By: Nghiinomenwa-vali Erastus
The Namibian government has communicated its intention to introduce a minimum 10% free carry shareholding in every mine, to be held by the state.
According to the Chamber of Mines Annual Review for 2024, which was released recently, the government communicated its intentions to introduce the free carry last year in July 2024.
Namibia has 26 mines, 6 of which are under maintenance or care. They are extracting various minerals, most of which are exported in raw form, such as uranium, gold, copper, tin, lead, and zinc.
Except for diamonds, which are mostly sorted and polished before export.
Out of the 16 mines that were reviewed by the Chamber of Mines last year, only 4 the government has shares, and only in Namdeb Holding does the government have shares of more than 10%.
The government, through the Ministry of Industry, Mines and Energy, initially announced its intention to introduce a free carry shareholding, to be held by the state in Namibian mines, during its address to Parliament on 1st March
2023.
Again, during a workshop organised by the Parliamentary Standing Committee on Natural Resources in June 2023 in Swakopmund.
The Ministry of Industries, Mines and Energy intends to introduce free carry through the implementation of a Minerals Agreement under the Minerals Act.
The Chamber has revealed that it received the draft Minerals Agreement last year in September 2024 for comment and input.
The Minerals Agreement confirms the desired minimum 10% of government free carry shareholding, which is to be held by Epangelo Mining.
According to the Chamber of Mines that the proposed implementation of the Minerals Agreement raises a number of queries and concerns.
These are concerning how it would impact existing shareholding structures at mines where Namibians or BEE entities already have shareholding.
Furthermore, how it would fit into proposed, but pending, legislative and policy proposals already dealing with ownership, such as the New Equitable Economic Empowerment Framework (NEEEF) and the Mining Charter.
According to the review, the Chamber has undertaken to first obtain clarity on these matters before advancing further discussions on free carry or the draft Minerals Agreement.
The Chamber’s Tax Committee is currently working on a Tax Model to address free carry, which will determine the necessary adjustments in the overall mining taxation framework to accommodate the desired level of free carry at 10%.
According to the Chamber analysis, the government’s free carry will introduce an additional cost burden to mining companies as they would have to finance the government’s shareholding.
The Chamber thus views this proposal as a tax matter.
The mining generated N$51.382 billion in revenue in 2024.
The government owns 50% Namdeb Holdings (Pty) Ltd and DeBeers.
Through Epangelo Mining Company the government has 10% shares in Swakop Uranium and Trigon Mining Namibia, with 8% shares in Sakawe Mining Corporation.
The government also has 3.42% shares in Rössing Uranium Limited.
The mining sector remains one of the cornerstones of Namibia’s economy, contributing 13.3% to GDP in 2024. erastus@thevillager.com.na
