Government’s mining revenue continues to decline
Namibia’s mining is underperforming due to a decline in diamond production. The sector is one of the largest contributors to gross domestic product (GDP).
The latest data from the Chamber of Mines of Namibia shows that the sector’s revenue contribution to the government through corporate taxes, royalties and export levies fell by 23.8%, 11.3%, and 0.28%, respectively.
“The downturn in diamond prices, coupled with reduced demand in key markets, led to weaker profitability and constrained sales volumes, thereby diminishing the revenue base from which taxes and royalties are derived,” says Zebra Kasete, chamber president.
Kasete says the contraction in Namibia’s mining sector was largely driven by a decline in diamond production, which constitutes a significant portion of the industry.
“This decline is being seen globally due to weaker global prices, reduced demand in key markets and deliberate production cuts aimed at stabilising prices and preserving high-quality reserves,” says Kasete.
While diamond production has been decreasing, uranium mining experienced marginal growth of 1.8%.
This is a slowdown compared to the impressive 29.6% growth achieved in 2023.
“This subdued performance stemmed from lower production volumes at the Rössing and Swakop Uranium mines, affected by water supply challenges and planned maintenance shutdowns. However, additional output from the Langer Heinrich Uranium mine contributed to the modest growth in uranium production.”
Additionally, the output of other key minerals, such as lead and zinc concentrate, faced setbacks due to lower ore grades despite a strong global demand for the products.
Gold production rose by 2.7%, driven by production levels at the Navachab Gold Mine.
Despite decreasing production volumes, there was an improvement in both revenue and profitability in 2024 compared to the previous year.
“Total revenue increased slightly from N$51.5 billion in 2023 to N$52.295 billion in 2024, reflecting a 1.4% growth,” says Kasete.
According to Kasete, there was also a shift in capital priorities within the sector.
Gross fixed capital formation (fixed investment) for 2024 stood at N$5.22 billion, marking a 11.7% decrease compared to the N$5.908 billion invested in 2023.
“Exploration expenditure rose sharply, reaching N$1.4 billion in 2024, compared to N$891 million in 2023.
This 66.6% increase underscores renewed interest in mineral prospecting and early-stage project evaluations, particularly in uranium, critical minerals, copper and gold prospects,” Kasete adds.
The post Government’s mining revenue continues to decline appeared first on The Namibian.
