China keen to mine Namibia

Augetto Graig - The ambassador of China to Namibia, Zhang Yiming, says mining in Namibia has a brilliant future and that his country has a huge interest in the local industry. According to the ambassador the reasons why China, the leader of global economic growth contributing 31.6% in 2019, is so attentive to the development of mining in Namibia are China’s own huge demand, Namibia’s rich minerals resources, the relatively good local business environment and excellent bilateral relations. Speaking during a Namibia Media Holdings (NMH) panel discussion, sponsored by Standard Bank Namibia, on Namibian mining resilience on Tuesday, Yiming said China is a major global player in terms of mining production and consumption accounting for one fifth of the world’s total energy production in 2018, and 24% of global energy consumption. China also imported 16% of the world’s crude oil that year, 13% of the global natural gas production, 64% of iron ore, 56% of copper ore and 76% of bauxite ore. Yiming said the giant economy cannot survive without sustainable and stable supplies of energy and natural resources, which is the driving force behind Chinese mining companies going abroad and coming into Africa for international trade and direct investment.Prime targetNamibia is a prime target for these companies because of the country’s endowment of mineral resources. Already in 2019 bilateral trade between Namibia and China reached an historic high worth N$28 billion, he said. Almost half of that was trade in copper while trade in uranium also increased by 43% last year, he said. China sees Namibia as a strategic mineral reserve country where diamonds, uranium, copper, lead, zinc and gold can be found. According to Yiming, Namibia’s government is active and has open transparent policies which guarantee the resilience of the local industry which generated N$33.5 billion income from operations in 2019 and contributing 9.3% to Namibian GDP growth last year. Yiming said China and Namibia have enjoyed excellent relations since Namibia’s independence 30 years ago. To date China has become the largest trading partner of Namibia, and since 2019 also Namibia’s largest export market. Already some 60 Chinese state-owned enterprises and larger private companies operate in Namibia, of which about a tenth are involved in mining and exploration of uranium, marble, gold and manganese. InvestmentsYiming highlighted Chinese investment in the development of the Husab uranium deposit which amounts to US$5 billion (about N$87 billion) since 2012. “This is the single largest Chinese company investment in Africa,” he said. Once the Swakop Uranium operation reaches full production it will be able to supply 30 nuclear power units in China for thirty years, possibly contributing up to 5% of Namibia’s GDP and making up as much as 20% of exports. Such successful investments from giant state-owned Chinese companies are a vote of confidence to Chinese interests looking to invest in Namibia, he said. Yiming said China has restored normal economic and social activities in the wake of the global Covid-19 outbreak and by the second quarter of 2020 already recorded 3.2% positive economic growth. With this demand for electricity has expanded and the Chinese government’s clear policy is to support the development of nuclear power to meet this demand. “So far only 5% of total electricity demand in China is supplied by nuclear power. 47 nuclear power units are in operation while 15 are under construction,” he said. Globally only 10% of power is nuclear so there is room for growth and the demand for uranium will increase, he added. According to the ambassador uranium prices will increase once the demand/ supply relationship changes. Local producers need only be patient until Namibia receives this good news. Regulatory environmentTaking advantage of the presence of Namibia’s minister of mines and energy Tom Alweendo on the panel, Yiming conveyed Chinese mining companies’ desire that Namibia clarify environmental and social regulatory expectations and relax visa requirements, update labour laws and encourage unions to facilitate member participation in safety, technological improvement and cost savings, and redouble vocational and technical training of the local workforce. He also expressed concern regarding water supply interruptions. Yiming said Chinese financial institutions and companies are keen to participate in developing local water desalination, while the Chinese government intends to strengthen policies encouraging more investment in Namibia, technology transfer and personnel training, greater integration of Namibia in regional and global supply chains and the processing of minerals locally. “Why not in the future an own nuclear power unit for Namibia?” he asked.On his part Alweendo said shareholder expectations must be balanced against the expectations of the people of Namibia from the industry, and that investors who demonstrate a mutually beneficial relationship with Namibia are preferred. He concurred that for mining in Namibia, “the future is bright”. - augetto@republikein.com.na

China keen to mine Namibia

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Republikein 2025-04-25

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