Namibia’s mining sector showed a significant increase of 21.6% in 2022 compared to 11% in 2021 thanks to the good performance of the diamond sector, The Namibian reported on April 30.
According to the annual report of the Namibia Chamber of Mines, in 2022 the turnover of the sector amounted to 38 billion N$, N$ (167.056 billion rubles) compared to 32 billion N$ (140.678 billion rubles) in 2021. Likewise, the mining sector in 2022 significantly increased its contribution to the country’s GDP from 9.2% in 2021 to 12.2%.
“The improvement in diamond production was primarily due to a sharp jump in diamond production, which grew 44.2% in 2022. This increase is primarily due to additional production from the new offshore diamond mining vessel Debmarine Namibia, Benguela Gem”.the chamber said in a statement.
The chamber’s report noted that uranium production was negatively affected by continued water supply disruptions and overall gold production fell due to delays in underground mining at B2Gold’s Otjikoto gold mine.
The value of exports of each group of minerals increased significantly in 2022 in nominal terms, but the financial performance of the sector in terms of profitability decreased by 142%. This may indicate the impact on this indicator of cost growth due to an increase in local and imported inflation. The costs far exceeded the gains from the weaker exchange rate.
“Gross fixed capital formation in the sector decreased in 2022 as many expansion projects were completed in the 2021-2022 period”, – stated in the chamber report. These projects include the construction of the new Debmarine vessel, the development of underground mines by B2Gold and the expansion of the Nawahab gold mine by QKR.
The temporary suspension of the expansion of Trevali Mining’s RP.2 zinc mine in Rosh Pina also contributed to the decline in gross fixed capital formation.
Exploration work in Namibia continued on an upward trajectory in 2022, exceeding N$1.3 billion (5.715 million rubles) in real terms. Funds went towards progressive exploration of Andrada’s Uis tin mine, accelerating Osino Resources’ Twin Hills project, advancing uranium projects and rapidly discovering critical minerals in Namibia.
Total revenue paid to the government by chamber members increased 29.6% in 2022 as a result of higher sales revenue and higher profits generated by individual operations, especially diamond mining, compared to 2021.
The industry paid N$1.9 billion in corporate taxes in 2022, up from N$1,553 million in 2021, and also paid N$2,154 million in royalties and N$249.4 million in export duties, which they increased by 33.7% and 7.6% from 2021 to 2022, respectively. .
Total direct employment of the Namibian population in the mining sector increased by 6.9% in 2022. A total of 16,147 people were employed in this sector. The increase was due to the creation of new jobs on the new Debmarine Namibia mining vessel and the expansion of exploration activities, which contributed to an increase in the number of contractors hired.
Every job created in the industry also generates revenue for the government through income tax and VAT as a consumption tax. Mining employees paid N$2.6 billion in income taxes in 2022.
About 97% of the workers in this sector are Namibians. This means that its N$6.225bn (27.366 billion) payroll circulates throughout the country, generating additional local revenue that supports other sectors of the economy.
The mining sector also spent around N$16.823 billion on goods and services from Namibian suppliers, representing 74% of its total purchases.
Source: Rossa Primavera
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