The Bank of Namibia (BoN) said at the launch of its second-quarter economic report that growth in 2008 would largely be a result of increased uranium production and the continued strong performance of the construction, transport and communications sectors.

The central bank also revised downwards its annual economic growth projection, from 4,7%, to 3,9%, saying that a slowdown in mining output, particularly in the diamond sector, was negatively impacting on growth in the narrowly diversified economy.

Head of research at the central bank John Steytler said that the first quarter of 2008 saw great changes in the prices of commodities and that the possibility of electricity shortages in Namibia had had an effect on the performance of the Namibian economy.

Steytler said that there had been noticeable growth in uranium production, which was now expected to underpin economic growth.

“The growth in uranium production is attributed to the combined effects of good prices and the [clearing] of the production bottlenecks experienced in 2007.”

Diamond production fell from 556 622 ct in the first quarter of 2008 to 516 059 ct in the second quarter, the bank said.

But, despite the slowdown in output, diamonds earned the country R2,2-billion in foreign currency in the second quarter, up from R1,8-billion in the first quarter.

Steytler said that the country’s biggest diamond-miner, Namdeb, suffered a 7,3% decline in onshore production.

“Namdeb’s offshore contractors produced more than its own onshore operations, while the combined output of other producers declined substantially, which has led to the declining numbers,” the BoN said.

Uranium production during the first half of the year exceeded 1 000 t, the bank said.

Uranium raked in about R1-billion in export earnings during the first half of the year, the bank said.

The central bank also said the the country’s biggest copper- miner, Ongopolo, produced 3 787 t of blister copper during the second quarter, the lowest output since 2005.

Ongopolo Copper Mines shut down its Kombat mine owing to flooding and insufficient electricity to deflood the mine early this year. Mining has been con- centrated on the remaining four properties – Otjihase, Matchless, Tschudi and Tsumeb West mines.

BoN deputy governor Paul Hartmann also emphasised that future growth would come from uranium. Hartmann said that there was a lot of exploration in the uranium sector, adding that several projects would be coming on stream in 2009 and 2010.

Namibia currently has two operating uranium mines, the Rio Tinto-owned Rössing mine and the Australian-owned Langer Heinrich mine.

A third mine, Trekkopje, which is owned by French nuclear giant Areva, is scheduled to come on stream in 2009.

The BoN said that State-owned Chinese firm Guangdong Nuclear Power Corporation had struck a deal with Areva to buy 35% of the Namibian mine’s out- put.