MINING

The metals, mining and adjacent industries have been a key driver of economic growth, hard currency earnings and fiscal revenues in Namibia since Namibia gained her independence in 1990. In 2023, mining companies provided revenue to the government to the tune of N$6.861 billion, mainly through corporate income taxes, royalties and export levies. 

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Mining accounts for about 12.5% of Namibia’s Gross Domestic Product (GDP) and provides over 50% of foreign exchange earnings. Mining companies also contribute to the education and skills development through corporate social responsibility. As such, the sector helps achieve the macroeconomic goals of the country i.e. reducing poverty, creating employment and improving education, to name a few.

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In addition to mining there are adjacent industries such as metal manufacturing, metal processing, welding machinery and tools, metals and basic metal products as well as sand, concrete and construction materials that are key to Namibia’s economic development. These industries support growth and form part of the local procurement spending of mining companies in Namibia. In 2023, the mining sector spent approximately N$21.022 billion on goods and services from Namibian registered businesses. As a proportion of total procurement (N$26.388 billion) spent by the sector, 80% was spent on local businesses. Local procurement also constituted 40.9% of the total of the N$51.6 billion in revenue generated by the industry. 

 

Some key highlights about the Namibia’s mining industry include:

• Major minerals in the Namibian mining sector consist of diamonds, uranium, gold, zinc, lead and copper, along with some industrial minerals, such as salt and dimension stone.

• Mining and quarrying have contributed an average of 11.04% in real GDP since 1980 and 11.1% in 2022.

• Diamond mining has made up over 61.4% of real GDP generated from mining and quarrying since 1980, and value added from diamond mining has increased by 45.1% in 2022, after a 0.0 % growth recorded during the previous year.

• The mining sector is still mainly extractive and exports mostly raw materials, although diamond processing has been promoted, contributing roughly 1% of real GDP since 2016.

• Mineral exports have contributed to 56.6% of all exports in the last six years, with diamonds alone contributing 14.29% over the same period.

• Namibia has attracted significant investment into existing mines and exploration activity, with the latter focused on precious metals (gold), base metals (largely copper and zinc), nuclear fuels (uranium), and rare earth elements.

• Total employment in 2023 was 18,189, up from 16,147 recorded in 2022, with the majority being Namibians (approximately 98% of the workforce). The total wage bill for the industry stood at N$6.865 billion in 2023, of which N$1.186 billion was paid to the fiscus in the form of personal income tax for salaried workers. 

• Beneficiation policy is largely downstream-focused, with limited potential, given the scale and grade of Namibia’s resource endowment. However, upstream activities may provide opportunity, given the emphasis on domestic procurement.

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Except for diamonds, Namibia’s mineral wealth is not exceptional by regional standards. However, the country has a very good policy environment that makes it an attractive jurisdiction to potential investors.