND WHAT WE DO

We deliver effective and efficient electricity supply services to all customers of Oshakati, as well as plan and expand our electrical network to cope with the growing demand. We maintain good relations with our customers and render the following services: • Power supply to the town of Oshakati • Maintain existing infrastructure • New connections • Electrification • Reconnections and disconnections of power on request • Attend to all power failures • Sell prepaid electricity tokens (24hrs) • Account payments and enquiries

MANAGEMENT TEAM

VISION

To be the preferred electricity distribution and supply company in all the areas in which we operate.

Mr. Fillemon N Nakashole Chief Executive Officer

MISSION STATEMENT

Through effective and efficient service, to provide our customers with affordable and reliable electricity, while exceeding shareowners’ expectations, caring for our employees, and expanding our market share.

VALUES • • • • • • • • • •

Transparency Ethical business practices Integrity Accountability Teamwork Loyalty Excellence Honesty Commitment Good corporate citizenship

Mr. leon P Hanekom

SHAREHOLDING STRUCTURE

Executive Manager : Technical Services

Executive Manager : Finance & Corporate Services

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MINERAL AND ENERGY GUIDE NAMIBIA

Mr. Nelson T Sheya

Chapter 8 | Energy MILESTONES

•

Oshakati Premier Electric operates in accordance with a Master Plan that was formulated in 2001 for electrical services in Oshakati and the surrounding areas. This Master Plan governs the orderly implementation of new electrical services and maintenance of the existing electricity infrastructure of the town. Below are some of the milestones that have been achieved by OPE;

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• • • • • • • • • • •

Upgrading of the Main NamPower Supply from a 10MVA (Mega Volt Amp) transformer to 20MVA to cater for load growth. Growth in a return on investments paid to shareholder. OPE currently pays N$ 8 million as are turn on investment to Oshakati Town Council. Reduction of power failures. Reduction of debt collection days to 32 days. Completion of the 2001 electricity master plan thus ensuring growth in the customer base. Commissioning of OPE electricity master plan in 2013 as well as maintenance master plan. Investment in infrastructure as per OPE master plan from its profits and yet remaining sustainable. Providing 24 hour prepaid vending stations since 2003. Two of the bursaries recipients graduated in 2015. Training of our core business employees in obtaining wiremen licensing, in switching authorisation and various other trainings.

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Investing in a power factor correction plant to ensure efficiency and reducing costs of power purchase. Connection of new Customers in previously nonreticulated areas. OPE has managed to distribute power to about 2,600 erven in areas such as Evululuko, Okandjengedi south and north and east, Oneshila , Uupindi north and south, a certain part of Oshoopala and all authorised and enabled local areas. OPE has installed and maintained street lights in Oshakati at no cost to the Oshakati Town Council. This translates to about N$2 million a year. Oshakati main road is now adequately lit up to improve safety and security. High Mast lights. OPE has managed to erect 44 high mast lights, that measure about 25 meters in height, in the Uupindi, Evululuko, Okandjengedi, Oneshila, Oshoopala, Mandume Ndemufayo/Okahao road. Traffic light installations. These were unheard of in the northern part of the country prior to independence. OPE has managed to erect seven traffic lights, a move that has brought controlled movement of vehicles to the town. This has also improved the image of the town of Oshakati which now boast a modern look. Vision 2030. OPE’s mission is to provide electricity to all residents of Oshakati and by doing so compliment and help government to reach Vision 2030

Busisness Continuity and Sustainability

In order to ensure sustainability, OPE is currently at an advanced stage of developing a 10 Megawatt Solar Park at Oshakati, at an estimated cost of N$240 million. This is expected to be completed by the end of 2016. The Solar Park will compliment supply from NamPower, provide back up, improve quality of electricity supply and ultimately provide a cost benefit to customers. Solar Energy is renewable and thus helps reduce the carbon footprint, while at the same time improving OPE’s sustainability. An environmental impact assessment has already been completed and the site has been availed and approved by the Oshakati Town Council. Once this project is completed, it will tremendously increase the asset base of the company.

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The solar plant, which will not be grid-connected, is expected to produce power for about 25 years, a life span that will also allow OPE sufficient time to influence the electricity tariffs at the town. OPE is currently in the process of applying for a licence from the Electricity Control Board. With the escalation of electricity tariffs, the solar plant is expected to help alleviate the high cost of electricity while OPE works towards setting up other generation projects. OPE wants to supply electricity to as many people as possible as part of its contribution to Vision 2030. This will require the company to increase its own electricity generation capacity. Opportunities also exist to supply “smart” electric meters to customers. These meters can allow customers to have access to internet through Wi-Fi connection via the smart meters. As employees are the most important asset of any company, OPE plans to extend the company office space in order to allow the company to employ more workers and accommodate its entire corporate and technical staff at one place. OPE created and continues to create a conducive environment for

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Chapter 8 | Energy Corporate Social Responsibility

Oshakati Premier Electric is determined to plough back into the community where it operates as well as to Namibia as a whole. Through corporate social investment, the company has over the years made sponsorships and donations in the fields of education and sport, and supporting the community in different activities. One of the main investments that OPE has embarked upon since 2011 is offering bursary opportunities to undergraduate Namibian students to pursue their studies at tertiary institutions in the country. Every year OPE has sponsored at least three students to study in the field of Electrical Engineering. Two students have graduated this year. OPE has further made sponsorships and donations to schools, public and private sectors in and around northern Namibia over the past 15 years. Some of the beneficiaries include - Oshakati West Primary School, Onamambo Primary School, Oshigambo High School, Omusheshe Combined School, Kleine Kuppe Private School, NAMPOL, Oshitemo Festival, OTC Sports Tournament, SpelQuizBee, Nantu Oshana World Teachers Day, UNAM Engineering, Career Fair Oshana, Lutheran Theological Seminary, Youth Against Crime & Gender Based Violence, Namibia Chamber of Commerce, Totem Expo, Horse Riders: Loraine Du Plessis and Liezle Du Plessis, Ongwediva Annual Trade Fair, Kandjengedi Primary School and the Oshakati Town Council Cleaning Campaign. OPE strives to meet the Government halfway in assisting the Namibian community at large where required, to enable the dream of Vision 2030 become a reality.

investors in Oshakati, such as the envisaged Coca Cola bottling plant scheduled for operation in mid-2017 and the Afrideca plans to add on what is called the Game Complex by constructing a larger complex which will be 50% larger than the current one.

Awards and Recognition

2012 - Electricity Control Board Awards. OPE was recognised for the lowest collection cycle and the lowest bad debt percentage. 2014 - Electricity Control Board Awards. OPE was awarded the prize for the Most Consistent in deriving value from power quality investments.

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Corporate struCture (ContInued)

ManaGeMenT CoMMiTTee

Erongo Red meets mining and energy demands

Mr. R Jagau CHIEF OFFICER: Power System Development

NAMPOWER ANNUAL REPORT 30 JUNE 2011

MINERAL AND ENERGY GUIDE NAMIBIA

Mr. P I Shilamba MD: NamPower

Robert Kahimise - CEO

Mr. M Gotore CHIEF OFFICER: Finance, Treasury & Property Management

Amb. M N Nashandi SENIOR MANAGER: Strategy & Compliance

Mr. I Tjombonde

Isac Tjombonde - Chairman CHIEF OFFICER: Corporate Services

Mr. A J Vermeulen ACTING CHIEF OFFICER: Technical Services

Envisaged as a dynamic and efficient commercialised electricity distributor for the Erongo Region, the Erongo Regional Electricity Distributor Company (Pty) Ltd, commonly known as Erongo RED, started trading on 1 July 2005 within the context of the Namibian Governmentâ&#x20AC;&#x2122;s National Development Plan. Erongo RED was formed by merging the service of electricity distribution from various municipalities and town councils in Erongo region namely the Municipality of Walvis Bay, Swakopmund, Henties Bay and Omaruru; the Town Council of Karibib, Usakos and Arandis;

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Chapter 8 | Energy Erongo Regional Council; and NamPower. All these individual institutions are shareholder of Erongo RED. The initiative to create RED’s was part of the Electricity Supply Industry (ESI) and Electricity Distribution Industry (EDI) restructuring Policy to distribute and supply electricity through economies of scale, pooling of human and operational capital resources to ultimately stabilize electricity prices and ensure reasonable, affordable and cost reflective tariffs to electricity consumers. The company purchases electricity from NamPower for both urban and rural customers. The electricity is transmitted and distributed to different customers ranging from large industrial customers, businesses to the residential customers. Erongo RED uses about 15% of the total electricity requirement of Namibia. Electricity industry in Namibia is regulated by Electricity Control Board of Namibia, thus Erongo RED operates under the set regulations. The core business of the Erongo RED is to distribute and supply electricity within the mighty region of Erongo. Erongo RED received a distribution and supply licence which is valid until 2030. The company also received a generation licence in 2006 for embedded power generation for a 220 kw wind generator near Walvis Bay, the first known network-connected wind generator in Namibia. “We are working to make this not just a successful business, but an essential organization that is a catalyst for the regional and national economic development,” says Isac Tjombonde, Chairman of Erongo Red. In the 2013/2014 financial year, notwithstanding inherent industry related challenges, Erongo Red has met expectations and in some cases exceeded them. The company’s revenue increased by 14 percent in the current financial year ended 30 June 2014, from N$ 673,059.893 in 2013 to N$ 767,906,078 in the year under review. The company recorded a net profit after tax for the year ended June30, 2014 of N$ 55,680,273. This represented an increase of 26% from the net profit after tax of the prior year of N$ 44,168,555. This increase is driven by the growth in revenues of 14% and operating expenditures remaining flat compared to the previous year. Company cash flows from operating activities decreased by 75% from N$ 84, 175,490 in the prior year to N$ 21,260,587 for the year ended June 30, 2014 attributable to the reclassification of un-cashed cheques to trade and other payables in the previous year and inventories to property plant and equipment. With N$ 8 million in dividends paid out to shareholders during the period under review, the company’s major headache is keeping abreast with the advancing technology. We have noticed an interesting development, whereby customers are migrating from making walk-in payments, to preferring electronic payment options, as well as a shift from traditional paper-based snailmail accounts to electronic bills.

The second biggest challenge being addressed is to systematically provide electricity to our citizens in the more remote regions of Namibia where there is presently no access to electricity. Hence, the challenges facing Erongo RED and the society its serves are linked as the organization is continuously expected to improve electricity access to our consumer value proposition at the lowest cost, while

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Erongo Red has embraced digital technology by expanding our prepayment vending footprint through Cellphone vending, and have upgraded the company website to a more interactive website and customer focus, allowing customers to view their profiles and to engage the company on improving service delivery. Our SCADA system implemented in 2010 for Walvis Bay is also operating efficiently hence the need to extend this service to other areas in Erongo Region. This digital technology assists the company in marking its grid more resilient when responding to power outages in our area of operations.

Chapter 8 | Energy the production cost of the commodity is increasing due to demand outstripping supply. In order for Erongo RED to appropriately respond to the needs of its customers, data analytics is used in profiling customers with the aim of devising lasting solutions of bringing the unconnected to the grid. We are cognisant of the importance of electricity not only for household usage but for industrial usage as well. As we have learned throughout our history, the key to success is getting the big things right, innovating accordingly, and challenging ourselves to come up with smart solutions. For three consecutive years, Erongo RED has been able to pass tariff increase between 2% and 3% lower than the national utility (NamPower) tariff increases in order to reduce the impact of high electricity cost on our customers. As part of our vision to bring electricity to all by the year 2020. Erongo RED has during the period under review focused on providing electricity to people who were never connected to the grid. Over N$ 3 million was spent on electrification projects in Uis, Karibib, Omaruru and Usakos. Between June 2013 and June 2014, more than 300 houses were connected in these towns. Settlements such as Otjimbingwe and Okombahe have also been earmarked for electrification in the next financial year. The progress we are making on these strategic imperatives is highly encouraging. We are confident in our vision, our mission and our corporate values and we will continue to push ourselves to the limit in order to meet the expectations from our shareholders as well as our customers. For Robert Kahimise, Erongo Red Chief Executive Officer, “More customers than ever tell us that they are satisfied with our service; the number of complaints has also decreased significantly as most of the customer queries are now solved at the Call Centre.’’

At Erongo Red, we do not let the growing demand for electricity distract us from fulfilling our mandate and preparing our company for the future. We stayed focused on our mandate to distribute and supply electricity. Investing in our electricity infrastructure is very important for the continuation of the business. Recently, we have prioritized our investments around specific projects where we see opportunity for greater return and where we can make a difference in the lives of our people. The upgrading work on the Walvis Bay bulk upgrade is progressing well. To date, Erongo RED invested over N$60 million in this project. The company continues to contribute to the government efforts in curtailing poverty in the country through subsidised electricity to the pensioners. About 4 447pensioners and low income earners are currently benefiting through subsidised electricity tariffs. In addition as part of our efforts to bring electricity to all by 2020, we have energised 337 houses with electricity in Uis, Omaruru, Karibib and Usakos. In addition, we have strengthened our commitment to running Erongo RED as a high-performance business. We have upgraded our networks to optimize delivery of service across all our customers, and we further streamlined internal operations as part of our ongoing implementation of performance management system. Together, we are making Erongo RED a stronger, more successful company and, in doing so, driving forward our vision of “electricity to all by 2020’’ for a better Erongo region

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While we are very proud of our financial outlook of the company, we will continue, we will continue to improve and harness our skills and experience to leapfrog the growth of the company, which will be

particularly important given the challenges faced by the electricity supply industry. We are committed to improve service delivery. Our top priority remains our clients and ensuring that they receive the highest service from any of our employees. In the period under review, we continued to attract new clients and expand relationships with existing clients through the new consumer connection and “power to the people’’ project.

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PREVENTION WORKS. PROTECTING YOUR PEOPLE TO FUEL YOUR GROWTH. As more and more individuals work across borders in unfamiliar environments, exposure to risks which can impact on personal health, security and safety increases. With our expertise in the mining, energy and infrastructure sectors, we can help you to take control of your total health and travel security agenda. From pre-travel to return-to-work. We can help reduce your total medical and travel security costs. Contact us to tailormake a solution to fulfil your Duty of Care.

INTERNATIONAL SOS NAMIBIA OFFICE: Tel: +264 61 289 0906 Address: International SOS, 7A, Southport Building, Cnr Mandume Ndemufayo and Hosea Kutako Ave, Southern Industrial Area, Windhoek

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Chapter 8 | Energy

NamPower, Namibia’s national power utility, was born out of the then South West Africa Water and Electricity Corporation (SWAWEK). SWAWEK was formed on 19 December 1964 as a private and fully affiliated company of the Industrial Development Corporation (IDC) of the Republic of South Africa. Key to SWAWEK’s success was the effective development of the hydropower station – the Ruacana Scheme – and the establishment of a transmission system for the distribution of electricity through the country’s central districts to Windhoek. Throughout its 32-year history, SWAWEK made a valuable contribution to the country’s economic development. By the early 1980s, the network covered most regions and eventually in 1978, the Ruacana Scheme was energized, with a capacity of 240 MW. SWAWEK’s last significant act (in association with Eskom) came in May 1996, announcing its intention to construct a 400 kV power line over a distance of 900 km between Aries in Kenhardt in South Africa, via the Kokerboom substation near Keetmanshoop to Auas, near Windhoek. In July 1996, SWAWEK became NamPower.

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Chapter 8 | Energy Establishment of NamPower NamPower, Namibia’s national power utility, has for decades been a mainstay of the nation’s economy and is now positioned, in a free, independent and stable Namibia, to be a main driver of Vision 2030, Namibia’s blueprint for broad-based, sustainable economic growth. For NamPower, comprehensive energy provision and supply efficiency throughout Namibia became an even greater priority and with the dawn of the new millennium and in keeping with the Electricity Act (Act 2000) which called for the national power industry to restructure, the company publicly committed itself to the further development and social uplifting of the Namibian people. As a state-owned enterprise, NamPower reports to the Ministry of Mines and Energy and is regulated by the Electricity Control Board. The utility is registered as a company and thus operates according to the Companies Act, under the guidance and direction of a Board of Directors

Core Business NamPower’s core business is the generation, transmission and energy trading, which takes place within the Southern African Power Pool (SAPP), the largest multilateral energy platform on the African continent. NamPower supplies bulk electricity to Regional Electricity Distributors (REDs), Mines, Farms and Local Authorities (where REDs are not operational) throughout Namibia. NamPower understands the important role that electricity plays in all aspects of socio-economic development – not just in driving the machines and equipment that keep Namibia’s factories, mines and farms going, but also in powering our schools, our offices, and our very lives. Behind all these activities are more than 950 dedicated employees and management directed by a Board of Directors, who diligently guides and enforces strict adherence to corporate governance principles. The company’s favorable financial rating over the past few years has paved the way for it to raise financing from the capital markets for its long-term projects.

Namibia’s main sources of Power Generation •

120 MW coal-fired Van Eck power station in of Windhoek

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24 MW diesel-powered Paratus power station at Walvis Bay

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22.5 MW ANIXAS diesel-powered station at Walvisbay

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332 MW hydro-electric Ruacana Power Station at Ruacana

Transmission Network

National Control Centre The ‘pulse’ of NamPower – the National Control Centre, situated in Windhoek - operates on a 24 hour basis to ensure system availability and is responsible for the total operation and management of the NamPower transmission and distribution system.

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A look ahead NamPower’s success is built on very strong foundations.. Moving forward, the company will continue to invest in powering the nation, protecting our environment, uplifting marginalized communities, providing excellent customer service and meeting the aspirations of our staff now and for generations to come. In all these efforts and more, NamPower will continue to value the contribution and support of stakeholders throughout the electricity supply industry, and throughout the nation as a whole.

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NamPower owns a world-class transmission system and network of 132 kV to 400 kV of overhead power lines spanning a distance of more than 25,000 kilometers, one of the longest of its kind in the world and enough to circle a continent. The national grid has been homegrown – designed and largely built by Namibians. Continuous investments are being made to strengthen and maintain the national grid in a superior condition to ensure an efficient and effective network with minimum disruption.

Chapter 8 | Energy Kuiseb Walvis Bay Line

The contract for the upgrade of the Kuiseb Substation to 132 kV has been awarded in March 2013 and has commenced. The new 132/11 kV Walvis Bay Substation is currently in tender stage and will be awarded by August 2013. These two projects will be implemented in phases with final commissioning in the last quarter of 2016.

Auas - Rehoboth Project

The 132 kV Naruchas Transmission Station was commissioned in March 2014 together with the 132 kV Auas Naruchas feeder.

Auas - Khomas Project

The 132 kV Naruchas Transmission Station was commissioned in March 2014 together with the 132 kV Auas Naruchas feeder.

Omburu 220kV Filter Banks

40MVar Filter bank commissioned at Omburu transmission station in 2010.

Omuthiya Project

The 132 kV Omuthyia Transmission Station was commissioned in March 2014 for the provision of a supply to the town of Omuthyia.

Efundja Project

Transmission Projects

Rundu Cuito 132kV Strengthening EIA studies for the 132kV line from Rundu to Cuito (east of Rundu) have commenced and supply should become available in the second half of 2015. This project includes dynamic voltage support at Rundu.

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Kunene Omatando 400kV

The 132 kV Efundja Transmission Station was commissioned in December 2012 together with the 132 kV Efundja Ondjiva feeder to ENE, Angola.

Namibia Customer Upgrade

Smelters

Supply

Upgrade of the supply to Namibia Custom Smelters outside Tsumeb to 132 kV from Otjikoto Transmission Station.

350kV HVDC Caprivi Link Interconnector

EIA studies for the 400kV line to be built from the Kunene substation (25km south of Ruacana) to Omatando (near Ongwediva) has commenced. The project should be concluded by the second half of 2016. The 400 kV Kunene and 400/132 kV Omatando Substation will be the first NamPower Substations built on a breaker and a half arrangement.

The Caprivi Link Interconnector HVDC Scheme was put into commercial operation in October 2010. This 300MW capacity DC transmission scheme links the NamPower network to the ZESCO transmission system in Zambia, it also provided the first and only connection of the Zambezi region to the main transmission grid of Namibia.

Kudu Transmission Integration

Otjikoto 220kV Filter Banks

The planning of the integration of Kudu Transmission Station into the NamPower Transmission Network and the Eskom Transmission Network is at an advantaged stage of planning and is foreseen to consist of two 400 kV feeders to the Eskom network and one 400 kV feeder to the NamPower network as well as other deep connection upgrades in the NamPower network depending on the PPAs.

West Coast Strengthening

The project consists of: • 1. A twin-circuit 220kV transmission line from Walmund near Swakopmund to Rossing that was recently commissioned; • 2. Another 220kV transmission line from Khan (near Ebony siding) to Lithops and Walmund to Kuiseb; • 3. Twin-circuit 132kV line to the new Husab Mine that was commissioned in December 2013. A substation called Lithops (near Arandis) which will provide the main supply to Husab will be commissioned in November 2014.

20MVar Filter bank commissioned at Otjikoto transmission station in 2010.

Khomas Project

The project will entail the development of a 120 MVA n-1 220/132 kV supply to the west of the City of Windhoek to cater for the increasing load of the capital. The station will be developed on a breaker and a half substation arrangement and integrated into the existing 220 kV Van Eck Kuisbe 1 circuit.

GENERATION PROJECTS Baynes Hydropower Project NamPower plans to build one of the highest concrete faced rock fill dams (CFRD) in Africa. The Baynes Project will take six years to complete and has an installed capacity of 600 Megawatt. The Baynes Hydropower Project, situated along the Cunene River,

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Chapter 8 | Energy 200 km downstream of Ruacana is one of the long term projects in the feasibility phase, and essentially emanates from initial studies conducted on the Epupa and Baynes sites along the Cunene downstream of Ruacana between 1995 and 1998. The studies conducted revealed that while the Epupa Site was technically preferable due to greater storage capacity, the Baynes site would be less disruptive to the life of the indigenous Himba people, and would have lesser environmental impact. The Baynes Hydropower Project was initiated after the Firm Power Contract (FPC) with Eskom expired in 2005 and could not be renewed due to a critical power shortage faced in South Africa at the time. Imports became significantly more expensive, especially during peak hours and consequently both the Angolan and Namibian governments agreed to study the Baynes option further. The Permanent Joint Technical Commission (PJTC) appointed the Cunene Consortium (CC) to perform a Techno-economic Feasibility Study (TEFS) on the Baynes Hydropower Project, and Environmental Resources Management (ERM), to independently conduct the Environmental and Social Impact Assessment (ESIA), in parallel and in close consultation with the techno-economic study. Studies of the three site alternatives for water levels 580, 560 and 540 metres above medium sea level (mamsl) has been concluded, which means that for the maximum level of 580 mamsl, the dam level will only reach the foot of the Epupa Falls. The CC has also presented a positive outcome of the preliminary findings of Phase 3 of the TechnoEconomic Feasibility Study, and deliberated on the Draft Bi-lateral Water Use Agreement on the Cunene River which deals with issues such as the establishment of a Bi-National River Authority, the establishment of the Baynes Hydropower Company, concessionary agreements between Angola and Namibia with the Baynes Hydropower Company for the development, operation and maintenance of the power station. It is envisaged that the Baynes mid-merit/peaking power station’s capacity would be 600 MW which will be shared equally by Namibia and Angola. Like Ruacana Power Station, the new dam will function as a mid-merit peaking station, so that NamPower can avoid buying imported power during peak hours. During the wet season the Baynes Power Station will run at full capacity, while during the dry season the generators will generate at maximum during mid-merit/peak periods only whilst 71 MW would be generated during the off-peak periods.

turbines, two with a capacity of 71 MW and three 156.75 MW turbines. The Substation will be located nearby the power plant occupying an area of about 150,000m².

Construction:

The engineering and construction work is time-consuming. From the moment of commissioning which could be around 2014, the dam will take six years to be constructed. This means that Baynes will only start feeding power into the grid towards the end of the decade. . By that time power demand will have risen significantly from the current 511 MW peak consumption, so it is important to note that Baynes is just one of the generation projects that NamPower is embarking on. The Kudu gas power station in Luderitz or a coal fired station at the coast will likely be finished several years before Baynes. . The construction work will commence with excavating a bypass tunnel on the Namibian side where the rock is most competent (see visual). Next, two coffer dams will be constructed upstream and downstream from the site, so that the area in between is laid dry. The coffer dam will also serve as river crossings during construction. . A 1.3 kilometer overflow canal or spillway will be constructed to prevent the dam from overtopping and which is required for the protection of the dam wall. This canal is partly lined with concrete and has cascades to slow down the flow of water. . Construction roads need to be built and the hydropower station will be constructed in all likelihood to straddle the border of the two countries. The dam wall itself will form a bridge between Angola and Namibia. There will most likely be two 400 KV lines evacuating the power from the gorge to Namibia and Angola.

Long-term benefits:

Hydropower needs specific mention as a renewable source of energy and traditionally the only contribution to greenhouse gasses by hydropower projects are from plants decaying within the dam basin. The Baynes Hydropower station is a very valuable generation asset that has the potential of supplying Namibia and Angola with reliable, clean electricity for generations to come, making the estimated investment of US$1.2 billion well worth it.

Dam:

Hydropower Station and Substation:

The hydro array at Baynes will consist of five Francis Vertical Axis

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The structure of the dam consists of a rock fill embankment with a concrete face. In total the rock fill will be 12 million cubic meters. The water face of the wall is lined with a concrete face that is about 80 centimeters thick at the bottom and around 30 centimeters at the top and provides the water tightness to the dam wall. The maximum dam wall height at Baynes will be 200 metres; the reservoir will be 43 kilometres long and have a maximum width of 4 kilometres. The area inundated by the reservoir would be 57 km2 and will hold 2,650 million m³ of water which is about half of the river’s annual runoff of 5,000 million m³. On average, 159 m³/second will flow through the dam and in the dry season and during off-peak hours, a minimum flow of 50 m³/second will be maintained in order to sustain all the living organisms and to maintain a healthy ecosystem downstream of the dam. The water head of Baynes will be an astonishing 187 meters, while the dam wall will be 200 meters high. Although the capacity of the Baynes dam is smaller than that of Epupa’s forseen 7,500 million m³, it has an annual average electricity generation of 1,610 GWh and is certainly not regarded as a small hydro power station. Kariba, one of the largest dams in the world has an installed capacity of 1,200 MW and an annual generation of 6,400 GWh.

Chapter 8 | Energy Rural Electrification NamPower Fund

In line with its mandate and corporate social responsibility policies, NamPower understands that to extend power to rural communities in Namibia will lead to the improvement in quality of life in rural communities and provide opportunities for economic development. As early as 1991, NamPower started investing in rural areas and together with the Ministry of Mines and Energy embarked upon the implementation of the Rural Electrification Programme. NamPower increased its rural electrification budget to N$20 million from N$15 million since the 2011 Financial Year, and in the 2012/2013 Financial Year, an additional N$9 million was spent on providing and installing prepaid metres to Village Councils in the Southern Region. NamPower increased its rural electrification budget to N$25 million from N$20 million in the 2014/2015 Financial Year.

Renewable Energy

Independent Power Producers (IPPs)

Off-grid

NamPower is providing technical advice and supervision for expansion of the Tsumkwe PV/diesel hybrid plant; and following this success at Tsumkwe other locations are being investigated. At the first of these, a new PV plant in Gam, NamPower will provide the same inputs and support as it did at Tsumkwe.

Netmetering

NamPower continues to investigate new generation methods and to lead by example. The company has now completed two test solar projects, in Windhoek and Usib (Rehoboth). These projects, of 64 kW fixed PV and 26 kW tracking CPV respectively, utilise the latest technology to provide NamPower with data and direct operational experience. Further exploration in this area will occur as NamPower “solarizes” two of its residential premises in Okahandja and Rehoboth.

Biomass Feasibility Study

A pre-feasibility study via a grant from KfW of Germany has been completed and shows that it is technically feasible to build 10-20MW plants utilising invader bushes as a fuel source. NamPower seeks now to capitalise on this by investigating the building of a hybridized power plant combining biomass with solar to increase output and improve plant performance.

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NamPower continues to negotiate Power Purchase Agreements and Transmission Connection Agreements with Diaz Power (wind power generation of 44 MW at !Nami=Nüs (formerly Lüderitz)) and GreeNam (solar PV of a combined 20MW). A special steering committee chaired by the Permanent Secretary of Mines and Energy, and with representatives from ECB, NamPower and the Renewable Energy & Energy Efficiency Institute of the Polytechnic of Namibia, was formed to oversee all renewable energy projects. Nationally, the Ministry of Mines and Energy has now implemented the Renewable Energy Procurement Mechanism that requires tendering for all renewable energy projects larger than 5MW in size. NamPower expects to acquire an additional 30MW of IPP capacity (3 projects of 10MW each) via this tendering route in the near future. The C-Bend Bush-to-Energy IPP biomass project which has a signed Power Purchase Agreement with NamPower has encountered technical difficulties. NamPower remains hopeful that with help from the regional electricity

distributor CENORED, this 250kW concept plant will ultimately fulfil its potential.

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Rural electrification programme Our ministry is entrusted with the implementation of the rural electrification programme. Objectives of rural electrification a improve the living standards of rural communities a increase economic & commercial activities in Rural Areas Reduce unemployment through job creation a improve quality of health and educational facilities in rural areas In 2000, the Ministry has developed a Rural Electricity Distribution Master Plan for Namibia, to guide the implementation of the Programme. Acknowledging the vast distances and low population densities in Namibia the Master Plan considers both grid and off-grid (Solar Systems) electrification options. The mainly priority is given to economically active centres such as schools, clinics, other government institutions and business. Rural Electrification Panning is done in consultation with the Regional Councils. So far about 48,000 connections have been achieved in rural areas being it Homesteads or business centres. About 1,800 public institutions have been provided with electricity. Electricity Distribution Industry (EDI) Reform Electricity is a key ingredient of economic development and industrialization, and this requires a stable and reliable electricity supply and distribution network. White Paper on Energy Policy was developed 1998, to guide and shape the development of the Energy Sector a The Policy identified the need for reform the Electricity industry. EDI Reform Studies was carried out between 1998 and 2000 and Cabinet approved the study recommendations in 2000 to establish Regional Electricity Distributions. The study further recommends that the REDs must be viable entities, and should be owned by Electrical Assets contributors which are Regional Councils, Local Authorities and NamPower WHY REDS Highly fragmented , many small entities

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Large differences in tarrifs and tarrif approaches

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Networks in many local authorities and regional councils will keep deteriorating until collapse or bail –out

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-Example: Omaheke Regional Council-MME bail-out N$28 million to date

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Varying degrees of:

customer service problems

lack of maintenance on networks

lack of skills and equipment lack of commercial orientation & discipline (cut-offs) quality of supply problems safety concern/ lack of standards

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Chapter 9 | Training

Understanding the Namibia Energy Institute

Vision: To be a leading institute for energy research and development in Africa and beyond.

Our Centres

Mission: To contribute to Namibiaâ&#x20AC;&#x2122;s industrialisation by linking energy research, technology, policy, and education to the needs of industry, and to national socio-economic development imperatives, initiatives and programmes.

Centre for Electricity Supply (CES)

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Strategic Goals 1. Collaborate with industry, government, development partners and academic institutions in transformational research projects and educational outreach for new approaches to the worldâ&#x20AC;&#x2122;s energy opportunities. 2. Catalyse the transition to advanced sustainable energy exploration, generation, distribution and utilization, through coordinated research and development, capacity building and project management. 3. Provide a forum for constructive debate to facilitate innovation, development, deployment, and dissemination of energy technology knowledge and good practice. 4. Enhance public understanding of energy resources and technologies and their role in society, in order to address the barriers that hinder increased use and access to modern energy technologies.

The CES is established to contribute to the training of the next generation of power sector personnel, regulators and policy makers. It will also help develop strategies and competences for sustainable generation, transmission, storage, distribution and use of electricity in Namibia. Focus areas will include customer relations and occupational safety, modern and intelligent grids and policy and regulatory development. The electricity supply industry (ESI) generally encompasses the entire value chain from power generation to retailing and most importantly the policy and regulatory functions. The present scenario in Namibia is such that the Electricity Control Board (ECB) is responsible for regulating the industry whilst NamPower, which is a state owned utility, is responsible for power generation, transmission, trading and partial distribution. Space has been opened for IPP to participate in power generation while regional electricity distribution companies (REDs) have been established to purchase bulk power and manage its distribution to end-users.

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Chapter 9 | Training Mandate The Centre for Electricity Supply (CES) will provide technical support to the ESI to optimally provide consumers with adequate, safe and reliable electricity service. This mandate will be fulfilled through: 1.

Research and development (R&D) in modern and future electricity networks, generation technologies and safety and service standards.

Building relevant technical capacity to operate and manage modern and future power infrastructure.

Train personnel through short courses and workshops in high voltage switching systems operations, fault analysis and protection, distribution automation, systems loss reduction, testing and maintenance, RE technologies, demand side management techniques, smart grids, deregulation and re-regulation, pricing, billing and accounting, procurement and contract negotiation, etc.

electricity to marginal areas are required. Modernisation of the power infrastructure is key to an efficient and sustainable grid and the ESI in general. Supportive policies and regulations appropriate to Namibian conditions need to be designed.

Technical Advisory Services and Training CES will provide an important link between industry, policy and regulatory environment and consumers by providing the necessary but neutral and informed knowledge base. CES will help develop and review relevant policies and regulations that will govern the industry. It will also research and develop relevant technologies such as smart grids, distributed and micro-generation, safety equipment, etc. Areas of training and capacity building will also include occupational safety, customer relations, quality management, regulations, standards and energy management.

Conduct market demand and supply surveys and technoeconomic feasibility studies for the industry.

Assist NSI in formulation of specifications and technical standards.

Provide technical support and technological services to the industry and heavy consumers.

Assist the industry in absorption, adoption and selection of technologies.

Provide a key link between industry and government to promote awareness and understanding of the technologies and the service as well as encourage and influence supportive policies and programs.

Promote industry regulation through development and promulgation of industry standards, codes of practice, training and accreditation programs, seminars and conferences.

Centre for Nuclear Science (CNS) The CNS is established to research on and promote radionuclides in constructive science and technology and will play an important role in analysing the nuclear fuel cycle for Namibia’s beneficiation and competence development thereof. The diverse applications of nuclear sciences ranging from medical, agricultural, industrial to energy technology will be studied. The CNS will work closely with MME, Ministry of Health and Social Services (MHSS), National Radiation Protection Authority and Agriculture, Forestry and Water Affairs, as well as industry, including mining. Namibia aspires to be an industrialised country by 2030. Science and technology is the bedrock of industrialisation. Advances in medical sciences, agriculture, industrial technology and affordable and sustainable energy are key to Namibia’s economic development.

Mandate

10. Inform society about policies and activities relating to the industry and its significance to the national economy.

CNS is proposed to have a mandate to promote the beneficial use of peaceful nuclear technology for Namibia’s economic development primarily through technical and policy research and training. The mandate will be fulfilled in the following key sectors;

Key Stakeholders

• Power generation

Strategic stakeholders in the electricity supply industry include;

• Nuclear medicine including diagnostics and therapy

• MME,

• Food processing

• Electricity Control Board,

• Agricultural research and applications

• NamPower,

• Uranium mining and processing

• REDs and local authorities,

• Nuclear waste management Key stakeholders

• Large power users

The local stakeholders include; • MME

Strategic Focus Namibia’s electricity generation capacity and demand is very small compared to that of other countries in the Southern African Power Pool (SAPP). The situation is expected to improve as a result of increased economic development. The mining sector and other sectors such as raw materials processing are likely to spur electricity demand. Rural electrification is also likely to bring economic development and increased demand for electricity in rural areas. The cost of grid extension to rural areas is uneconomic due to long distances involved, low population densities and, most importantly, low economic activities in the areas requiring electricity to support the cost of bringing the grid to those areas. Innovative ways of bringing

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• MHSS • MAWF • NARPA • Chamber of Mines’ Uranium Institute • Uranium mines • NSI

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• Independent Power Producers, and

Chapter 9 | Training Technical Advisory Services and Training The Centre shall be active in risk management, quality control and assurance covering issues of reliability, maintainability, availability, supportability, safety of complex technical systems, quality system implementation, and computer aided tools for quality engineering, etc. Research activities will concern classical aspects of physics, chemistry, biology, medical, power engineering, environmental protection, etc. Some of the research activities will include: Radiation sterilization of single use medical devices, food additives and pharmaceutical products, • Radiation dosimetry and protection for environmental and professional expositions, metrology, and biophysical aspects as DNA radiation damages, • Medical laboratories radiation waste management. • Nuclear techniques in the assessment of groundwater recharge to aquifers, groundwater fingerprinting and age determination to derive groundwater flow patterns and the storage capacity assessment. Central to the modus operandi of the Centre is the training of professionals in the field of radiation protection and other specific fields, quality management system and business innovation, testing, quality control and certification of different products in collaboration with NSI. Short courses for professionals will be offered in conjunction with National Radiation Protection Authority (NRPA), the IAEA and the World Nuclear University (WNU). WNU is a global partnership committed to enhancing international education and leadership in the peaceful applications of nuclear science and technology. Some of these courses include: • Global Environmental Challenge and Nuclear Power • Nuclear Fuel • Nuclear Power Plant Design Management • Nuclear Safety • Radiation and Health • Non-proliferation Regime and Security • Waste Management • Decommissioning of Nuclear Facilities

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Strategic Focus Namibia is still developing in the world of nuclear sciences and still concerned with issues of regulations for the safety and secure management of radioactive waste, protection against ionizing radiation and for the safety of radiation sources. The Centre will have strong infrastructural support for R&D activities and state-of-the-art facilities for analysis, evaluation and testing of radionuclides. It shall offer technical assistance and consultancy to industry. The Centre will work with the National Radiation Protection Authority, International Atomic Energy Agency (IAEA), World Nuclear University and other nuclear science related institutions to tap into the vast knowledge and expertise in the field. The Centre will conduct specialized training programmes for technical and non-technical personnel from policy, regulatory side, uranium mining companies, agriculturalists, health professions and power plants. In order to do that, the Centre will in medium-to-long term have dedicated, experienced and qualified staff and will be equipped with comprehensive state-of-the-art R&D facilities.

• Non-power Applications • Nuclear Politics • Future Nuclear Technology

Centre for Oil and Gas (COG) The COG is established to develop competences and capacities in the development of the nascent upstream petroleum and gas industry and support the fledgling downstream side in Namibia. Some of the skills and competences required by the industry include: Reservoir engineering and well technology; Exploration data contouring, mapping and interpretation; and Pricing and competition and price risk management in the petroleum, oil and gas industry. In the medium-to-long term, NEI will develop laboratories with pilot plant facilities for research and demonstration. NEI will, therefore, undertake a focused technical work programme that comprises original independent research and investigations, technical responses to legislation and regulation, workshops and seminars, to provide the

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Chapter 9 | Training local and international industry with information and guidance on relevant technical issues. Although some of this work will be externally funded, a significant proportion is achieved through the paid services such as training, testing and technical advisory services. Namibia is extensively exploring for petroleum products offshore and to a limited extent on shore. The basis of robust petroleum exploration is the vast gas reserves, namely Kudu, on Namibia’s coastline. Mega projects such as the Kudu Power Station are currently being considered to utilize the huge gas reserves for the country’s economic development. Liquid petroleum products are widely used in Namibia’s transport sector while the use of gas is still limited. Distribution channels for liquid petroleum in all urban centres are well developed and sparsely established in rural areas. Upstream petroleum and gas industry, also called the exploration and production sector, involves the searching for potential underground or underwater oil and gas fields, drilling of exploratory wells, and subsequently operating the wells that recover and bring the product to the surface. Downstream industry involves the refining and processing of the product, trading and distribution of the product and its derivatives such liquid petroleum gas, petrol, jet fuel, diesel, petroleum coke, etc. MME is responsible for the policy and regulation of the industry. Downstream gas industry is, unfortunately, not regulated yet. There are currently no institutions in Namibia and sub-Saharan Africa that are dedicated to providing for the capacity buildings needs of the petroleum and gas sector, save for some general engineering programmes in various tertiary education institutions. The sector relies mainly on expatriate skills.

Mandate The Centre for Oil and Gas (COG) will aim to promote and assist the development of a robust internationally competitive Namibian petroleum and gas products industry that operates efficiently, economically and safely in harmony with the environment and community standards. In fulfilment of this mandate, the Centre will amongst other things: • Undertake R&D work in petroleum and gas drilling, natural gas distribution, petrochemicals, and utilisation of petroleum products for developing state-of-the-art petroleum and gas derivatives. • Train personnel for exploration, drilling, production and distribution companies, regulatory bodies, hydrocarbon and related industry. • Conduct market demand and supply surveys and technoeconomic feasibility studies for petroleum and gas products. • Assist NSI in formulation of specifications for petroleum and gas products. • Provide technical support and technological services to production, distribution and related industries. • Assist the petroleum and gas industry in absorption, adoption and selection of technologies. • Provide a key link between industry and government to promote awareness and understanding of the petroleum and gas and products industry as well as encourage and influence supportive policies and programs.

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• Promote industry regulation through development and promulgation of industry standards, codes of practice, training and accreditation programs, seminars and conferences. • Inform society about policies and activities relating to the industry and its significance to the national economy.

Key Stakeholders Key stakeholders for the Centre include; • MME • Petroleum Education and Training Fund (Petro Fund) • NAMCOR • Namibia Energy Regulator (currently under formulation)

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• Companies engaged in the exploration, drilling, production, marketing and/or distribution and possibly refining of petroleum and gas products.

Technical Advisory Services and Training Technical advisory services are required in testing and evaluation of fuels and oils for emission type approval, octane and cetane rating of petrol/diesel fuel and rating of engine components will also be provided. COG will provide engine oil qualification certificates against NSI specifications. The Centre shall assist NSI in formulating standards for petroleum and gas products, equipments and devices that use these products. The upstream Namibian petroleum and gas industry is relatively still at infancy. Thus, the industry is not spared of shortages in appropriate skills and expertise. Training is an important aspect of the management function in a rapidly changing economic and social environment. The industry therefore requires adequate and appropriate training to personnel already in the industry and young graduates coming into the system. Some of the courses that are going to be offered to the industry on short term basis include: • Exploration and production of oil and gas: technical and commercial perspectives

Strategic Focus

• Oil and gas industry fundamentals • Reservoir engineering and well technology

The Centre will have strong infrastructural support for R&D activities and state-of-the-art facilities for analysis, evaluation and testing of crude oil and gas, petroleum products, chemicals and catalysts. It shall also offer technical assistance to the industry. Chemical analysis by state-of-the-art equipment and performance evaluation of petroleum products will be conducted on standard engines. Lubricating oil, fuel saving additives and devices will be evaluated by field trials. The Centre will conduct specialized training programmes for technical and non technical personnel from policy and regulatory side, drilling companies, petrochemical plants, automotive industry and power plants. In order to do that, the Centre will have dedicated experienced and qualified staff and shall be equipped with comprehensive state-ofart R&D facilities.

• Exploration data contouring, mapping and interpretation • Managing risks and strategic decisions in petroleum and gas exploration and production • International upstream petroleum fiscal designs and sustainable agreements • Economic analysis of natural gas supply chain • Economics and trading of the oil supply chain • Strategic portfolio management of oil and gas assets • Pricing and competition and price risk management in the oil and gas industry

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Chapter 9 | Training • Acquiring and divesting oil and gas assets and companies • Shale gas and other unconventional petroleum resources • Oil and gas project and operations management.

Key stakeholders Strategic partners in the RE sector include; • Ministry of Mines and Energy

Centre for Renewable Energy and Energy Efficiency

• Renewable Energy Industry Association of Namibia • Electricity Control Board

The CREEE is a continuation of the work done by the Renewable Energy and Energy Efficiency Institute (REEEI) on RE technologies and their use, EE practices, policy and regulation development and climate change mitigation studies.

• NamPower

The White Paper on Energy Policy (1998) explicitly states that the “Government will promote the use of renewable energy through the establishment of an adequate institutional and planning framework, the development of human resources and public awareness and suitable financing systems”. It is against this background that REEEI was established to fulfil that role on behalf of the Government. REEEI has been very active in advancing sustainable energy by way of implementing programmes and projects in partnership with national and international partners. Some of the programmes/projects include the following:

• Namibian Standards Institution (NSI)

Namibia Energy Efficiency Programme in Buildings (NEEP) funded by the Global Environment Facility (GEF) and the United Nations Development Programme (UNDP).

Piloting Concentrating Solar Power and Technology Transfer for Electricity Generation in Namibia (CSP TT NAM) funded by GEF and UNDP.

Solar Thermal Training and Demonstration Initiative (SOLTRAIN) - supported by the Austrian Development Agency.

National Wind Resource Assessment Project in partnership with NamPower, MTC and Energy and Environment Partnership for Southern and East Africa (EEP S&A).

Namibia Energy Regulatory Framework, which is financially supported by the Renewable Energy and Energy Efficiency Partnership (REEEP).

• Development partners • Independent Power Producers (IPPs)

Strategic Focus CREEE will extend the current work of REEEI on RE technologies, EE practice and use, policy and regulation development and climate change mitigation studies. Namibia has enormous RE resources in the form of solar, wind and biomass. These resources, however, continue to make insignificant contributions to the overall energy economy. CREEE will explore ways to break the barriers associated with wide adoption and use RE and EE. Technical Advisory Service and Training The local RE industry and consumers demand that products coming into the Namibian market are tested for quality performance. The performance testing of these products and technical advice offered is best done by a neutral body such as CREEE. The Centre will test products such as solar waters and photovoltaic systems, amongst other RE technologies on behalf of NSI, government and private companies. In the same vein, CREEE will continue to lead the development, adoption and promotion of RE quality standards through NSI. CREEE will continue to identify the RE & EE industry needs and other opportunities including continuous professional development and promote them directly or indirectly with support from different stakeholders. The Centre will help develop RE and EE curriculum in the education and training sector to align them with global trends. The main beneficiaries or target customers for CREEE’s expertise include the Government, ECB, NamPower, the regional electricity distributors (REDs), municipalities and private –and public companies.

Development and promotion of renewable energy quality standards with the Namibian Standards Institution.

Renewable Energy and Energy Efficiency Capacity Building Programme (REEECAP) with support from the Royal Danish Government. .

Projects

Various short training programmes.

Namibia Energy Efficiency Programme

New Mandate The Centre for Renewable Energy and Energy Efficiency (CREEE) will take over all the roles and responsibilities of REEEI. The roles include, to; 1.

Facilitate and conduct research into RE and EE,

Develop materials and standards, reports and disseminate information and materials on RE and EE, and

Facilitate cooperation between MME and key stakeholders responsible for RE and EE

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Project Description The Namibia Energy Efficiency Programme in Buildings (NEEP) is a new project co-funded by the Global Environment Facility (GEF) through the implementation support of the United Nations Development Programme (UNDP) under the Framework for Promoting Low Greenhouse Gases. The 3 year project is being implemented by the Ministry of Mines and Energy and the Renewable Energy and Energy Efficiency Institute (REEEI) at the Polytechnic of Namibia. Overall, NEEP is set against a background of rising electricity consumption in Namibia and power deficit in South Africa, the country’s main supplier. In Namibia, the subsequent threat to the country’s economic growth, and the vulnerability to developments in South Africa, contrasts with the limited application of energy-efficient measures and technologies. Indeed, local authorities, including the regional electricity distributors (REDs) are the largest single electricity consumers with the domestic/

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The above and other projects/programmes have been implemented in partnership with and/or with full support from MME. REEEI is also coordinating the implementation of MME’s Off-grid Energisation Master Plan (OGEMP).

Chapter 9 | Training residential sector accounting for almost 50% of that portion. Buildings often present a cost-effective green house gas (GHG) emission reduction option. In the historical legacy between Namibia and South Africa, Namibia has taken over most of South Africa’s energy-inefficient mind-set, technologies, applications and regulations as well as the general lack of awareness regarding the cost advantages of energyefficient technologies and equipment. Project Objective The entirety of buildings in Namibia releases each year a significant amount of GHG in the air. GHG emissions are the most significant cause of climate change which means that saving energy in Namibian commercial and residential buildings is one of the most important things that can be done to fight climate change. The project’s objective is therefore the reduction of Namibia’s energy-related GHG emissions through the promotion of nationwide adoption of energy-efficient technologies and practices in the commercial and residential buildings such as government office buildings, hospitals, hotels, schools and possibly a sample of residential buildings. This would be achieved through a series of key activities: Firstly, the development of improved regulations (standards and labelling of building appliances) and adoption of building codes for energy savings. This would lead to an improved policy framework for energy efficiency (EE) in buildings, including an updated list of recommended appliances and materials to be used in the building sector subject to tax and duty reductions. Secondly, the provision of auditing and energy marketing services would stimulate the demand and supply of EE services and technology, particularly through the introduction of mandatory audits in public and commercial buildings.

technologies and appliances that utilize renewable energy and energy efficiency. The energy shops would also serve as payment collection centres for a national off-grid energy financing mechanism - thus working hand in hand with the Solar Revolving Fund (SRF) administrator. It is envisaged that each region will one energy shop in the first year of implementation. Energy regulatory framework for Namibia Funded by United Kingdom Programme sector Renewable Energy & Energy Efficiency Programme component Regulation Background Namibia imports more than 50% of its electricity imports from neighbouring countries: South Africa, Zimbabwe, and the Southern African Power Pool. Electricity is mainly derived from fossil fuels, and all petroleum products are imported, so the security of energy supply is vulnerable. To reduce the reliance on imports, Namibia is incorporating renewable energy into its short to long term development planning, and is aiming to develop a comprehensive set of regulations and acts, including a Namibia Energy Regulatory Framework, a Renewable Energy Act and an overall Energy Efficiency Act. Project purpose To assist the key energy stakeholders in Namibia in creating a comprehensive new energy regulation framework for the country which takes into account the promotion of renewables and energy efficiency, and facilitates fair market access, return on investment, quality of supply, standards, market support structures and incentives. Main activities and outputs □ Undertake macro-economic analysis of energy generation options for Namibia, recommend renewable energy targets • Design elements of the envisaged Renewable Energy Act, including the best regulatory and support mechanisms (quotas or feed-in-tariffs) to support RE generation

Thirdly, the strengthening of institutional capacity and awareness on EE in buildings that would further contribute to the adoption of EE technologies and best practices.

• Recommend which institutions to be mandated to administer specific acts, laws and provisions of the framework

ENERGY SHOP ROLL-OUT IN NAMIBIA

• Propose financial incentive structures for renewable energy and energy efficiency, including tax incentives, rate structures and efficiency incentives

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Project Description The energy shop model was conceptualised as one of the models to be followed in the implementation of the Off-Grid Energisation Master Plan (OGEMP) of the Ministry of Mines and Energy in 2007. In providing access to energy, the OGEMP puts un-electrified areas into three categories; off-grid, pre-grid, and grey areas. According to the Regional Electricity Distribution Master Plan (REDMP), Off-grid areas are those areas that will not have access to electricity within 20 years. Pre-grid areas are those that would not have access to electricity within 5 years. Grey areas are locations where it is not clear in the 2005 REDMP how or if access to electricity will be provided The OGEMP will focus on off-grid and pre- grid area. However, the OGEMP will only focus on providing access to pre-grid areas that would not have access to electricity within 10 years in the updated REDMP GIS database. Examples of grey areas include;

• Identify and establish technology and performance standards including certification schemes, interconnection standards, RE and EE building codes and appliance labelling schemes • Hold stakeholder consultations in policy formulation and develop training • Establish energy information clearing house, devise an educational and information campaign Expected impacts • renewable energy and energy efficiency fully integrated into the new Namibian energy framework

1) Informal settlements -where the majority of the inhabitants either do not have access to electricity or clearly cannot afford it, and

• Creation of a favourable climate for large-scale investment in renewable energy and energy efficiency,

2) Farm worker settlements on commercial farms – although the farm owner may have access to electricity, the farm worker families most often do not. The OGEMP will focus on providing informal settlements with access to energy.

• Reduced greenhouse gas emissions and increased energy efficiency • Employment growth in clean industries and increased energy security

ENERGY SHOP APPROACH The OGEMP will provide access to energy through an Energy Shop approach. The plan is to establish energy shops within a reasonable distance of the targeted communities. The energy shops would sell suitable, approved energy products and compatible appliances modelled as energy baskets. Emphasis would be placed on energy

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A heart for Namibia. A head for business. Now a strategic business anchor in Walvis Bay

Audit • Advisory • Tax • Consulting

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Chapter 8 | Energy

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Renewable Energy Technologies Financing

The Ministry of Mines and Energy (MME) is the sole administrator of the Solar Revolving Fund (SRF). The SRF is a credit facility established by MME to stimulate demand for the utilization of renewable energy technologies in the rural areas, especially for communities living in offgrid areas, but also to urban clients.

Who can apply for the SRF loan?

The SRF is the element of the Off-Grid Energisation Master Plan for Namibia (OGEMP) whose objective is to provide access to appropriate energy technologies to rural areas.

How does the SRF operate? The SRF runs on an ownership model where individuals obtain loans to purchase Renewable Energy Technology products by obtaining a detailed quotation from the accredited Energy Services Providers to install the technology at the area of choice.

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Applicant must be a Namibian Citizen, age 21-55.

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Any person with an active bank account into which his/her monthly or regular income is paid and with a clean credit record. Credit references will be verified with Trans Union and CompuScan

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Any person who can prove 2 years of employment with the same employer/ same line of employment.

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A pensioner with a regular income e.g Farmer/ having a business, able to pay 30% deposit of total loan.

Chapter 8 | Energy Loan Criteria •

Maximum loan amount: N$ 50,000 for Solar Water Pump, N$6,000- N$ 35,000 for Solar Home System, N$30,000 for Solar Water Heaters. Solar Cookers/Stoves, will be financed as a lumpsum with Solar Home Systems.

•

Loan amount must not exceed a third of the applicants’s annual gross income.

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The loan can be repaid via debt order and payroll deduction. Only 5% interest is charged over the loan period of 60 months

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SRF has a pre-qualified list of registered Energy Service Providers approved by the National Technical Committee on Renewable Energy (NTCRE) which can be obtained from the SRF Office at the Ministry of Mines and Energy.

Application Process Application forms can be obtained from the Ministry of Mines and Energy, Local Energy Shops, Energy Service Provider and at all Regional Offices, and can be download from the MME website. Submit the completed application form together with a certified copy of your ID and latest pay slip or proof of income. You are also required to provide quotation from accredited Energy Service Provider. The application will be assessed, if successful you will be informed in writing as well as telephonically or contacted via an Energy Service Provider to deposit 5% of quoted price and fax proof of payment to the head office.

General Information

a certified death certificate is submitted to the Ministry.

Take Note: Failure to repay the loan will result in terminating insurance benefits from the Ministry. Cancellation Fee: Clients will be charged cancellation fee, 15% of total deposit received, upon cancelling their loans with the fund. After Sales Services and Warranty: There is limited maintenance of solar systems once installed properly. However, after sales service and warranty will be provided by your Energy Service Provider. The Ministry will provide you with the EndUser Guide on how to take care of your system and what to do in case of emergency. The Ministry will not be held liable for malfunctioning systems.

Take Note: Discuss and agree on a guarantee/ warranty lasting at least 1 year from the day of installation of your solar system with your Energy Service provider. The SRF does not give any guarantee or warranty to the borrower in relation to the loan.

System Installation: Once the deposit is confirmed with the bank, SRF will issue a purchase order to your Energy Service Provider of choice to arrange for the system delivery and installation at your address indicated on the application form within 14 days. You are requested to sign the installation report, to prove that you have received the system as per quotation and to signify that you are satisfied with the installation and the system is operational. Do not sign the installation report if your system is not installed or not working. Installation Verification: The Ministry will conduct a installation verification to ensure that your system was installed. This is a once off activity, and will be done one or two months after installation. Payment: Once the loan is granted to you, you will start paying the loan upon your certification. You will be responsible to honour the monthly instalments until full payment of the loan through debit order. Loan Defaulting: Failure to make monthly payment will result in the outstanding balance becoming due and payable immediately. A 5% interest rate will be levied on any overdue amount in respect of any period (s).

Arrears and /or default in instalments for three consecutive months may result in legal proceeding or backlisting on Trans Union (ITC) Insurance: Insurance is provided by the Ministry of Mines and Energy. Insurance covers only “Acts of God’’, such as lighting, Flood or hail, wind as well as damage caused by animals. Theft is not covered. An excess fee is payable by the borrower on any claim made out to the insurer. Applicants can obtain claim forms from the Loan Officer and should be submitted within 3 months after the damage. Client should provide a quotation and statement made under oath from the nearest police station. In case of death, the remaining balance of the loan is written off and the system becomes a property of the deceased’s family, provided that

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Take Note:

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Chapter 9 | Training

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Chapter 9 | Training

Chapter 9 Training

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Chapter 9 | Training

YEARS NAMIBIA and NIMT

(A memorable achievement and partnership since 1990)

s an independence gift to Namibia, Rio Tinto Zinc International paid for the establishment of the Namibian Institute of Mining and Technology, to train young Namibians in the technical skills required by the Namibian mining, engineering and other industries. From humble beginnings (14 trainees and 8 employees) the expansion of the NIMT progressed as follows: 1990: NIMT Engineering Trades (NET), Arandis, Phase one.

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1997: European Union funded extension â&#x20AC;&#x201C; Phase two â&#x20AC;&#x201C; of NET, doubling training and lecturing facilities. NET is training six trades.

1999: On request of the then honorable Minister of Education, Nahas Angula, NIMT Building and Civil Trades (NBCT), Arandis, became the first satellite campus. NBCT is training 4 trades. 2007: In August 2007 the NIMT Northern Campus (NNC), Tsumeb, on request and with support of the Chamber of Mines of Namibia, opened its doors and is currently training 6 trades. 2009: In March 2009 the NIMT Southern Campus (NSC), Keetmanshoop, on request of his Excellency, president Pohamba and with support of the CoM of Namibia as well as the GRN, opened its doors and is currently training 5 trades.

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Currently the NIMT has 232 employees and ±4000 trainees. This achievement is a tribute to the continuous commitment and vast experience of the Executive Director, Mr EDG Mueller and his team, as well as the unwavering trust and support of the Namibian Government and the Namibian industry throughout the past 25 years. Training is presently provided in: • Fitting & Turning (including Machining): Arandis, Tsumeb and Keetmanshoop

Mr EDG Muelle

• Boilermaking/Plating/Welding: Arandis, Tsumeb and Keetmanshoop • Diesel-/Petrol Mechanics: Arandis, Tsumeb and Keetmanshoop

• Plumbing/Sheetmetalwork: Arandis only

• Electrical: Arandis, Tsumeb and Keetmanshoop

• Refrigeration/Air-conditioning: Arandis only

• Instrumentation: Arandis only

• Clothing Production: Arandis only

• Bricklaying/Plastering: Arandis and Keetmanshoop

• Millwright (Electrical) - Tsumeb only

• Carpentry/Joinery: Arandis only

• Autotronics - Tsumeb only

Skills-upgrading training for long term employees and vocational only training for early school leavers (1 year course) are also available. The Apprenticeship/Vocational Training is conducted over four years: 1st – 3rd year Maximum of six months in the institute, six months in industry (on-the-job¬-training/job attachment). 4th year 10 months in industry and two months at the Institute for final trade upgrading. For more information go to our website: www.nimtnamibia.com

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Daily tuition - up to the Namibian Technical Certificate, Level III – is conducted in Mathematics, Engineering/Building Science, Engineering/ Building/ Structural Steel Drawing, Industrial Electronics and applicable Trade Theory. Supplementary subjects, which are conducted once a week, are: First Aid course; Safety, Health & Environment Courses; Computer Practice; English Communication Skills and Entrepreneurial Skills.

Chapter 9 | TrainingFOCUS ON CORPORATE PRACTICE DUNDEE PRECIOUS METALS TSUMEB COMMUNITY TRUST CREATING OPPORTUNITIES FOR OUR COMMUNITIES

SME owners who recently received grants to improve their businesses.

The Tsumeb Community Trust was established in 2010 as a Corporate Social Investment (CSI) vehicle for Namibia Custom Smelters which later was renamed Dundee Precious Metals Tsumeb. The Trust’s purpose and objective is to develop programmes and projects that support socio-economic development of the Tsumeb community, Oshikoto Region and the broader Namibia. Emphasis for development is directed at the underprivileged, while the focus for funding is on education-related projects, community health initiatives, social upliftment and empowerment and SME development. Education Dundee Precious Metals Tsumeb Community Trust believes that education is the most effective tool to empower Namibians and fight poverty. By investing in education, the Trust is putting in place the correct building blocks to increase the economically active sector of the population. Since its inception, the Trust has responded to the needs of at least 22 schools spending nearly N$4 million in the process. A big portion of its education spend has been invested on development of important infrastructure mostly construction and renovations of classrooms. Notable contribution include construction of two classrooms at Nomtsoub Primary School, construction of three classrooms at. Ludwigshaven Junior Primary School. The Trust also made upgrades at Galton Primary School and Huigub Primary School worth N$ 70 000 and N$197 000 respectively. A gate and fence was erected at St Francis Primary School and Ondundu Primary School SME Development SMEs contribute to the economy through employment creation. Giving them financial support uplifts their socio-

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MINERAL AND ENERGY GUIDE NAMIBIA

DUNDEE PRECIOUS METALS

Three classrooms were erected at Ludwigshaven Junior Primary School

Renovations/upgrading at the Hope Children’s Centre

Oscar Norich Stadium upgrading and renovations

economic status of marginalized beneficiaries. The Trust provides grant funding to these budding business men and business women. Since its inception, the Tsumeb Community Trust has supported 72 SMEs with micro grants that range from N$5000 to N$73000 aimed at strengthening their capacity. The Trusts’ SME micro-financing is structured in a way that offers maximum flexibility to its recipients. Interest-free grants are awarded to qualified SMEs, as determined by a screening and application process developed on our behalf by the Tsumeb branch of the Namibia Chamber of Commerce and Industry, (NCCI) who also administer and monitor the financing. There is a requirement to repay only 10% of the grant within two years and this repaid amount is pooled and used to develop and deliver business education courses and workshops to our grant recipients. There is no obligation to repay the remaining 90% of the grant. Social Welfare The Trust supports social upliftment of the Tsumeb community by providing financial and material support to charitable organisations, including but not limited to old age homes and support centres for destitute children. The trust invested N$400,000 towards the upgrading and renovations of the Oscar Norich Stadium. Other projects supported include SOS Children’s Village Community Project N$69 025 for purchase of IT Equipment; Hope Children’s Centre N$178 808 for renovations; Nomtsoub Old Age Home N$26 523.13 for solar geysers; Shack Dwellers N$129 426.74 for building equipment , TOV Multipurpose Centre N$ 35 000 for a cold room; N$ 138 000 for Ondundu School feeding project,

Dundee Precious Metals Tsumeb Community Trust P.O Box 936 Tsumeb, Namibia Phone: 067 223 4703 Fax: 067 223 4719 184

Chapter 9 | Training

Ondundu Primary School is one of the 22 schools that benefited from Dundee Precious Metals Tsumeb Community Trust’s investment in education. Our commitment to social development is helping to brighten the future of many students in Tsumeb.

“We succeed because we care” Tsumeb Community Trust CSI Spend

“We succeed because we care” is Dundee Precious Metal’s Brand Promise and guides our behaviours as individuals and as a Company. It builds on our mission and our vision.

Total Value of TCT grants disbursed, 2011 to 2014

“We” signifies how we view our partnerships with our foundational stakeholders: employees, investors, local communities and governments. “Succeed” speaks to how we can achieve success together through the power of our partnerships.

Year 2011 2012 2013 2014

Total Spend N$1,496,847.27 N$1,749,369.84 N$ 253,286.19 N$2,682,957.63

Total

N$6,182,460.93

% of Budget Granted

71.16 70.01 8.79 91.47 60.36

Total Value of TCT grants disbursed, 2011 to 2014 2.1% 3.7% General Costs Arts & Culture

SME Development

Education

25.5% 59.6% 9.1%

Social Welfare

Armenia 185

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dundeeprecious.com

Namibia

MINERAL AND ENERGY GUIDE NAMIBIA

“Care” encompasses all that we stand for, especially our core values.

Proud to be Chapter 9 | Training

a main sponsor of the

MINERAL AND ENERGY GUIDE NAMIBIA

Copper is the economic backbone of Tsumeb

Community Investment strengthens the social economic fabric of Tsumeb

Celebrating Five Successful Years

Armenia

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d u nd e e p r e c i o us. com

Bulgaria

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Namibia

Chapter 9 | Training STATE OF THE ART ACID PLANT, AT DUNDEE PRECIOUS METALS

Ac offici id Plant all early y openin g next y e ar - 201 6

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MINERAL AND ENERGY GUIDE NAMIBIA

PROMOTING SUSTAINABILITY GROWTH AND ENVIRONMENTAL RESPONSIBILIT Y

Chapter 9 | Training

SOUTHERN CAMPUS

Keetmanshoop

“As an aspirant and emerging economy Namibia must endeavour to increase skilled workforce, competent managers, innovative entrepreneurs and visionary business leaders” Dr Erold Naomab (BSc, MSc, MRes, PhD) Southern Campus Coordinating Director

University of Namibia Southern Campus value proposition is to: • Contribute towards national capacity building and skills development, especially in the highlevel technical and professional scopes, (such as geologist, teachers, health professionals and agri-businesses) • Improve regional productivity • Promote long-term industrialization and industrial diversification • Offer various technology transfer initiative thereby creating a positive impact on economic growth and poverty reduction

Health Sciences: Nursing and Public Health • Nursing (Clinical) Education • Teacher Education (Junior Primary Phase)

Research and Development Agenda • Thought leader in Research, Innovation and Training; Translation of Research and Innovation into Corporate and Social Solutions

Geosciences R&D Focus: • • • • •

Academic Focal Areas

MINERAL AND ENERGY GUIDE NAMIBIA

The Southern Campus operates as a modern multi-functional campus not only improving access to higher education but also accelerating human resource capacity in line with national imperatives (Vision 2030)

Sustainable and Diversified Energy Resources Water Resources Management Geological Surveys Exploration Mining beneficiation and value Addition

R&D Focus of the regional innovation and technology transfer hub • Improve technology receptiveness and adaptation • Improve absorptive capacities • Increase entrepreneurship • Poverty Reduction through inclusive innovation • Agribusiness and Food Security • Accelerate Poverty Reduction via Entrepreneurship and SME development • Advocacy for Indigenous Knowledge Systems (IKS) improvement and management • Advocacy for public service excellence

Geosciences • Environmental and Hydrology • Exploration & Economic Geology • Petrology & Mineralogy • Geophysics Economic Management Sciences • Management Sciences: Business Administration • Entrepreneurship and New Venture Management

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( +264-63 220 2000 s www.unam.edu.na

Chapter 9 | Training •

Career Prospects in Mines and Energy

• • •

Being responsible and able to justify our decisions and actions; Being creative in response to issues that impact on our business; Treating our customers with the necessary respect; Delivering a professional service at all times. Geophysicist Requirements: Grade 12 with Physical Science and Maths Qualification: B. Science Honours Geophysics or B .Science Honours in relevant subjects with 3 years’ experience

• •

Skills &Competencies: Conduct and interpret Geological Surveys for Regional Geological Mapping, for exploration and evaluation of deposit Assist in land use plan and for engineering as well as Geotechnical studies Mineral/Energy Economist Requirements: Grade 12 with Physical Science, Maths & Economics

By promoting, facilitating and regulating the responsible development and sustainable utilization of Namibia’s mineral, geological and energy resources through competent staff, innovation, research and stakeholder collaboration in a conducive environment for the benefit of all Namibians. Inn doing our work we focus on the needs of those we provide a service. This approach builds on our key values of: • Providing equal opportunity and treatment in timeous service delivery; • Publishing information on procedures and performance standards we aim to meet;

Qualification: Appropriate 4 years Science Degree

MINERAL AND ENERGY GUIDE NAMIBIA

• • •

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Skills &Competencies: Monitor and promote the metallic industry Provide mineral input to the industry Feasibility studies on proposed mines, defunct mines or mines threatened with closure

Chapter 9 | Training Geochemist Requirements: Grade 12 with Physical Science &Maths

Provide Demand Forecasting, Energy Pricing and Project planning and analysis Energy Inspector Requirements: Grade 12 with Physical Science and Maths

Qualification: Appropriate Science Degree in Geology, Chemistry or Geochemistry

Qualifications: Appropriate Diploma or Science Degree • • •

Skills &Competencies Undertake Health, Safety and Environment audits to ensure operator compliance with statutory requirements Consulting with energy sector participants and other stakeholders Analysing and evaluating the impact of Health, Safety and Environment policy &Regulations on Service Delivery

• • • •

Cartographer Requirements: Grade 12 with Physical Science & Maths

Energy Researcher Requirements: Grade 12 with Physical Science, Maths&Economics

Qualification: Appropriate Diploma or Technicians Certificate

Qualification: Appropriate B Econ or Science Degree in Chemical Engineering • • •

Skills &Competencies: To provide in-house capacity in the promotion and exploitation of Namibia’s petroleum resources Promoting and co-ordinating the development and deregulation of Namibian liquid fuels industry. In addition promotes natural gas utilization in the Namibian economy Metallurgical Engineer Requirements: Grade 12 with Physical Science &Maths Qualification: Appropriate B. Science Degree in Engineering or other technical discipline

• • •

Energy Engineer: Petroleum Requirements: Grade 12 with Physical Science &Maths Qualification: Appropriate Diploma or B. Science Degree in Metallurgy • • •

Skills &Competencies: To assist in the development of the small scale mining section as well as rendering technical services, metallurgical or mineral processing expertise to the Mines Directorate Co-ordinating studies by consultants on mining and beneficiations Rehabilitation and environmental issues/activities and pollution control &identification

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• • •

Skills and Competencies: Ensuring that mining operations in Namibia are conducted in a safe and healthy manner and in accordance with mining Act and Regulations Monitoring the distribution ,storage and use of explosive on mines Advising smaller mines with regards to safe mining carrying out special investigations. The Ministry of Mines and Energy was established to act as a custodian of Namibia’s rich endowment of mineral and energy resources and to create an environment in which the mineral and energy sectors could prosper by ensuring that the mineral, geological and energy resources of Namibia are developed and utilized and in a suitable manner for the maximum advantage of the country and her citizens, while promoting our natural wealth. The Ministry, since independence, has been engaged in activities that have a significant and far-reaching impact on the overall national economy. As one of the technical ministries, this positive impact on the national economy can only be maintained through the dedicated involvement of professionals such as geologists, geophysicists, mining and electrical engineers, metallurgists, geotechnicians, energy and mineral researchers, economists and accountants. This brochure serves as a primer on the educational and professional requirements needed to pursue a career as a professional in the mines and energy sector. Ministry of Mines and Energy 6 Aviation Road Private Bag 13297 WINDHOEK Tel:+264 61 284 81111 Fax: +264 61 284 8380 E-mail:info@mme.gov.na Web:www.mme.gov.na

MINERAL AND ENERGY GUIDE NAMIBIA

Skills &Competencies: To support the effective production and management of Namibia’s energy resources with particular emphasis on petroleum Reviewing the liquid fuels product specifications globally and promoting the use of petroleum products with international specification Ensuring that policy making, regulatory oversight and industry operations are separated to level the playing field between state enterprises and private sector competitors

Skills &Competencies: To provide an analytical and sample preparation service for both government and private sector geological investigations o provide information on mineral occurrences as well as regional geological trends Geochemical research and work Conducting analytical work using electronic equipment(ICP,XRF,XRD)

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Chapter 10 Legislation

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MINERAL AND ENERGY GUIDE NAMIBIA

Air Namibia, among Africa’s finest

amibia commands first class transport infrastructure. Ranked consistently in the TOP 10 out of over 410 airlines in 2014, Air Namibia (Pty) Ltd is the national airline of Namibia, has been flying since 1946 and has become a strong and viable airline with undented safety record. Air Namibia fully complements the country’s transport sector by offering a premium product and by being a World 3 star airline. Our ultimate goal is to be a 5 star airline. The mandate of Air Namibia is to attract and promote tourism by providing air transport connections into and out of Namibia and operating flights within Namibia.

•

The Purpose for its establishment: Institution of strategic importance in; • Tourism development, • Facilitation of trade (imports, exports), and • Creating air linkages with relevant parts of the world.

The goal of the Namibian Government, as the sole Shareholder of the airline, is to have an entity that achieves both consistent commercial successes whilst making a contribution to the economic development of Namibia. Some of the notable strides are:-

Tourism is a thriving and is the fastest growing sector in the country and region. Air Namibia is enabling this sector to thrive; therefore the national carrier is indeed a catalyst for development.

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Chapter 10 | Legislation We have been successful in facilitating economic developments through enhanced air transport connections and diversifying trade relationships between Namibia and its trading partners.

•

Outstanding Safety record and compliance,

•

Excellent Dispatch reliability reports,

•

Improved operating margins,

•

Increased foreign traffic arrivals,

•

Increased domestic traffic departures,

•

Jobs created (direct, indirect and) => contribution to NDP4 Objectives

We are driven by and follow opportunities where they present themselves with the singular aim to meet customers’ expectations and to fulfil our mandate, this is by growing potential for direct flights between Namibia, our neighbours in Southern Africa and the world, which will open up cultural exchange programs and foster integration.

•

Airline spend in the Namibian Economy => contribution to GDP

With the adoption of the new business plan in 2011, we aligned our mission statement, to reflect our core purpose and direction:

•

Visitor spend in Namibia – airfare => contribution to GDP

•

Visitor spend in Namibia for services => contribution to GDP

“…A safe, reliable and profitable airline – helping tourism to thrive and encouraging business investment in Namibia”.

The overriding objective of what we are doing here today forms part of our 2011 to 2016 Business Plan, which is to turn Air Namibia into a profitable airline and to equip the airline to become a sustainable business in the long term. Our Business Plan is organised around five strategic themes; •

Build a strong business – network & fleet

•

Improve Operational integrity

•

Become truly customer focused

•

Commercially nimble and pro-active

•

Improve employee productivity

Going forward, we are working on building a strong business, which has operational integrity and which is truly customer focused. Air Namibia is busy positioning itself to be one of Africa’s finest airlines. To achieve this objective, the airline has already started streamlining and rationalizing its operations. What is visible to the public today, are signals of a changing business model and strategy. These changes are a foundation for a sustainable future. The streamlining process involved huge investment by the Shareholder in acquiring newer generation aircraft that have replaced the aged fleet. This project was completed successfully and timeously-and THIS IS THE SECRET RECIPE OF THE SUCCESS STORY OF AIR NAMIBIA TODAY.

MINERAL AND ENERGY GUIDE NAMIBIA

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Chapter 10 | Legislation The new fleet has brought stability in the operation due to high level of dispatch reliability. We are therefore happy to confirm that all initiatives as encapsulated in the business strategy have been implemented where successfully, to the letter and spirit. We have introduced an optimised schedule and route network, which projects growth. Air Namibia needs to grow in order for it to remain sustainable. Any business organization that does not identify opportunities for growth is unlikely to survive, given the trends in todays’ highly competitive airline business environments

Value Preposition k Dispatch reliability (On-Time Performance departures/ arrivals) k Competitive fares, which translate into “best value money can buy” k Competitive schedule, convenience departure & arrival times, k

Optimum connecting times for onward traffic.

Excellent Safety record

k In 2014 Air Namibia scooped feather awards for both Johannesburg and Cape Town respectively. Further to that Air Namibia’s pilots scooped awards for Excellent Service delivery from the Namibian Business Hall of Fame

BGO

EDI

AMS BHX

To North America and beyond

FMO LHR

BRU

CPH

DUS

LYS BIO

TLS BCN

OPO LIS

LIN

MUC

Air Namibia’s significant role is creating air transport linkages between Namibia and the world. This role is instrumental in the attraction of tourism and business traffic to Namibia. Hence, Air Namibia remains the best provider of air transport into and out of Namibia, as well as between key towns and cities within Namibia such as Walvis Bay, Ondangwa, Rundu, Katima Mulilo, Oranjemund and Luderitz). Southern Africa: Our coverage of Southern African cities is comprehensive, with direct Air Namibia flights operated between Windhoek and Walvis Bay, Lusaka, Maun, Victoria Falls, Cape Town,

GOJ

DME

KUF

KTW KRK

KBP

To Asia and beyond

VIE BUD

GRZ VCE BLQ

SOF

FCO

IST

NAP

MAD

ATH

FAO MLA

MINERAL AND ENERGY GUIDE NAMIBIA

Air Namibia obtained its approval as aircraft maintenance Organization (AMO) offering in-house aircraft maintenance, unlike previously when all maintenance was outsourced at costly rates, thus increasing maintenance cost. We now have full capability for maintaining the Brazilian made Embraer ERJ 135 fleet. Next in line is to include the Airbus fleet in the foreseeable future. This means job creation for local aircraft maintenance technicians and prospective students/apprentice who want to venture into Aircraft Engineering related studies.

VKO

VNO

HAJ DRS LEJ FRA PRG NUE

ZRH GVA MXP TRN NCN

Ploughing Back

WAW

POZ

TXL

STR CDG

LED

TLL RIX

HAM BRE

MAN

DUB

ARN

GOT

BLL

Our record for on-time departures has improved to over 95%, compared to world average = 90% during the last 21 months,

HEL

OSL SVG ABZ

k Direct flights between Walvis Bay to Cape Town and Walvis Bay to Johannesburg were introduced earlier this year, to ease and optimize connectivity for passengers.

LCA

Through interline agreements with our partner airlines, Air Namibia helps you reach your final destination almost anywhere in the world ABZ - Aberdeen, United Kingdom | Aberdeen Dyce Airport AMS - Amsterdam, Netherlands | Amsterdam Schiphol Airport ARN - Stockholm, Sweden | Stockholm-Arlanda Airport ATH - Athens, Greece | Eleftherios Venizelos International Airport BCN- Barcelona, Spain | Barcelona International Airport BGO - Bergen, Norway | Bergen Flesland Airport BHX - Birmingham, United Kingdom | Birmingham International Airport BIO - Bilbao, Spain | Bilbao Airport BLL - Billund, Denmark | Billund Airport BLQ - Bologna, Italy | Bologna / Borgo Panigale Airport BRE - Bremen, Germany | Bremen Airport BRU - Brussels, Belgium | Brussels Airport BUD - Budapest, Hungary | Budapest Liszt Ferenc International Airport CDG - Paris, France | Charles de Gaulle International Airport CPH - Copenhagen, Denmark | Copenhagen Kastrup Airport DME- Moscow, Russia | Domodedovo International Airport DRS - Dresden, Germany | Dresden Airport DUB - Dublin, Ireland | Dublin Airport DUS - Dusseldorf, Germany | Dusseldorf International Airport EDI - Edinburgh, United Kingdom | Edingburgh Airport FAO - Faro, Portugal | Faro Airport FCO - Rome, Italy | Leonardo Da Vinci (Fiumicino) International Airport FMO - Muenster, Germany | Muenster Osnabrueck Airport FRA - Frankfurt, Germany | Frankfurt International Airport GOJ - Nizhny Novgorod, Russia | Nizhny Novgorod International Airport GOT - Gothenburg, Sweden | Gothenburg-Landvetter Airport GRZ - Graz, Austria | Graz Airport GVA - Geneva, Switzerland | Geneva Cointrin International HAJ - Hannover, Germany | Hannover Airport HAM - Hamburg, Germany | Hamburg Airport HEL - Helsinki, Finland | Helsinki Vantaa Airport IST - Istanbul, Turkey | Ataturk International Airport KBP - Kiev, Ukraine | Boryspil International Airport KRK - Krakow, Poland | John Paul II International Kraków-Balice Airport KTW - Katowice, Poland | Katowice International Airport

Luanda

Lusaka Katima Ondangwa Rundu Mulilo Victoria Falls

Windhoek

Harare

Maun

Walvis Bay Luderitz Oranjemund

Johannesburg

Cape Town

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KUF - Samara, Russia | Kurumoch International Airport LCA - Larnaca, Cyprus | Larnaca International Airport LED - St. Petersburg, Russia | Pulkovo Airport LEJ - Leipzig, Germany | Leipzig Halle Airport LHR - London, United Kingdom | London Heathrow Airport LIN - Milan, Italy | Linate Airport LIS - Lisbon, Portugal | Lisbon Portela LYS - Lyon, France | Lyon Saint-Exupéry MAD - Madrid, Spain | Madrid Barajas International MAN - Manchester, United Kingdom | Manchester Airport MLA - Luqa, Malta | Luqa Airport MUC - Munich, Germany | Franz Josef Strauss International Airport MXP - Milan, Italy | Malpensa International Airport NAP - Napoli, Italy | Nápoli / Capodichino International Airport NCE - Nice, France | Nice-Côte d’Azur NUE - Nuremberg, Germany | Nuremberg Airport OPO - Porto, Portugal | Francisco de Sá Carneiro OSL - Oslo, Norway | Oslo Gardermoen Airport POZ - Poznan, Poland | Poznan-Lawica Airport PRG - Prague, Czech Republic | Ruzyn International Airport RIX - Riga, Latvia | Riga International Airport SOF STR - Stuttgart, Germany | Stuttgart Airport SVG - Stavanger, Norway | Stavanger Sola Airport TLL - Tallinn, Estonia | Tallinn Airport TLS - Toulouse, France | Toulouse-Blagnac Airport TRN - Torino, Italy | Torino / Caselle International Airport TXL - Berlin, Germany | Berlin-Tegel International Airport VCE - Venice, Italy | Venezia / Tessera - Marco Polo Airport VIE - Vienna, Austria | Vienna International Airport VKO - Moscow, Russia | Vnukovo International Airport VNO - Vilnius, Lithuania | Vilnius International Airport WAW - Warsaw, Poland |Warsaw Chopin Airport ZRH - Zurich, Switzerland | Zurich Airport

Chapter 10 | Legislation Johannesburg, Lusaka, Harare and Luanda; with a clear sight of expanding our route network to include other Southern African destinations in the next 12 months.

Europe â&#x20AC;&#x201C; Added Services: Flights from Europe into Windhoek also offer a number of magnificent connections via Windhoek to Walvis Bay, Maun, Victoria Falls, Cape Town, Johannesburg and Luanda.

Our flights between Windhoek and Luanda offer convenient connecting times and competitive fares via Windhoek to Cape Town, Johannesburg and Frankfurt. This provides our Luanda passengers optimum travel ease connecting to Johannesburg, Cape Town, as well as to Frankfurt via Windhoek. Earlier this year, direct flights between Walvis Bay and Cape Town, Walvis Bay and Johannesburg were introduced to the route network.

USA: Air Namibia affords our clients various departure points for passengers flying to the United States of America (USA). Our agreements with our partner airlines opens up North America with Atlanta New York, Detroit as entry points. These service points into the USA are available from Windhoek via Frankfurt, via Accra and via Johannesburg.

Africa: Air Namibia affords its clients access and travel solutions, through partner airlines, to more African destinations from Windhoek via Johannesburg to Nairobi, Harare, Mauritius, Lilongwe, George, Port Elizabeth and Durban. Our clients from Southern Africa get convenient and seemliness connections into Lagos. Europe: The flagship route into Europe, on flights between Windhoek and Frankfurt enables passengers from Namibia to go further than Frankfurt into the rest of Europe. Flights beyond Frankfurt are operated by partner airlines offering our clients convenient connecting times to key cities such as London, Paris, Rome, Milan, Lisbon, Helsinki, Stockholm, Gothenburg, Kiev, Innsbruck Oslo, Warsaw, Moscow, Baltics, Prague, Budapest.

Our route network and offering, whether operated by us directly or in conjunction with our partner airlines, is designed to optimize the creation and provision of air linkages to a vast class of travellers who travel for different purposes, be it for business, leisure (tourism), sports or visiting friends and relatives. Our emphasis is in ensuring that our passengers are treated with the highest level of courtesy and respect, served with our friendly and warm Namibian hospitality. We treat our passengers as pampered guests from the moment they embark to the moment they disembark. Clients get the best Value for money: Our fares are very competitive and one of the best you get when travelling our routes. Complimentary and free baggage allowance is our generous added service to our passengers. Safety is our cornerstone and at the centre of everything we do, making sure we comply with all regulatory and environmental requirements and laws. We are committed to providing all our stakeholders and passengers, the highest level of safety and comfort. Our entire fleet is serviced by some of the most advanced technical teams in the industry, with a safety record second to none.

Awards Air Namibia has on several occasions, won the feather awards as Best Regional Airline by the Airport Company of South Africa, for airlines operating into and out of Johannesburg & Cape Town Airports. The following are the applicable years when Air Namibia received the awards: 2004; 2006; 2007; 2008; 2009; 2010; 2011; 2014. The award program acknowledges service excellence by airlines at each of their airports in different categories, called the Feather Awards. These awards are to honour and thank airlines that have demonstrated excellent customer service standards consistently during the period under review, usually each year.

www.airnamibia.com.na Mr. Paul H Nakawa Manager: Corporate Communication Tel +264 61 299 6298/6232 Fax +264 61 299 6217/6178 PRO@airnamibia.aero

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For further information please visit our website:

Chapter 10 | Legislation

NAMDEB-THE PRIDE OF NAMIBIA’S MINING ...TO 2050 AND BEYOND

MINERAL AND ENERGY GUIDE NAMIBIA

OVERVIEW

Namdeb Diamond Corporation (Pty) Limited is a wholly owned subsidiary of Namdeb Holdings (Proprietary) Limited Holdings which is owned in equal shares (50:50) by the Government of the Republic of Namibia and De Beers. Namdeb performs land-based prospecting (exploration), mining and rehabilitation operation and services for Namdeb Holdings. The heart of the operations is along the southwest coast of Namibia with the main land-based operations in Oranjemund and satellite mines near Lüderitz and along the Orange River. Several types of innovative mining techniques are employed to extract diamonds from alluvial deposits of ore bodies. Specialized equipment such as vacuum extractors, dredgers, accretion conveyors and drill platforms are used to extract the resource, create more accretion and sampling respectively.

RICH DIAMOND HISTORY

As far back as 1920 diamond-mining companies along the Orange River were amalgamated to form Consolidated Diamond Mines (CDM). In 1994, the Namibian Government and De Beers entered into a new partnership when Founding Father, His Excellency President Dr Sam Nujoma and Mr. Julian Ogilvy Thompson signed an accord which led to the formation of Namdeb Diamond Corporation. Since its inception, the partnership has created significant value such as: • More than 15 million carats worth N$41 billion produced; • N$12 billion distributed to shareholders, of which nearly 80% went to the Government; • More than 70% of its procurement budget of more than N$1 billion was spent on procuring goods and services from Namibian entities ;

•

Over N$9 billion paid to Government through royalties, taxes and dividends over the last two decades

For more then two decades, this successful partnership model has contributed immensely to its shareholders, and to Namibia. It has clearly demonstrated that Government and a private enterprise can do business which is mutually beneficial. As a result of this partnership, Namibia has gained access to important research and development (R&D), technical, mining, marketing skills and experience.

ZERO HARM

Safety is a value and the number one priority for Namdeb. A zero harm approach forms the foundation of all aspects and this care is extended to all stakeholders and the environment in which Namdeb operates. Namdeb is therefore proud to have continuously retained its Occupational Health and Safety Audit Standard (OHSAS 18001:2007) and ISO 14001:2004 certification. As a learning organisation, Namdeb has introduced several safety interventions over the years to improve safety performance. Amongst other initiatives, the company has adopted a zero harm strategy which outlines 6 key operational risks, namely vehicles, electricity, work in confined spaces, lifting operations, work at heights and water. Namdeb continues to retain this international accreditation for environmental management. The company conducts the Environmental Impact Assessment (EIA) process which includes stakeholder and community engagements aimed at avoiding, mitigating and minimizing impacts. Environmental clearances are in place for all Namdeb’s licence areas.

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Chapter 10 | Legislation The integration of biodiversity stewardship into the mine’s life cycle from exploration, projects, operations and closure is key to environmental management. For several years the company has supported various research and conservation efforts in both land and marine environs through the establishment of partnerships with key research and academic institutions. The unique biodiversity and archaeological/heritage found within Namdeb’s mining licence areas has resulted in a comprehensive rehabilitation programme which retrospectively addresses the legacy of over 100 years of mining in Tsau //Khaeb (Sperrgebiet) National Park. It is through this programme that provision is made to rehabilitate mining, nature and conservation based areas. Concurrent rehabilitation is catered for annually and is aligned with the company’s Strategic Business Plan. More than 118 000 tons of scrap has been removed from the company’s licence areas since the approval of the Rehabilitation Plan by the Namibian government in 2008. This includes the internal sign-off of 29 scrap yards in two Southern Coastal Mines and contractor mined sites in Northern Coastal Mines. The demolition of infrastructure and landscaping of key sensitive areas such as Pocket Beaches sites 2, 11 and 12 are but a few examples of rehabilitation efforts.

BUILDING NAMIBIA’S SKILLS BASE

With a workforce of approximately 1 800, Namdeb continues to build its skills base. There remains a focused commitment to increase the number of female employees within an industry that is traditionally male-dominated through human resources strategies for roles such as Artisans, Metallurgists, Geologists and Engineers. Namdeb’s tertiary educational schemes have played a pivotal role in developing human capital not only for the company but for the nation at large. This contribution to national skills development is evidenced by the number of Namdeb-trained professionals employed in various key sectors of the Namibian economy. Other forms of educational assistance such as Vocational Training, Learnership Development Programmes and Self-Study for employees have contributed to developing skills.

INNOVATION AND TECHNOLOGY

Whether the Namdeb diamonds are ensconced in the terraces of where the ancient Orange River once flowed or on the raised linear beaches along the coast, the windblown valleys or the submerged offshore beaches, the process of finding and extracting them calls for innovative thinking and unconventional solutions. As such Namdeb continues to explore innovative ways to profitably and sustainably mine the resource in areas which were previously difficult to mine and in so doing extend the life of mine (LOM).

• • • • •

ongoing investment in resource development campaigns, both in the ultra-shallow, shallow and midwater deposit areas, expansion and optimization of our beach accretion systems to create more sustainable and longer term mineable areas, investigation into more cost effective waste stripping systems implementation of X-ray Transmission (XRT) technology in a production environment and the introduction of an alternative main production plant in Southern Coastal

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PAULINE THOMAS BRAND MANAGER P O Box 1906 Windhoek Tel +264 61 204 3333 Fax +264 61 204 3367 pauline.thomas@namdeb.com www.namdeb.com

MINERAL AND ENERGY GUIDE NAMIBIA

The Resource and Reserve, Development and Depletion plan (R2D2) is based on re-focusing Namdeb’s long-term strategy for Namdeb to materially increase its annual production, reduce unit operating costs and extend the Life of Mine (LOM) to 2050 and beyond. Exciting new projects underway include the focus on:

Sendelingsdrif Mine and Red Area Complex (RAC) which were both inaugurated by former President, His Excellency Hifikepunye Pohamba, in November 2014 are illustrative of Namdeb’s ethos to continuously innovate to create long-term value for our employees, stakeholders and Namibia at large. These developments reflect Namdeb’s commitment of ensuring that Namibia will continue to hold’s its place as a world leader and centre of excellence in alluvial diamond prospecting and mining. Diamond mining has created a wealth of expertise resulting in generated revenue, which has played a significant role in building the social and physical infrastructure of an independent Namibia. Namdeb is proud to have contributed to the national GDP and remains committed to being the PRIDE of Namibia’s Mining to 2050 and beyond!

Chapter 10 | Legislation

Telecom Namibia Building the Infrastructure for the Future

elecom Namibia, the Government-owned and largest ICT (information and communications technology) provider in the country, has proven itself a proactive player since its foundation in 1992, establishing a state-of-the-art telecommunication network infrastructure. The importance of a world class telecommunications structure for national development in Namibia needs no explaining. International mining companies, for example, operate in a global environment and need to be in 24-hour communication with operations around the world. Even more pressing are the needs of Namibia’s growing tourism industry. Tourism now accounts for nearly 20 per cent of all employment and contributes N$7.2 billion to GDP as around one million visitors are attracted to the country’s scenery and game parks. To support this, the hotels and travel agencies need to be able to connect to booking sites in the UK, Germany and South Africa—and of course, visitors these days expect broadband access and mobile connectivity wherever they are.

WEST AFRICA CABLE SYSTEM (WACS) The commissioning of the Swakopmund Cable System in June 2012 was undoubtedly the biggest and most important milestone achieved by Telecom Namibia as the landing party for Namibia in 2012. The cable system forms part of WACS which landed on the Namibian shores on 8 February 2011.

MINERAL AND ENERGY GUIDE NAMIBIA

The infrastructure brought affordable information technology services to Namibians and opened up opportunities for further growth of ICTs in the country. WACS is an important contribution to the development of a new era of modern communications that supports economic and social development in Namibia and the SADC region.

Figure 1: INTERNATIONAL POINTS OF PRESSENCE

Besides, WACS, Namibia today has connectivity to any global destination for access of any global content. Telecom Namibia is also well connected to two other major submarine fibre cable routes, i.e. SAT3 and SEACOM, thereby enhancing the reliability of Namibia’s connectivity to the global system.

• From Swakopmund to Windhoek

OTN/DWDM TRANSPORT PLATFORM

• Gobabis is also connected via Stampriet via Maltahöhe via Aus to Keetmanshoop

As part of the network upgrade, Telecom Namibia has deployed an Optical Transport Network and Dense Wavelength Division Multiplexing (DWDM) transport platform across the national backbone network to provide for high capacity long distance routes.

• From Grootfontein via Rundu to Katima Mulilo

• From Swakopmund via Khorixas via Otjiwarongo to Grootfontein • From Katima Mulilo via Grootfontein via Buitepos via Gobabis via Windhoek to Keetmanshoop

In addition, the DWDM transport network is being upgraded from 10Gbps to 40Gbps capacities.

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IP/MPLS POINTSOF-PRESENCE The existing IP/MPLS points-ofpresence (PoPs), which are the base of Telecom Namibia’s IP network and service provisioning, are being upgraded from 1Gbps to a 10Gbps platform to satisfy the growing demand for bandwidth on the national network and also to match to the upgraded 10Gbps DWDM transport network. New PoPs were established in Swakopmund, Otjiwarongo, Grootfontein, Gobabis and Aus to optimise the network design.

INTERNATIONAL PLATFORMS To address the increase in demand for international bandwidth, the total number of submarine traffic carrying circuits were increased from 22 x STM-1 (about 3.7 Gbps) to 32 x STM-1’s (about 4.96 Gbps), representing a year-on-year growth of about 45%. To strengthen redundancy of our global connectivity and maximise the use of spare submarine cable network capacities, SAT-3 links were migrated and integrated into the International PoPs platform. Further upstream connections to selected Tier 1 Internet Service Providers were added in South Africa (Johannesburg and Cape Town) and Europe (London and Frankfurt), strengthening TN’s position as a Tier 2 Internet Service Provider. This infrastructure is all integrated and monitored from Telecom Namibia’s 24x7 central Network Operations Centre (NOC) in Windhoek.

BROADBAND NETWORK UPGRADE AND EXPANSION

Building on the strength of an extensive Dense Wavelength Division Multiplexing (DWDM) optical transport system, capable of transporting multiples of 10 Gb/s, the next logical step was to make Ethernet access available across the country. With approximately 12,000 km of fibre optic cable across the country, 78 provider edge access routers were deployed, covering 57 points of presence (towns). This is providing TN with an IP throughput capacity of 55.9 Tb/s. This was done during 2013/2014 with Juniper technology.

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For fixed broadband and high speed broadband services, the company started to roll out Multi Service Access Nodes (MSAN’s). This is supporting our fibre to the home capability and phasing out the remaining legacy fixed line voice only network. This NGN building block will allow us to continue using our copper infrastructure and deploying fibre to the home in new developments. To date the company has deployed 72 MSAN nodes. The total Broadband port capacity is currently standing at 92,000. This development was accompanied by the deployment of fibre-to-the x (FTTX). This platform has enabled the company to deliver broadband access speeds up to 120 Mbps to customer. The rollout of MSAN nodes and FTTX will continue based on demands.

GSM With regard to mobile, Telecom Namibia has achieved a network roll out of 259 base stations throughout the country during 2014. The strategy is to ensure fast mobile Internet connectivity in all towns in Namibia. Road coverage was improved to ensure almost 100% road coverage from border to border. The evolution of data service on the 4G and 3G networks, with speeds up to 100Mbps and 21Mbps respectively, have seen TN Mobile achieving data throughputs of over 30,000 Gigabytes. The success was based on our national rollout of the mobile network to strategic locations where demand for TN Mobile services was more acute. This was reinforced by a good user experience. As a new kid on the

MINERAL AND ENERGY GUIDE NAMIBIA

The demand and appetite for high speed services in the last mile continues to increase year-on-year. In response, the company continued with its strategy to grow broadband access networks across the country. The total number of fixed broadband ports in the network was increased from 125,124 to 131,207, which is a year-on-year growth of about 5%. However, actual uptake increased from 33,056 to 43,571, an increase of 31% during the same period. To achieve this growth, a number of new fixed broadband stations were rolled out countrywide. Stations with port utilisation in excess of 80% were upgraded with additional port capacities, whereas stations with a backhaul link utilisation of 75% plus were also upgraded with additional backhaul capacities.

Figure 2: IP (Ethernet) ACCESS NETWORK

Chapter 10 | Legislation block, TN Mobile will build on this solid foundation and continuously enhances the user experience of our customers. A number of last mile fibre connections were established to provide high speed backhaul capacity to the 3G and 4G base stations.

DEPLOYMENT OF UNIVERSAL BACKHAULING NETWORK Complementing the introduction of mobile and fixed broadband access technologies, new universal backhaul backhauling network

capacities to individual Government offices, ministries and most importantly for agencies to make effective e-governance possible to the broader public. NDP4 places much emphasis for Namibia to put in place adequate ICT infrastructure by 2017 to facilitate economic development and competitiveness through innovation, research and development and by no exception includes Government. The construction of the primary fibre route to connect 13 regional administrative capitals is already completed. Construction of a secondary fibre route to 12 regional administrative capitals is also done. The outstanding link is scheduled to be completed in March 2015. The secondary route is important to ensure that the regional administrative capitals remain connected in cases of failures on the primary route. The planning for Nkurenkuru as the administrative capital for new Kavango West Region was finalised and work is scheduled to start as soon as the Regional Council premises have been constructed. The installation of the networking and security equipment is also in the final stages of completion. The project is being rolled out in phases. The first phase involves the establishment of the core network to connect the Central Government to the administrative capitals of all 14 regions. During this phase of the project, Telecom Namibia has invested about N$70 million. This phase is scheduled to be completed during the first quarter of 2015, depending on a number of factors outside Telecom Namibia’s control. The next phase of the project involves the establishment of high-speed fibre connections to link up individual Government offices, ministries and agencies to the high speed fibre-based Government core network. During the latter phase, Telecom Namibia is expected to make further investments in last mile fibre optic connections.

CONCLUSION

MINERAL AND ENERGY GUIDE NAMIBIA

Figure 3: TN MOBILE COVERAGE stations were deployed across the country. This IP/Ethernet backhaul infrastructure consolidates the existing backhaul for Metro Ethernet and other access technologies onto one platform which is in line with Telecom Namibia’s strategy to provide fixed-mobile converged products and services. The infrastructure makes it possible for the company to offer carrier Ethernet services to selected destinations across the country. The platform simplifies the architecture of the backhaul network and improves traffic routing and management.

BUILDING FIBRE-BASED NETWORKS Plans to construct a fibre-based network to connect the central government to the administrative capitals of all 14 regions in the country are at an advanced stage and progressing well. The network Telecom Namibia is building is required to support Government efforts towards decentralisations as well as the distribution of WACS

Since inception, Telecom Namibia invested N$ 4,255,667,485 in infrastructure, services and business support systems. This was done with cash generated from operations and commercial loans only, with no shareholder financial support. Investment by TN in the West African Cable System (WACS) was N$ 181 million during 2012. In the past three years alone, Telecom Namibia invested about N$1 billion, especially in deployment of our International points of presence (PoPs), implementation of a GSM and IMS core, the rollout of GSM base stations and Universal Backhauling Network. In the current 2014/15 financial year and years to come, investments will focus on providing customer services on pure business case principles and a moderate roll-out of more MSAN’s to replace the last legacy systems in order for TN to operate an all IP network at lower cost and with more advance multi-media services. The development of the country’s telecommunications network infrastructure will continue to be a top priority. “Our main objective and mission as a national telecommunications operator is to serve as a catalyst for realising Vision 2030 by creating the necessary infrastructural conditions. We see that as part of our responsibility as one of the leading ICT players in the country,“ says Oiva Angula, the company’s Head for Corporate Communications and Public Relations.

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Sustainable Development S

ustainable development is defined as ’development that meets the needs of the present without compromising the ability of future generations to meet their own needs (‘’Our Common future’’ – the Brundtland Report). The Namibian Chamber of Mines (Chamber) is an associate member of the International Council for Mining and Metal (ICMM), a leadership group focused on improving the sustainable development performance of mining companies. The sustainable develop¬ment framework of the ICMM consists of 10 principles, a reporting guideline, an independent assurance system and the promotion of good practices. The International Council on Mining and Metals (ICMM) interpretation of sustainable development for the mining and metals sector means that investments should be technically appropriate, environmentally sound, financially profitable and socially responsible. It provides guidance for operational level implementation of the ICMM Principles and elements by the Namibian mining industry. Leading practice (the best way of doing things at a given site) and a sustainable approach to management is critical for any mining company to gain and maintain its ‘social license to operate’ in the community. It is essential to integrate environmental, economic and social aspects through all phases of mineral production from exploration through construction, operation and mine site closure. In keeping with the ICMM Principles, the Chamber promotes sustainable development and the balance between social equity, environmental protection, economic development and an effective governance framework. At the World Summit on sustainable development all countries represented committed themselves to the responsible management of chemicals including mining products such as ores, ore concen¬trates, metals, metal compounds and alloys. The mining industry, through the ICMM, is developing guide¬lines on materials’ stewardship to promote responsible management of mining products. The ICMM is co-operating globally with the United Nations to develop a product management approach that is based on the principles of sound science and sustainable develop¬ment.

• Implement risk management strategies based on valid data and sound science. • Seek continual improvement of our health and safety performance. • Seek continual improvement of our environmental performance.

International Council of Mining and Metals (ICMM) Sustainable Development Principles

• Contribute to conservation of biodiversity and integrated approaches to land use planning.

• Implement and maintain ethical business practices and sound systems of corporate governance.

• Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.

• Integrate sustainable development considerations within corporate decision-making process.

• Contribute to the social, economic and institutional development of the communities in which we operate.

• Uphold fundamental human rights and respect cultures, customs and values in dealing with employees and others who are affected by our activities.

• Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

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The private sector, through the initiatives of the Chamber of Mines, is responding with a business case for sustainable development. The Chamber of Mines, through its own mission statement, the remit of its employees and the leadership of its members, is seen to take a proactive role in setting standards of operation and practice that maintain international standing and reputation. The primary functions of the Chamber of Mines are to protect the interest of member organizations, to uphold mining practice in Namibia to the highest standards, to observe international conventions and to ensure positive development of Namibia’s reputation as a mining nation.