Mining: The Permitting Dilemma

AUTHOR: David Jarrett and Team Editor@ RDJ Publishing and RDJ Group ChiefExecutiveOfficer

Mining accounts for approximately 14 percent of the Namibia’s GDP in 2023, which is an increase from 9 percent in 2021 and 12 percent in 2022 With the top performing commodities for minerals mined in Namibia were gold and uranium. Namibia is the world’s third-largest uranium producer and is home to deposits of lithium as well as rare earth minerals such as dysprosium and terbium, used in magnets and wind turbines, said Bloomberg News

The Ministry of Mines and Energy notes that any right in relation to the reconnaissance, prospecting, mining sale/disposal and exercise of control over, any mineral or group of minerals are vested in the state and are a provided for by the Minerals (Prospecting and Mining) Act, 1992 and administered by the Mining Commissioner Any person interested in undertaking mining activities should apply to the Ministry of Mines and Energy in the prescribed forms

However, less than half of mining projects approved in Namibia were in operation, a development that is prompting the government to take a tougher stance on issuing permits, said Bloomberg News The newswire quoted Minister, Hon Tom Alweendo, as saying at a conference in Windhoek that just 68 of the 162 licenses approved were active

“We have become more stringent when considering mining license applications,” Alweendo said “Henceforth, the terms and conditions of all new mining licenses shall be captured in a Mining Agreement that shall be negotiated between the Ministry and the holder of the license,” he added.

New permitting rules will stipulate that to be successful applicants must have the requisite technical skills as well as funding measures in place

One of the most unequal nations in the world, Namibia is seeking to better manage its resources to benefit residents and wants to seek more value from the metals and other resources it produces, said Bloomberg News. Namibia received over 600 new applications for exploration licenses as of December, with an additional 400 submitted in 2024, Alweendo said

Part of this new approach will also be the introduction of an online licence application portion. With this activation, there will no longer be an acceptance of manual applications, emphasising the need for all interested parties to adapt to the new online system The Ministry see this as a “step towards modernisation and aligns with the ministry’s commitment to embracing digital transformation”

Taking a step back, it is important to understand that a mining license is a legal document issued by the government that allows an investor (company) to explore and mine in a specific area It ensures that the mining activity is conducted within the framework of the national laws and regulations, including alignment for environmental protection, labor laws, and safety standards. Without a valid license, any mining activity would be illegal, subjecting the company to penalties, legal action, and potential shutdowns

Another factor surrounds that further fact that most mining licenses are generally a prerequisite for attracting investment capital. Investors and financial institutions typically require assurance that the company has the legal rights to the resources they plan to exploit A valid mining license provides this assurance, making the project more attractive to potential investors and facilitating access to capital for exploration, development, and operations

This level of interest is not surprising noting Namibia’s level of investment atractiveness as listed in the fraser Institute Annual Survey of Mining Companies, 2023 but some companies have concerns around mandated local ownershipandtheInvestmentPromotionBill

Mining therefore is an essential part of the Namibian economy and must be handled as such with permitting the essential bridge to benefit all, including reducing ore even eliminating conflicts with local communities, other land users,orcompetinginterests.

As always, the conversation continues infocus@rdjpublishing.africa

Readings:

https://www bloomberg com/news/articles/2024-08-07/namibiasays-just-42-of-approved-mining-projects-are-operating https://skillings net/namibia-takes-tougher-stance-on-miningpermits/ https://www engineeringnews co za/topic/mining https://www mme gov na/files/publications/e1c MME A5 FINAL 201 9 pdf https://mme gov na/files/publications/a6e Licenses%20and%20Rig hts%20Application%20Guidelines%20and%20Assessment%20Proced ures pdf https://www mme gov na/files/publications/6e8 LicMap Namibia 12%20February%202024%20113618 pdf https://www fraserinstitute org/sites/default/files/2023-annualsurvey-of-mining-companies pdf