Mining is the biggest contributor to Namibia’s economy in terms of revenue. It accounts for 25% of the country’s income. Its contribution to the gross domestic product (10.4% in 2009, 8.5% in 2010, 9.5% in 2011) is also very important and makes it one of the largest economic sectors of the country. The majority of revenue comes from diamond mining.
Namibia’s mining industry is regulated by the Diamond Act, 1999; the Minerals (Prospecting and Mining) Act, 1992; and the Minerals Development Fund of Namibia Act of 1996. The petroleum sector is governed by the Petroleum (Exploration and Production) Act, 1991; the Petroleum (Taxation) Act, 1991; the Petroleum (Exploration and Production) Amendment Act, 1993; the Petroleum Laws Amendment Act, 1998; the Model Petroleum Agreement, 1998; and the Petroleum Products and Energy Amendment Act, 2000.
In 2006, the Government confirmed a royalty schedule that originally had been introduced in 2004. A 3% royalty was levied on the market value of base, precious, and rare metals and nonnuclear mineral fuels. A 2% royalty was levied on industrial minerals and nuclear mineral fuels. The Government encourages private sector exploration and development according to guidelines set out in its 2003 paper entitled “The Mineral Policy of Namibia.” The Ministry of Mines and Energy and its Diamond Affairs, Energy, and Mining Directorates regulate Namibia’s mining and petroleum industries, and the Ministry concerns itself with the provision of national exploration and mining databases and competitive exploration and mining policy and regulations.
The Ministry of Trade and Industry is responsible for regulating manufacturing activity, which includes mineral beneficiation, the production of cement, and the processing of semiprecious stones; the Ministry also promotes resource-based development.
The larger mining operations in Namibia tended to be funded and operated by domestic and international investors. Numerous local operations were involved in smaller-scale industrial mineral production, especially the semiprecious gemstone sector.
Mining provided for over 14,000 jobs in 2011. The artisans for the industry are educated in the Namibian Institute of Mining and Technology (NIMT) in Arandis, Keetmanshoop, and Tsumeb, as well as at University of Namibia (UNAM)’s Faculty of Engineering and Infomation Technology in Ongwediva. Namibia University of Science and Technology (NUST)’s Faculty of Engineering in Windhoek also provides mining education.
The long tradition of mining in Namibia has been renewed with the reopening of the Tsumeb-area copper mines and smelter, the opening of the Skorpion zinc project, the expansion of the fluorspar and the gold mines, and continued offshore diamond development of the past few years. Extensive exploration in Namibia for base metals, diamond, gold, natural gas, and uranium has been attributed, in part, to the rise in world commodity prices. Potentially new mine development and new value-added gemstone cutting and polishing, metal-processing, and other mineral-based manufacturing industries could maintain the mineral sector’s position as a significant segment of the economy of Namibia for the foreseeable future.
With a climate that is among the driest in the world, the lack of water resources will continue to be a constraint on mineral development in Namibia, as will the availability of fuel and electric power. New investment to develop the country’s natural gas resources and harness the hydroelectric power potential, and the proposed (2006) introduction of nuclear-powered electricity-generating plants, will influence the future economic growth of Namibia. The expansion of regional transportation infrastructure in northern Namibia could see the Port of Walvis Bay become an alternative route for mineral exports from southeastern Angola, Botswana, and Zambia.