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Minerals in motion.

Namibia's large alluvial diamond and uranium resources, located along the southern coast and central Namib desert respectively, place it in the 'premier league' of African mineral producers. But while these are the country's two big earners, the production of smelted copper, refined lead and zinc concentrates is also significant with gold, silver, cadmium, salt, manganese, fluorspar and wollastonite produced in smaller quantities.

Quarrying also takes place for a range of attractive ornamental stone - chiefly marble and granite, and mainly exported to Italy - along with semiprecious stones such as agate, amethyst, rose-quartz and tourmaline. All diamonds, uranium, copper, and a large proportion of other minerals are sold on overseas markets, generating just over half Namibia's total 1994 export earnings of N$4.7bn (US$1.3bn).

Mining has been commercially important since the German colonial era, and before that copper had been worked on a small-scale by African communities in the north. But since Namibia gained independence in 1990, the Government has sought to optimise mineral exploration and attract fresh investment to the industry.

A new minerals (Prospecting and mining) Act came into force in 1994, providing security of tenure for licence-holders who meet agreed work commitments. Mineral agreements can also be tailored to suit investing companies. A key aim is that local economies should benefit from mineral extraction, thus increasing linkages to the root of the wider economy and creating new employment opportunities. As a spur, a 5% royalty is levied on unprocessed mineral exports.

Diamonds - first located In 1908 by an African railway worker near Luderitz-remain the biggest single contributor to exports, GDP, and Government tax revenues. This position was temporarily usurped by uranium in the early 1980s.

Total diamond output was 1.14m carats in 1993. Though less than a tenth the output of Botswana, the Namibian haul was worth almost a third more, because the volume of gem-quality stones averaging an extraordinary 95%. The per carat value averaging $250, and although the main onshore deposits along 100km of the Namib desert north of Oranjemund may be worked out in 10 or 15 years, marine reserves along the continental shelf should ensure Namibia remains a significant producer for much longer.

The Government became an equal partner with the De Beers group in the Namdeb Diamond corporation, formerly Consolidated Diamond Mines (CDM), in November 1994. According to President Nujoma it will receive additional revenues through tax and, for the first time, dividend payments. An investigation into the commercial viability of Namdeb establishing a diamond cutting and polishing factory was also agreed.

A new area of onshore potential is along the Namibian side of the Orange River where Namdeb already operates a small mine at Anchas.

De Beers Marine increased deep-water offshore recoveries to an estimated 400,000 carats last year, using sophisticated mining vessels, and will continue to work under contract to Namdeb. The huge potential is attracting strong interest from investors, with three firms currently evaluating marine areas.

Indeed the UK-based Namibian Minerals Corporation (Namco) has raised N$22.5m on the local stock exchange for a six-month bulk sampling programme in its three concessions starting this March. And meanwhile a consortium comprising Australia's BHP and Canada's Diamond Fields Resources has already obtained promising results from initial sampling of its concession off Luderitz. As if to prove the point, Cape Town based Ocean Diamond Mining has commissioned a new mining vessel for its operations around the 12 "Penguin Islands" south of Walvis Bay.

Uranium demand improves

Improved demand on the global uranium market enabled the open-cast Rossing mine to raise output by 15% last year to just over 2,000 tons of uranium oxide, following sharp cutbacks made in 1991/92. The mine is still operating at only half capacity but is increasing output under a new supply contract with Electricite de France.

The UK's RTZ Corporation now has a 56% equity interest in Rossing, while the Government holds a small block of shares with 51% voting rights in the company.

To offset reduced uranium export earnings, Namibia applied for aid under the European Union's Sysmin programme. In 1993 it received an Ecus43m grant to diversify mining activities, and help finance new surveys of promising exploration areas.

Projects underway include accelerated drilling for copper and gold, while a new granite-tiling plant has been installed at an existing marble products plant at Karibib, in central Namibia.

The current 10-year lifespan of the nearby Navachab gold mine could be extended if drilling confirms sufficient high-grade reserves at depth for an underground operation. Navachab is owned largely by Anglo American Corporation and is Namibia's first primary gold mine, producing 2 tons of bullion annually for refining in Switzerland.

The biggest metals producer is Tsumeb Corporation, a wholly owned subsidiary of Gold Fields Namibia (CFN), which operates Namibia's only smelting complex, processing copper and lead ore from mines at Tsumeb and Kombat in the north and toll-refining ore from other producers. By-products include gold - from CFN's 70%-owned Otjihase copper mine east of Windhoek - silver, cadmium, and arsenic trioxide.

Mining of the Tsumeb polymetallic orebody began early this century but reserves are nearing exhaustion and the mine is due to close next year. CFN has located a new copper deposit at nearby Tchubi but development is on hold pending a sustained recovery in prices. It plans to install new technology at the smelter - operating at only half its 70,000 tons a year capacity-to enable use of secondary feed, and increase Otjihase capacity.

The Rosh Pinah mine in the extreme southwest of Namibia produces both zinc and lead concentrates, but low prices led to liquidation of the operating company last year. The mine was put up for sale with a mid-April 1995 closing date for offers.

In mid-1994, mining of large surface manganese deposits at Otjosondu, north of Windhoek was recommenced by a South African firm Purity Manganese. Ore output should reach 120,000 tons grading 44-45% manganese in 1995, and shipments to European silico-manganese producers have commenced.

Namibia is also a major regional salt producer with two large salt works at Swakopmund and Walvis Bay, where brine from the sea is crystalised in brine pans. With the reintegration of Walvis Bay last year, Namibia's salt output more than quadrupled; the main markets are the South African chemical industry and increasingly West Africa.

A diversity of other base metal and industrial mineral deposits exist, mainly in the north-central geological zone, where the metallogenic potential is already well-established, and the northwestern Kaokoveld region. Prospecting expenditure almost doubled to N$38m in 1993, excluding money spent on developing existing reserves, and is likely to have further risen last year.

New high-density aeromagnetic data is currently being acquired by the Geological Survey of Namibia for sale to exploration firms; six areas in the north and centre of the country are being surveyed, this will help Namibian mining leap into the 21 Century.
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Title Annotation:Special Focus on African Oil and Minerals; Namibia
Author:Murray, Roger
Publication:African Business
Article Type:Cover Story
Date:Apr 1, 1995
Words:1147
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