Mining companies in Namibia typically take between eight and 15 years from the start of exploration before they begin paying corporate income tax.
This reflects the long lead times and high upfront costs associated with developing new mines.
Chamber of Mines of Namibia chief executive Fabian Shaanika says the lengthy period is driven by years of exploration, feasibility studies, permitting and mine development before a project reaches production and starts generating taxable profits.
“From the first exploration hole to having a producing mine, I would say anything between eight and 15 years is normal,” he says.
Shaanika says the timeline varies depending on the mineral being explored, the location of the project, and prevailing commodity prices.
“It really does depend on what you’re looking at. Not just the commodity type, but timing is key. If commodity prices are high, your payback period improves. If prices are weak, it takes much longer,” he says.
Shaanika says exploration costs differ significantly between projects.
“Somebody exploring for one mineral in one part of the country will have very different costs compared to someone exploring in another region or undertaking marine exploration. It is very project-specific,” he says.
He says once a mine enters production, investors generally expect to recover their capital over several years before generating substantial profits.
“If you find a project with a payback period of less than five years, that is an exciting project. Everything else is typically above five years, and marginal projects can stretch into double-digit payback periods,” Shaanika says.
Namibia’s mining sector paid a total of N$7.8 billion in taxes to the government in 2025, recording a 39% increase from N$5.6 billion in 2024.
In addition, he says royalties amounted to N$2.5 billion, representing a 9% increase, while export levies rose sharply to N$685 million, reflecting a 90% increase compared to the previous year.
In 2025, the industry spent about N$23.97 billion on locally sourced goods and services, representing 65% of total procurement expenditure and 37.4% of total mining revenue.
