A compliance audit has flagged major gold mines for breaching mining laws, neglecting local development obligations, and failing to provide key ownership information.
The Office of the Auditor General’s report has revealed that three of the country’s gold mines have breached the Minerals (Prospecting and Mining) Act of 1992 and the Minerals Policy of Namibia, 2003.
The report covers the financial years 2020/21, 2021/22, and 2022/23 for QKR Namibia Navachab Gold Mine, B2Gold Namibia, and Osino Gold Exploration and Mining.
According to the report, both Navachab and B2Gold failed to help Namibian citizens adequately in terms of skills and technology development in the mining industry.
“Both QKR and B2Gold Namibia did not meet the State Finance Act, 1991 (Act 31 of 1991) and Minerals (Prospecting and Mining) Act, 1992 (Act No. 3 of 1992), concerning cooperation with industry players to aid Namibian citizens in skills and technology development,” reads the report.
This is one of the requirements mining companies are expected to fulfil.
According to the report, QKR’s last poverty eradication strategy dated back to 2016, rendering it potentially obsolete for the current extractive industry landscape, and B2Gold did not provide a poverty eradication strategy.
The audit also raised red flags regarding the duration and renewal of exclusive prospecting licences (EPLs).
Out of the 13 EPLs reviewed, six exceeded the stipulated seven-year renewal limit without the mandatory ministerial approval.
Additionally, the required reduction of the exploration area upon renewal, a critical measure to encourage efficient exploration and release land for new entrants, was consistently overlooked.
The report also found that QKR Namibia Navachab Gold Mine’s company structure showed a predominant 92.5% multinational ownership, but crucial information on the beneficial ownership of this majority stake was not provided for audit verification.
Similarly, B2Gold Namibia presented conflicting information regarding its company structure, citing 90% Mauritian ownership on file, while claiming 90% Canadian ownership in response.
“Proof of beneficial ownership for the 90% foreign stake was also missing, and vital management representation structures and poverty eradication strategy information were unavailable due to a non-retrospective application of conditions,” the report reads.
It shows that Osino Gold did not provide a clear structure on how Namibians as holders of 10% or more shares in the new Osino company would derive maximum benefit, compared to the 90% shareholding the mine has retained.
“This may in turn have an impact on the profit-sharing and revenue collection,” the report says.
Additionally, the mine faced scrutiny for delays in accepting additional licence conditions, extending beyond the one-month notice period without ministerial approval.
