While these countries offerexciting opportunities for those in the business of minerals, often the lack of physical infrastructure and sociopolitical instability make these destinations for the future.
Namibia’s mineral wealth is still comparatively underexplored and, in spite of a long mininghistory, offers good opportunities.
Importantly, it is politicallystable as the ruling party, Swapo, continues to have a dominant mandate from the Namibianpeople.
In spite of Swapo’s socialistaffiliations prior to independence, the postcolonial government has not hinted at nationalisation of the country’s mines.
To the contrary, the Namibian government has attractive incentives for those wishing to invest in the country’s mineral industry.
Although there has been a programme of land restitution andredistribution, this process has not involved uncontrolled land grabs as has happened in Zimbabwe. Unlike countries further north, the road, air and communications network of this sparsely-populated country are excellent.
Namibia’s tax framework isinvestor-friendly, while physicalsecurity in the country is good. Even though negotiations are still under way, minerals royaltieshave been set at 10% and royalties for dimension stone stand at only 5%. Ministry of Mines and Energy mineral economist Maswabi Likukela explains: “Our taxregime is more competitive than other African countries.” Attractive features associatedwith the EPZ status has led to many companies showing interest in investing in Namibia.
The EPZ Act permits EPZcompanies exemption fromcorporate tax and Vat, and allows them to hold a foreign currency in local banks without the normal foreign-exchange controls.
Companies participating in the EPZ can set up at any location in Namibia, however, industrialfacilities are provided by government agencies at special lowrates.
The global ratings agency, Fitch Ratings, assigned Namibia ratingsof long-term foreign currency BBB minus.
“Namibia’s ratings are underpinned by a stable policy environ-ment and sound macroeconomicfundamentals,” says Veronica Kalema, director in the Fitch’s Sovereigns Group.
It benefits from a low public and external debt burden, highdomestic savings and currentaccount surpluses, macroeco-nomic stability and relativelyrobust growth, she explains. “The country has the advantageof an abundance of mineralresources, which have been well managed, and is politically stable, all of which further support theratings,” she adds.
These factors have seen foreign investment in exploration in the last decade grow considerably.
Currently, there are a number of foreign exploration companies exploring for minerals in this arid region.
The aridity of Namibia can be a challenge for mining companies requiring copious water in remote regions.
“What has had a marked effect on the performance of Namibia’s mining industry has been the fact that the Namibian dollar is linked to the South African rand,”explains Likukela.
After a period in 2002, when the rand:dollar exchange rate was well into double digits, for the last two years the South Africancurrency has remained in the R6,50 range.
“As in South Africa, the weakening of the local currency has had a marked effect on the profitability of Namibian mining oper-ations,” he adds.
Diamonds still the major contributor
Currently, the 15 operating mines in Namibia contribute 20,8% of Namibian gross domestic product (GDP), and, after the dip in 2003, the percentage growth in theindustry has been impressive (see table on page 20).
Diamonds account for more than 30% of Namibia’s totalexports and 10% of the nation’s GDP.
Of these, Namdeb is by far the country’s largest diamond-mining company. Today, this thriving organis-ation is one of the key drivers of Namibia’s economy, being the largest private employer, exporter and taxpayer.
In 2004, the company’s production of 1,86-million carats was 28% higher than in 2003, andincluded record marine production of 865 000 carats.
Globally, diamond prices have continued to improve building on the good price performance of 2004.
However, Namdeb is a matureoperation as diamond-mining started in the region as long ago as 1920.
The emphasis is now onoptimising the resources available to the company to ensure at least another 20 years of profitableoperation.
In early 2003, Namdeb investedN$400-million in the Resource Extension Project at its Elizabeth Bay mine, situated 25 km to the south of the town of Luderitz.
This project will extend the life of mine by an additional 14 years, and will result in an increase in carat production for the first five years of the project life.
The diamond-miners will beinvesting a further N$250-million to establish what it calls a ‘pocket beach’ mine in its Bogenfels area.
Namdeb is focusing on itsmarine reserves and is exploringthe feasibility of a project to bring a large deep-water dredger to mine the reserves in Namdeb’s Chameis bay area.
Although Namdeb is by far the dominant force in Namibia’sdiamond industry, Reefton Mining NL, an ASX-listedcompany has exclusive prospecting licences covering 310 km of coastline on the Skeleton Coast.
Apart from diamonds, Reefton is also exploring for heavy mineral sands, tantalite, and precious and base metals in its Namibiantenement holdings.
The company announced at its September quarterlies that, at its Skeleton Coast diamond and heavy mineral (HM) sands project, HM sand occurrenceshad been identified over a distance of 90 km, and a prefeasibilityenvironmental assessment was being undertaken.
An extensive air-core drilling programme is being planned at present.
At Reefton’s Erongo Poly-metallic project, a preliminary evaluation of the Giftkuppe Hard Rock and Alluvial Rutile Project has been completed and a field evaluation has begun.
The demise of Namibian Minerals Corporation (Namco) presented an opportunity todiamond entrepreneur Lev Leviev to gain a significant foothold in the Namibian diamond industry.
The company formed out of the defunct Namco is Sakawe Mining Corporation (Samicor), which bought a number of the latter company’s assets.
These included the Sakawe Miner, a mining airlift ship, as well as a third-generation seabedcrawler and processing plant off the chartered mining vessel, Kovambo.
For sampling Samicor bought the one-of-a-kind reverse circulation sampling drill which had been on board Namco’s ship, Zacharias.
Samicor has four mining and exploration vessels which will be working the 15 000 km2 ofexploration prospecting licences off the Namibian coast.
The output from Samicor is being used to supply roughdiamonds to Leviev’s LLDdiamond-polishing factory, the largest in Namibia, which employs560 workers.
Diamond Fields International (DFI), a Canadian operation, has completed feasibility studiesover marine deposits located at its Marshall’s Fork project in its Luderitz bay concession. The company reported anet loss for the 2005 year of$3 814 248, or approximately $0,06 per share.
During July to October 2004, diamond-mining under a joint venture with Samicor produced31 910 carats (DFI’s 50% share was 15 954 carats) from the Luderitz sea-diamond concession, ML111. DFI resumed mining operationsduring June of 2005 with itsown mining vessel, the DF Discoverer, which was acquired in late 2004. DFI intends to increase future diamond production by improvingthe ship’s systems and pursuing the deployment of the new Sea Diamond Miner technology, as well as undertaking sampling to identify additional areas of high-grade resource.
Another Canadian explorationcompany, Afri-Can Marine Minerals Corp, is activelyinvolved in the acquisition,exploration and development of major mineral properties in Namibia. Afri-Can is one of the largest marine diamond-concessionholders in the area with interests in 25 exploration licences, covering 23 500 km2. The northern concession islocated near Luderitz and the southern concessions are locatednear the mouth of the Orange river. Afri-Can’s northern concession, the Woduna (Block J) concession area, is adjacent to a region where Marine & Coastal has estimatedinferred diamond resourcesexceeding 4,25-million carats.
The Woduna (Block J) concession area represents Afri-Can’s near-term production potential. Analysis of the combined data from both phase one and phase two sampling programmes bythe Afri-Can technical team concluded that the diamondiferous nature of Feature number 8, has been confirmed, and the extent of the mineralisation has been well-defined within the area sampled. Follow-up phase-three sampling is designed to determine the con-tinuity of mineralisation along and across the features, establishsufficient quantitative data tosupport an inferred resource, and establish preliminary data onpotential mining economics.
Not all Namibian diamondinterest is alluvial, as ASX-listed Mount Burgess Mining NL, while it has active projects in Australia, Botswana and Namibia, is investigating kimberlite pipes.
The company holds 90% ofthe Tsumkwe project, which is located 450 km northeast of Windhoek on the Botswanaborder and covers some 8 000 km2 held under nine exclusive prospecting licences (EPL), seven of which are in joint venture with Kimberlite Resources.
To date, the company discover-ed the Gura 1 kimberlite in early December 2001 and the Nxa-on kimberlite and a parakimberlite in June 2002.
Since March 2005, a number of drill holes, drilled in the western portion of the project area, have returned a significant number of very fresh kimberlitic-indicator minerals, indicating the possi-bility of a local kimberlite source.
The project has many attributes suitable for the discovery ofkimberlites in that it is locatedon the southern margin of the Congo-Angolan Craton.
Tsumkwe is situated in an area that geologically would carry a high probability of hostingkimberlite pipes.
The project is also situated in an area where seven macrodiamonds, together with significant numbers of G9 and G10 garnets, have been discovered.
Ongoing exploration workincludes drilling and loam-deflation lag sampling, whichhas delineated a number ofindividual discrete kimberlitic-indicator mineral anomalies.
In addition, the company is conducting a range of geophysicalsurveys.
Gold interest grows
AngloGold Ashanti operates the only gold-mine in Namibia, the Navachab mine near Karibib.
The carbonate-hosted depositwas discovered in 1984 and iscurrently the only producinggold-mine in Namibia.
The smallest of the AngloGold Ashanti’s operations, this oper-ation has, during its life, contri-buted 80 000 gold ounces to the parent company’s coffers.
The mine was destined forclosure in 2004, having struggled as a marginal mine through most of its life. Owing to the upswing in the gold price and the realisation of additional resources, towardsthe end of 2002 the mine applied for an extension on its mininglicence. This was granted and the board approved an extension of the life of mine to 2014. An in-house initiative to change to owner mining also contributedto improving the economic viability of the additional ten years of life. There is an optimistic view that this may even be extended foranother ten years beyond that.
Fresh interest in Namibiangold is being shown by formeranthracite miner AfriOre.
This company holds a 100%interest in the Capricorn gold project, five exclusive prospectinglicences comprising a total of205 414 ha.
The project is situated in thearea immediately north of the town of Otjiwarongo, a commercial centre in the northern part of Namibia.
The Capricorn project holdings are adjacent to the south and east of the new Otjikoto gold project, which was discovered during the late 1990’s exploration by Avdale Namibia, a subsidiary of Anglovaal Mining, now African Rainbow Minerals (ARM). Mineralisation at Otjikoto is hosted in sheeted veins withinalternating pelitic and carbonate strata underlying the main Karibib Marble member of the Karibib Formation. The Otjikoto deposit reportedly has a delineated resource of one-million ounces of gold.
Fieldwork is currently in progress to identify additional drilling targets. Detailed soil geochemicalsurveys are being conducted on surveyed grids over the remaininggeophysical anomalies and over selected areas of the Karibib stratigraphy in order to facilitate the discovery of mineralisedtargets.
Teal is a mineral development and exploration company that is currently focused on propertieslocated in Zambia, Namibia and the Democratic Republic of Congo.
The new company, headed by president and CEO Rick Menell, formerly comprised the non-South African exploration portfolio of ARM.
Its Namibian project is situatedat Otjikoto, which is locatedwithin the Otavi Exploration Area in north-central Namibia where Teal made a new discovery of vein-hosted gold mineralisation. Resource estimation work is being undertaken and an inferred mineral resource of approximately 870 000 oz of gold has beendefined to date at a grade of1,06 g/t. Teal’s management believes the resource is open-ended and has the potential for the delineationof further resources. The company has startedresource extension and delineation drilling in the build-up to completing a prefeasibility study on a possible new gold-miningoperation. Further drilling should lead toresource definition within a year.
Two drillrigs are currentlyoperational and a groundmagnetic survey will commence over the next three months, after which this information will be combined with existing geophysical data.
Bafex Exploration has beenexploring iron-oxide copper-gold (IOCG) projects in an area some 150 km north of Windhoek.
In November 2004, Helio Resource Corp completed aqualifying transaction, through the acquisition of all of the shares of Bafex Holdings, Bafex Exploration’s holding company.
In Namibia, Helio has four properties subject to earn-inoption agreements: n with Teck Cominco on the Vredelus gold project; n with Boulder Mining Corp on the Tevrede Iron-Oxide Copper-Gold (IOCG) project; and n with Yale Resources on the Leicester IOCG project and on the Otjimakuru gold project; Geologically, these projects have much in common with the deposit currently being mined at Navachab.
Base metals resurgent
The Namibian mining industrysuffered a grievous setback in 1998 when Gold Fields Namibia embarked on the closure process. Gold Fields Namibia controlled the former Tsumeb Corporation Limited (TCL) which operated mines at Tsumeb, Kombat and Otjihase, as well as a 30 000 t/ycopper and lead smelter at the town of Tsumeb.
Largely through the efforts ofits current MD, Andre Neethling, TCL was resuscitated as Ongopolo Mining and Processing, in the process rescuing 2 000jobs.
Stringent fiscal disciplines were introduced to cut costs, while Ongopolo set about restoring the production and consequent cash flow.
Since then, Ongopolo hasincreased its production largely through brownfields expansions to its existing operations.
In 2004, it restarted mining at the long-closed Matchless copper-mine near Windhoek.
Apart from processing concentrates from its own mines, Ongopolo is toll-smelting for other copper producers such as Anvil Mining’s Dikulushi mine in the DRC.
The smelter is being returned to its former capacity of 60 000 t/y of copper production.
The town of Tsumeb is locatedstrategically in northern Namibia and, as such, Neethling sees Ongopolo playing a key role in growing the natural trading route that exists from Walvis Bay, through Zambia, and on theDRC.
This cooperation would involve the various copper-mines andsmelters of the three countries involved.
Ongopolo is also exploring the possibilities of erecting a copperrefinery, which would then open up the possibility of a copper cable and wire factory.
To the south, the major news in Namibia’s mining industry was Anglo American’s Skorpionzinc-mine situated 25 km north the town of Rosh Pinah.
Construction was started in 2001 and included both an open-pit mine, and a technologically-advanced refinery to handle the zinc-oxide ore.
The mine, which was built at a cost of $450-million, is nowproducing at its full capacity of150 000 t/y of zinc.
After some initial technical setbacks, the mine reached full production for the first time in December 2004.
At current production levels, the operation is expected to have a life of mine of 15 years.
Importantly, Skorpion zinc issolely responsible for a 4% contri-bution to Namibia’s annual GDP.
Near to Skorpion, Kumba Resources’ Rosh Pinah mine was started in 1970 with the intention of the mine being a short-livedoperation. However, successive finds of ore kept this poor cousin in the Iscor stable going as a feeder mine to the parent’s steel operations.
While 2003 was a record zinc production year for Rosh Pinah Zinc with 91 229 t produced, this record was eclipsed again in 2004.
In a 33% improvement, the mine managed to produce 121 000 zinc tons while lead production stayed constant at some 30 000 t.
Three years ago, the mine embarked on a strategy to improveprofitability of the operation.
Rosh Pinah also embarked on a two-year strategy to maximise the run-of-mine (Rom) tons to a level that the mine calculated would make a profit.
This plan covered the first two years and was accompanied by a programme to increase the mine reserves to more than cover the depletion rate.
The focus for the next two years is going to be to add considerably more resources, so that the mine will have a life of eight to ten years.
While the mine is seeking to improve production to a certain extent, the focus will be on increasing the reserve base verysignificantly.
This two-year programme isthe first step on the road toward what the mine terms its ‘Vision 2030 programme’. This initiative, which is still in the planning stage, will have the aim of keeping the mine operating until the year 2030.
Also in the south of Namibia,is the Haib River copper-sulphide-porphyry project, which iscurrently held by Afri-Can Marine Minerals Corp. The Haib copper project contains a large porphyry copper-molybdenum deposit hostedwithin quartz-feldspar porphyry.
An Afri-Can technical report confirms that the historic indicatedresource in the high-grade section of the deposit totals 292-million tons at 0,46% Cu, which is inexcess of 2,9-billion pounds of copper in situ.
Since its discovery in 1948,extensive work has been carried out on the Haib deposit by various mining companies, and more recently by Mintek of South Africa.
Renewed uranium interest
The improved uranium price has sparked fresh interest in thispotential fuel source.
Among these is Paladin Resources, which expects itsplanned uranium-mine in Namibia will be bigger andbetter than previously thought after significantly upgrading the size of the resource.
Paladin Resources is currently constructing a mine and plant at its Langer Heinrich project.
The resource upgrade was the result of a drilling programme and a decision to use a lower cut-off grade to delineate the resource. The Langer Heinrich project now hosts total resources of40-million tons grading 0,06%uranium, for 23 800 tons ofuranium. The mine is forecast to startproducing in September 2006 with further development of other nearby deposits to be considered in due course.
Namibia’s existing uraniumproducer, Rio Tinto’s R