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Alweendo charms mining industry

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Alweendo charms mining industry
Mines and Energy Minister, Tom Alweendo, said Government may scrap requirements for black economic empowerment in the mining sector as it seeks to woo investors to an industry that is rebounding with the commodities cycle.
Alweendo told the Windhoek Observer on Tuesday that his ministry will soon engage the mining industry to discuss whether the empowerment policy, introduced in 2015, has had any benefits to the sector and the Namibian economy.
“I am not going to withdraw them (empowerment policy regulations) unilaterally, obviously we first have to discuss and see if they are really serving the purpose of why they exist. If the answer is, they don’t, then maybe we should change,” Alweendo said.
“I think the empowerment we want is to have Namibians becoming industry participants not just getting money out of the industry and disappearing somewhere else.”
He said his ministry should not be giving exploration licences to people without money to find minerals.
“Rather give them to people who have the money, and maybe once they have found something you may then start to say that we really want to have empowerment of Namibians and therefore before you open your mine let’s talk of empowerment.
“To give exploration licences to many people who won’t add value, I think we are just slowing down the empowerment that we want to achieve at the end of the day.”
He said it’s rather better for mining companies to be given the chance to open mines that will employ hundreds of people than to empower a few select individuals.
“I would rather we open two mines, each employing 400 people. Just imagine how many families will be empowered through that employment instead of me getting rich and probably with my family and a few others that are close to me that is not the empowerment that we are looking for. So we will have to have that discussion formally and see how best we can change and make sure that we have exploration that is effective.”
Under the policy, there must be a minimum 20 percent representation of historically disadvantaged Namibians in the management structure of a company that applies for an exploration licence.
At least five percent of the company shall be owned by Namibian persons or by a company wholly owned by Namibians.
The company should also submit a proposal to the mines minister that should address the Government’s objectives of poverty eradication by providing an opportunity for Namibian participation, as well as setting out a strategy to benefit the Namibian youth and women particularly from disadvantaged groups and the poorest of the poor.
Former Chamber of Mines of Namibia President, Johan Coetzee, told a gathering of mining executives on Tuesday that the introduction of the empowerment policy regulations remains by far the biggest regulatory challenge faced by the industry since then.
Coetzee said the empowerment policy has not added any value to the original objective of poverty eradication through job creation and empowerment especially for Exclusive Prospecting Licences (EPLs).
“The Chamber has affirmed that Additional Conditions are doable at mining licence application level, but impractical for EPLs.
“To place a condition for BEE empowerment to be concluded before an EPL can be granted is unrealistic and flies in the face of government policy to make Namibia the most attractive investment destination for mining and exploration,” he said.
“Engagements on this matter have been intense, tedious and time consuming.”
The results of the 2017 Fraser Institute Survey revealed that Namibia continued to deteriorate from its once prestigious position in 2014 as the most sought after destination for investment in mining in Africa to 6th position in Africa.
Namibia’s absolute score declined from 66 percent in 2016 to 60 percent in 2017, clearly indicating deterioration in investor sentiment towards the country’s mining sector.
The 2016 Fraser Report specifically mentioned Additional Conditions and NEEEF as drivers for Namibia’s poor showing on the rankings.
“It is of utmost concern to the Chamber that Additional Conditions to licences have not lead to any tangible results in the fight against poverty as no significant jobs have been created from exploration in the wake of these conditions,” Coetzee said.
This comes as Namibian President Hage Geingob recently announced that his government has scrapped a clause in its economic empowerment framework that would have forced white businesses to sell a 25 percent stake to previously disadvantaged blacks, after reservations by business lobby groups, including the Chamber of Mines.
 
 
 

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