Lacklustre performance by Namibia’s dia- mond sector led to a slowdown in the country’s economic growth in the first quarter of 2008, the Bank of Namibia (BoN) says.

BoN deputy governor Paul Hartmann says in the central bank’s latest quarterly bulletin, released last week, that, during the quarter, diamond production fell to 556 605 ct, from 576 265 ct for the preceding quarter.

Despite Namibia’s efforts to diversify the economy, diamonds continue to anchor the economy, accounting for 8% of gross domestic product and 38% of the country’s primary- industry output in 2007.

The BoN says that weak economic conditions in the US affected consumer demand for diamond jewellery during the quarter. “However, stronger demand expected from China, India and the Middle East will continue to sustain pricing and, therefore, production for larger and better-quality diamonds,” the BoN says.

Zinc concentrate production during the first quarter declined to 22 823 t, from 22 947 t during the fourth quarter of last year and 25 622 t during the corresponding quarter of 2007. Zinc output is expected to have declined further during the second quarter of 2008, partly because of a debilitating three-week strike in May at one of Namibia’s largest zinc producers, Skorpion Zinc.

Blister copper production declined by 23% and 31,4% compared with figures for the previous quarter and the corresponding period in 2007 respectively.

Gold production shrank by 14,8%, to 724 kg.

However, uranium oxide production surged by 10% quarter-on-quarter and by 3,4% percent year-on-year.

“The rise in the production of uranium could be attributed to the low base that was caused by operational problems, which previously hindered production. “It is expected that uranium production will continue to rise due to the expected output from the expansion of Langer Heinrich mine,” the BoN says.

The Namibian economy is expected to grow by 4,7% in 2008, up from 3,8% last year, with growth coming largely from the mining sector, which is expected to grow by 10% this year.

“The economy has so far indicated stable economic fundamentals and I am not worried about the minor setbacks in the mining sector – it will certainly pick up,” Hartmann concludes.

 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.