Namibia’s mining sector recorded a year of strong growth of 21,6% in 2022 compared to 11% in 2021, on the back of good performance by the diamond sector.
The sector realised a turnover of N$38 billion in 2022, up from N$32 billion on 2021.
According the Chamber of Mines (CoM) Annual Review for 2022, the mining sector also significantly increased its contribution to the country’s GDP from 9,2% in 2021 to 12,2% last year.
“The improved performance by mining was predominantly driven by the massive jump in diamond production, which grew by 44,2% in 2022.
“This increase is mainly attributed to the additional output from Debmarine Namibia’s new marine diamond vessel, the Benguela Gem,” said the chamber.
According to the CoM review, uranium production was negatively impacted by continued water supply disruptions, and overall gold output fell owing to development delays of the underground mining operations at B2Gold’s Otjikoto gold mine.
The value of exports of each mineral classification posted significant increases in 2022 in nominal terms, but the sector’s financial performance in terms of profitability declined by 142% in nominal terms.
It appears that the cost pressures from mounting local and imported inflation far outweighed revenue gains from a weaker exchange rate.
“Gross fixed capital formation by the sector fell in 2022 as many of the expansion projects were completed in the 2021-2022 period,” said the chamber.
These included the construction of Debmarine’s new vessel, B2Gold’s underground mine development and Navachab’s expansion activities.
The temporary suspension of the RP.2 expansion project at Rosh Pinah Zinc mine also contributed to the decline in gross fixed capital formation (GFCF), said CoM.
Exploration continued on an upward trajectory, breaching N$1,3 billion in real terms.
This expenditure continued to be driven by progressive exploration activities at Andrada’s Uis tin mine, the fast-tracking of the Osino Resources Twin Hills project, the advancement of uranium projects and the discovery rush for critical minerals in Namibia.
Total revenue paid to the government by chamber members increased by 29,6% in 2022 as a result of higher sales revenues and the high profits realised by individual operations, particularly from diamond mining, compared to 2021.
The sector paid N$1,9 billion in corporate taxes in 2022, up from N$1,553 billion in 2021 and also paid N$2,154 billion in royalties and N$249,4 million in export levies, which increased by 33,7% and 7,6% from 2021 to 2022, respectively.
Total direct employment increased by 6,9% in 2022 and the sector collectively employed 16 147 people.
The increase was a result of the new employment positions created on Debmarine Namibia’s new mining vessel and increased exploration activities, which contributed to a higher number of contractors employed.
Every job created by the industry also generates revenue for the government through income tax and VAT as a consumption tax. In 2022, employees in mining companies paid N$2,6 billion in pay-as-you-earn tax.
About 97% of workers in the sector are Namibians. This means their N$6,225 billion wage bill circulated in the country, creating local spin-offs that support other sectors of the economy. The sector also spent approximately N$16,823 billion on goods and services from Namibian suppliers, contributing 74% of total procurement.
– email: matthew@namibian.com.na
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