Namibia's Minerals Rules Affect Only New Permits, Licenses
Source: Bloomberg, Chamwe Kaira (5/10/11)
"Currently, mining's contribution to Namibian GPD is 'not enough.'"
Namibia's new minerals policy, under which all "strategic minerals" will be awarded to the state-owned mining company, will apply only to new licenses and won't affect ones held by companies, including Extract Resources, according to Minister of Mines and Energy Isak Katali.
"The existing exploration and mining licenses will not be affected," he told reporters in Windhoek today. "The alarmist reports of nationalization are a red herring. They are based on African stereotypes as neither the cabinet nor my budget statement mentioned nationalization."
Shares in mining companies operating in Namibia, including uranium producer Extract, have fallen on concern about the government's plans for the industry. The nation's cabinet said on April 29 it supported a proposal that licenses for uranium, gold, copper, coal, diamonds and rare earth metals are only issued to Epangelo, the state-owned mining company.
Namibia's government is altering its mining laws to ensure its citizens receive more benefit from the nation's mineral wealth, Katali said. Currently, the contribution of mining to Namibian GPD is "not enough," he said.
In instances where an exploration license has been granted and no development taken place, Namibia aims to accelerate work through "joint-development arrangements," Katali said. This will allow the development of a resource "without negatively impacting the rights of the existing holder," he said.
The southern African nation is the world's biggest miner of offshore diamonds, the fourth-largest uranium producer and also has deposits of gold, coal and copper.