Namibia Mining Report Q4 2012
Business Monitor International, September 2012, Pages: 62
The Namibia Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Namibia's mining industry.
We forecast Namibia's mining industry to grow by 18.4% in 2012 in real terms, following an estimated 25.4% increase in 2011. We forecast the value of the mining sector to grow to US$2.6bn in 2012. Growth is expected to reach 18.3% y-o-y in 2013, on the back of a surge in new uranium mining projects.
Namibia's real mining growth over 2012-2016 is projected to average 13.9% a year, with the industry reaching a value of US$4.2bn in 2016.
Diamond Prospects For Namdeb And Co.
In May 2012, Diamond Fields International (DFI) confirmed the renewal of its mining licence for the ML32 Concession offshore diamond deposit for a further 10 years to 2022. The deposit is situated north of Luderitz and covers an area of more than 17,600 hectares along the Namibian coastline to the Galdovia Reef. The deposit, which produces about 88,000 carats a year, has a potential inferred mineralised resource of 42mn cubic metres, making it the largest deposit in DFI's portfolio. News of DFI's licence renewal promises some competition in a diamond sector otherwise almost exclusively under the control of market leader Namdeb. The company controls the largest alluvial and diamond mining operations in Namibia and accounted for 92.1% of Namibia's diamond output in 2010, producing 1.47mct. Namdeb plans to increase production from its flagship Elizabeth Bay mine, from 250kct (thousand carats) to 400kct by 2014, an increase that will be partly offset by the closure of Namdeb's Bogenfels mine, which produced 53kct in 2010.
Regulatory Developments
H112 saw increased speculation regarding the possible introduction of a super tax on mining activity in Namibia, leading to the possibility of further friction between the Namibian government and the independent Chamber of Mines. In February, President Mark Dawe told Reuters that the chamber was in negotiations with the government regarding the implementation of the super-tax, which would likely be introduced in 2012. According to Dawe, miners are in favour of a common super tax on all operations across the mining sector in lieu of a suggested government surcharge on the profits of some companies during periods of economic growth. The super tax is expected to place less of an administrative burden on companies operating in Namibia. The news follows strong lobbying by the Chamber of Mines in 2011,
which resulted in the government aborting plans to raise the corporate income tax rate for the nondiamond mining sector from 37.5% to 44%. Despite the outcome, the Chamber believes controversy surrounding the tax has had a negative impact on foreign mining activity in the country, with Dawe indicating that 'a number of investors' had been scared away from the sector.
Key Players
The bulk of exploration and mining in Namibia focuses on diamonds, uranium and base metals such as copper, lead and zinc. A number of major players, including Rio Tinto and De Beers, have exploited the great potential for the exploration and mining of mineral resources. Diamond Fields International is a Canada-based mining firm involved in the exploration and mining of diamonds, nickel and gold in Liberia, Madagascar, Namibia and Zambia. Namdeb is a JV between De Beers (50%) and the Namibian government (50%), and is the nation's leading diamond producer. Vedanta Resources is a major Indianbased resources player with global reach. The company recently entered the Namibian market via the acquisition of the country's largest zinc mine, Skorpion Mine, through its subsidiary Sterlite Industries.
Executive Summary 5
SWOT Analysis 7
Namibia Business Environment SWOT 7
Global Mining Outlook 8
Table: Recent Tax Increases 11
Table: Largest Coal Projects 13
Table: Major Frontier Mining Projects 13
Africa Mining Outlook 15
Table: Recent Government Intervention 16
Industry Trend Analysis 20
Table: Namibia's Mining Industry Value & Production 22
Industry Forecasts 23
Uranium: CGNPC Purchase A Sign Of Things To Come 23
Table: Namibia's Exploration Projects 24
Table: Namibia's Uranium Production 25
Diamonds: Diamond Fields, Namdeb To Drive Production 25
Table: Largest Exploration Projects In Nambia 27
Table: Namibia's Diamond Production 27
Copper: Kombat Rehabilitation Illustrates Growth Trend 27
Table: Largest Development Projects In Namibia 28
Table: Namibia's Copper Production 29
Zinc: Forecasts Revised Following Production Drop 29
Table: Namibia's Zinc Production 30
Regulatory Development 31
Africa Business Environment Ratings 33
African Government Intervention 33
Table: Africa's Risk/Rewards Ratings 34
Competitive Landscape 38
Table: Key Players In Namibia's Mining Industry 38
Company Profiles 39
Vedanta Resources 39
Table: Vedanta's Financial Data 42
Namdeb 43
Diamond Fields International 45
Commodity Strategy 47
Monthly Metals Update 47
Aluminium: Substantial Support Around US$1,800/tonne 49
Copper: Relative Outperformer But Still Weak 50
Iron Ore: Temporary Resilience 51
Namibia Mining Report Q4 2012
© Business Monitor International Ltd
Page 4
Lead: Break Of Support Indicates Further Weakness Ahead 53
Nickel: Oversupply Pushing Prices Lower 54
Steel: Overcapacity To Keep Prices In Check 55
Tin To Outperform 56
Zinc: Downward Trend Continues 57
Table: Select Commodities – Performance & Forecasts (US$/tonne) 58
Business Environment Ratings Methodology 59
Table: Mining Business Environment Indicators 60
Table: Weighting Of Components 61
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