Mines don’t want to be manufacturers

THE Chamber of Mines has warned Government against pushing the mining industry too far on the issue of adding value to raw products.

The Chamber’s President, Mark Dawe, issued this warning while addressing Government officials and industry stakeholders after the organisation’s annual general meeting in Windhoek on Friday. Dawe said miners should be allowed to stay within the limits of mining and should not be forced into areas where they had no proper expertise.”The chamber supports the Government’s view that our minerals and metals should be beneficiated in Namibia as far as it is practical and economically viable to do so.”However, we caution the Government not to push the industry beyond the ambit of our competence.Miners are not good manufacturers, and manufacturers are not good miners,” he said.Dawe said mining companies should be allowed to focus on their business, which is mining, but would help the Ministry of Trade and Industry to identify possible value-addition ventures that others could pursue.Dawe’s words come at a time when it is rumoured that beneficiation is the bone of contention in the current negotiations between De Beers and the Government – the two shareholders in the Namdeb diamond-mining firm.The two parties are said to have reached a stalemate, with the Government insisting on local cutting and polishing of diamonds mined in Namibia.Namdeb’s diamonds are currently shipped out of the country in raw form to the Diamond Trading Centre – De Beers’ marketing arm – in London.The Government is calling for value addition to precious minerals such as diamonds, tourmalines, garnets and aquamarine, and base metals – copper, zinc and lead – rather than continuing to export these in raw form.The Minister of Mines and Energy, Erkki Nghimtina, told the Chamber of Mines gathering that he was committed to making local beneficiation a reality.Dawe also said that the chamber was asserting itself in matters that affected its industry and would not accept being bypassed when decisions affecting the industry were being made.In this regard, he singled out the issue of royalty tax on gross sales.He said members had not been thrilled about the implementation of this tax without prior consultation, as paying royalties would have dire consequences for exploration and mining operations.He said, however, that the Chamber of Mines was for now satisfied with the postponement of the implementation of the tax while consultations continued.Dawe said because mining was the backbone of the economy, more needed to be done to sustain this industry through the opening of new mines, expansion of existing operations and increased exploration.He said the industry and the Ministry of Mines and Energy should work towards eradicating negative perceptions of Namibia as a destination for exploration and investment.”As exploration holds the key to the future of our industry, the Chamber intends to refocus its support for the exploration community.It is of great concern to us at the Chamber that expenditure on exploration has shown a decline whereas elsewhere in Africa, exploration has reached unprecedented levels,” said Dawe.He emphasised that new mines were a necessity, as old ones inevitably had to be shut down due to a depletion of resources.While agreeing with this view, Nghimtina added that it was unfortunate that some companies were misusing the country’s mineral potential and that some companies kept on applying for more exclusive prospecting rights while it was clear that they were not doing any work on their concessions.”I am already seeing to it that exploration is conducted professionally in order that the investment climate in Namibia is safeguarded.”Nghimtina said it was the duty of his ministry to see to it that Namibia maintained a stable and competitive fiscal and legislative environment within which mining could thrive and attract new investments.Dawe said miners should be allowed to stay within the limits of mining and should not be forced into areas where they had no proper expertise.”The chamber supports the Government’s view that our minerals and metals should be beneficiated in Namibia as far as it is practical and economically viable to do so.”However, we caution the Government not to push the industry beyond the ambit of our competence.Miners are not good manufacturers, and manufacturers are not good miners,” he said.Dawe said mining companies should be allowed to focus on their business, which is mining, but would help the Ministry of Trade and Industry to identify possible value-addition ventures that others could pursue.Dawe’s words come at a time when it is rumoured that beneficiation is the bone of contention in the current negotiations between De Beers and the Government – the two shareholders in the Namdeb diamond-mining firm.The two parties are said to have reached a stalemate, with the Government insisting on local cutting and polishing of diamonds mined in Namibia.Namdeb’s diamonds are currently shipped out of the country in raw form to the Diamond Trading Centre – De Beers’ marketing arm – in London.The Government is calling for value addition to precious minerals such as diamonds, tourmalines, garnets and aquamarine, and base metals – copper, zinc and lead – rather than continuing to export these in raw form.The Minister of Mines and Energy, Erkki Nghimtina, told the Chamber of Mines gathering that he was committed to making local beneficiation a reality.Dawe also said that the chamber was asserting itself in matters that affected its industry and would not accept being bypassed when decisions affecting the industry were being made.In this regard, he singled out the issue of royalty tax on gross sales.He said members had not been thrilled about the implementation of this tax without prior consultation, as paying royalties would have dire consequences for exploration and mining operations.He said, however, that the Chamber of Mines was for now satisfied with the postponement of the implementation of the tax while consultations continued.Dawe said because mining was the backbone of the economy, more needed to be done to sustain this industry through the opening of new mines, expansion of existing operations and increased exploration.He said the industry and the Ministry of Mines and Energy should work towards eradicating negative perceptions of Namibia as a destination for exploration and investment.”As exploration holds the key to the future of our industry, the Chamber intends to refocus its support for the exploration community.It is of great concern to us at the Chamber that expenditure on exploration has shown a decline whereas elsewhere in Africa, exploration has reached unprecedented levels,” said Dawe.He emphasised that new mines were a necessity, as old ones inevitably had to be shut down due to a depletion of resources.While agreeing with this view, Nghimtina added that it was unfortunate that some companies were misusing the country’s mineral potential and that some companies kept on applying for more exclusive prospecting rights while it was clear that they were not doing any work on their concessions.”I am already seeing to it that exploration is conducted professionally in order that the investment climate in Namibia is safeguarded.”Nghimtina said it was the duty of his ministry to see to it that Namibia maintained a stable and competitive fiscal and legislative environment within which mining could thrive and attract new investments.