Alicia Dowton

Mining and Commodities

Chamber of Mines Opposes Government's Free-Carry Ownership Policy

In a move that has sparked controversy, the Namibian government's decision to offer a 15% free-carry ownership to Namibians holding Exploration Licenses (EPL) is facing strong opposition from the Chamber of Mines.

The mining sector representative body argues that this policy will discourage potential investors, defeating the very purpose of empowering locals and unlocking the country's economic potential.

At the Chamber's 44th Annual General Meeting, Veston Malango, the CEO of the Chamber of Mines, expressed the organization's strong opposition to the policy, stating that it would disincentivize exploration by both Namibian and foreign investors. According to Malango, the requirement for local entities to carry the burden of exploration activities without proportionate financial input makes investment unattractive for potential investors.

Efforts by the Chamber to engage with the Ministry of Mines and Energy and provide suggestions for refining the legislation were ignored, as the Ministry proceeded with implementation without incorporating the industry's input.

Malango also addressed other policy issues, such as the proposed levy extension to stand-alone power producers by the Electricity Control Board (ECB). The Chamber opposes this levy, claiming that it unjustly burdens power producers who do not directly benefit from it. Unfortunately, attempts to have the levy scrapped were unsuccessful.

However, there were some positive developments highlighted by Malango. The reversal of the Road Fund Amendment Bill, which aimed to abolish the fuel levy refund system, was seen as a win for the mining industry, preventing significant increases in fuel costs for mining companies. Additionally, the passing of the VAT amendment bill allows exploration companies to register for VAT and claim input VAT returns more easily, reducing operating costs.

Malango also addressed the draft Minerals Bill, noting concerns about proposed increases in royalty rates, the introduction of windfall tax, and the incorporation of Mining Charter provisions into the legislation. The Chamber argues that the mining industry in Namibia already faces high royalty and tax rates, making additional taxes unsustainable and rendering many mining projects economically unviable.

The Chamber of Mines firmly believes that the government's free-carry ownership policy will have unintended consequences, dissuading potential investors and hindering the growth of Namibia's mining industry. Their opposition is grounded in the belief that a balanced approach, taking into account the interests of all stakeholders, is essential for sustainable development in the sector.

Written by Alicia Dowton
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Source : The Brief - Click Here >>>