Windhoek-The Namibian economy creamed off N$5.78b billion from the mining industry through taxes and royalties in the last financial year despite the extractive industry experiencing viability challenges.
The earnings keeps mining as the country’s top income earner only second to the revenue streams from the Southern African Customs Union where Namibia collects more than 30 percent of its total revenue.
According to the latest Chamber of Namibia report chronicling the operations of the mining industry in the Southern African country, Namibia received N$1.672 billion through royalties, a slight decrease from the N$1.729 received in the year 2019.
The chamber said they have also been on the forefront of assisting the Namibia government to deal with the crippling effects of the COVD 19 pandemic on the economy through providing financial support as well as contributing medical necessities to reduce the impact.
In the same vein the Southern African country received N$4.11 billion in total taxes, a massive improvement from the N$.409 billion made in the previous financial year.
In their full analysis the Chamber of Mines Namibia said despite the firm financial returns the industry also experienced challenges with the plummeting demand for precious stones.
“The demand for diamonds plummeted as a result of the pandemic. Reduced salaries and wages meant that consumers changed their spending patterns away from luxury goods to essential items. Sight holder sales were concluded with excess supply, creating an overflow in the diamond value chain. Rough diamond sales were also negatively impacted by frequent closures of major diamond cutting and polishing factories in India, and the major trading center in Belgium,” the Chamber’s Chief Executive office Veston Malango said in his analysis.
Malango reiterated that the low demand for diamonds resulted in bottlenecks along the entire value chain, causing diamond-mining operations to curtail production, including Debmarine Namibia.
“ As a safe haven asset in times of uncertainty, the price of gold soared to US$2,067 per troy ounce in August 2020, reaching its highest level in recent history. During a time when emerging market currencies, stock markets and most major markets were in negative territory, the bull gold market was a favorable and stable investment option,” he said.
He said Uranium was among top performing mineral commodities in the first half of 2020, but increased to US$34/lb. in June due to supply disruptions induced by COVID-19 at the Cigar Lake mine in Canada, and a three-month production cut from Kazakhstan.
“In the second half of 2020, a slowing rate of COVID-19 infections, rapid vaccine developments and improved health infrastructure and capacity, led to a gradual lifting of restrictions and easing of lockdown measures. Global trading thus resumed, along with normal commercial activity, and this propelled the recovery of some economies, particularly in China,” he said.
However despite the heavy rewards from the mining industry, Namibia has failed to record a fatality free year since 2014 despite the Chamber of Mines calling for improved safety measures in their members’ operations.