The Chamber of Mines has welcomed the decision of mines minister Tom Alweendo to scrap the policy that gave preferential consideration to companies owned by Namibians in the allocation of exploration and mining licences.
The government introduced preferential conditions in 2015 to empower Namibians in the extractive sectors, such as in minerals exploration and mining – including that previously disadvantaged Namibians make up at least 20% of the management teams of exploration and mining companies.
Another condition was that the government would give preferential treatment in the awarding of exploration licences to firms which were at least 5% owned by Namibians.
“The minister of mines has withdrawn them “preferential conditions” as they were not practical, and retrogressive. You cannot empower previously disadvantaged Namibians with debt. It defeats the purpose,” the Chamber of Mines president, Zebra Kasete, said on Saturday after Alweendo’s announcement on Friday.
“Exploration is high-risk, with no guarantee of the discovery of a deposit. It is, therefore, high-risk debt,” he added.
Kasete said Alweendo retained some conditions for mining licences since empowerment at this stage was mostly based on established mineral deposits, which were “low-risk and practical”.
“The chamber welcomes the final resolution to this matter that has been pending for more than three years,” he stated.
Kasete added that the mining industry was committed to an empowerment framework through the mining charter of the Chamber of Mines, which was endorsed by the mines ministry.
The mining charter will be incorporated in the upcoming National Equitable Economic Empowerment Framework (NEEEF) law, he added.
Alweendo confirmed on Saturday that on Friday he called a halt to preferential criteria in awarding exploration licences to attract more investors.
Our objective is to grow the mining sector, where it can continue to meaningfully contribute to our socio-economic development. Alweendo
He added: “This can only happen when more minerals are discovered, and it is important that we make the process of mineral discovery as effective as possible.”
The exploration sector employed around 16 900 people last year, or 2,5% of the total workforce, but there have been concerns among unions that the sector could lose many jobs this year.
Former energy ministers Obeth Kandjoze and Erkki Nghimtina were key supporters of the empowerment measures in exploration licences, which turned a few well-connected individuals into overnight millionaires.
The two men were close to oil exploration fixer and politically connected middleman Knowledge Katti, who pocketed millions from selling hydrocarbon (oil and natural gas) exploration blocks to foreign firms.
It was reported in the past how many beneficiaries of oil exploration licences were politicians, their children, or close business partners.
A report released by the Institute for Public Policy Research (IPPR) in 2013 titled ‘Namibia’s new frontiers – transparency and accountability in extractive industry exploration’, lifted the lid on suspicious deals in the exploration sector, and exposed a worrying trend of pressure being applied by government officials on foreign firms to hook up with inexperienced, hand-picked local partners.