23 May 2014 18:18pm
WINDHOEK, 22 MAY (NAMPA) The Chamber of Mines of Namibia has expressed concern about the prospect of State-owned mining company, Epangelo Mining Company, owning all strategic mineral deposits which are yet to be discovered.
This will result in the stagnation of exploration activities as funding by publicly listed exploration companies will be highly challenging, said the President of the Chamber of Mines of Namibia, Werner Duvenhage during the chambers annual general meeting (AGM) on Wednesday.
While the chamber is not opposed to Governments participation in the mining sector, we remain concerned at the prospect of the State-owned mining company owning all strategic mineral deposits that are yet to be discovered.
We believe this will not lead to Governments desired outcome, but will instead result in stagnation of exploration activities as funding by publicly-listed exploration companies will be highly challenging under the envisaged joint venture partnerships with the State-owned mining company, he cautioned, while sketching a picture of the challenges faced by the chamber.
Contrary to some public perception, Duvenhage said the chamber welcomed Government's announcement of the creation of Epangelo, and pledged its co-operation and assistance with relevant information.
He also announced that Epangelo is now a member of the chamber after its council approved its membership application in February this year.
Duvenhage said the biggest hurdle for the chamber is the uncertainty in the sector with regards to the policy on strategic minerals which was announced on 21 March 2011, with no legislation passed to date for its implementation.
The sustainability of the mining industry depends on vibrant exploration activities without which the future of our mining industry will be in jeopardy, he warned.
On tax amendments, Duvenhage expressed satisfaction with Finance Minister Saara Kuugongelwa-Amadhilas announcement early this year that the withholding of tax rate will be reduced from 25 per cent to 15 per cent.
Export levy rates have been finalised but not yet made public.
He indicated that it is now a common understanding that the main rationale for the export levy is to increase Government revenue as the introduction of this levy will not result in any capital investments into further value-addition activities by mining companies.
However, there is a concern that this tax will add pressure to the cost of production.
On a positive note, Duvenghage said widening the tax base without hurting the existing players is only possible through new foreign direct investments (FDIs).
This is indeed growing the cake, he added.