Bleak Future for Mining Sector SADC

Windhoek – Fifty thousand employees in the SADC Region face the risk of losing their jobs in the mining sector if something is not done urgently to avert the situation, according to the Mining Industry Association of Southern Africa (MIASA).

MIASA, an association of chambers of mines in the SADC region, representing Botswana, the Democratic Republic of Congo (DRC), Madagascar, Namibia, South Africa, Tanzania, Zambia and Zimbabwe, warns that if there is no cooperation between governments and the private sector, the industry will slide further into decline to the detriment of socio-economic growth in the region with massive job losses, which are a threat to social stability.

So far, the mining industry has lost approximately 70,000 jobs across all commodities and considering a multiplier effect of seven, this translates to total jobs losses amounting to 490 000, according to the association.

“This means up to five million people have been deprived of their daily subsistence considering that each employee supports between seven to ten dependants,” said MIASA in a statement.

The association calls on SADC governments to uphold policy consistency in order to help the mining industry at a time when the whole of the SADC region and Africa at large is experiencing “headwinds of significant proportions that require governments and the private sector to be pulling in the same direction to weather the storm and mitigate the negative impacts of the current downturn.”

“With a large scale retrenchments in the Southern Africa region as a result of depressed commodity prices on international markets, it is imperative that governments introduce policies that are well researched and in consultations with the private sector. MIASA calls for governments to cooperate and share experiences of what works and what doesn’t.

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“There is no need to re-invent the wheel. Four jurisdictions in the SADC region are currently reviewing mining legislation. Any legislation change makes investors nervous for as long as there is no finality and consultation on that legislation,” reckons MIASA.

The association further noted that since the mining industry has had no significant investment in recent years without major exploration projects for mining, government ministers in the mining sector need to assist the industry by reducing the level of bureaucracy and creating an environment that will make it easy for new and emerging miners to enter the industry.

Governments are advised to reduce uncertainty by not changing policy at short intervals, while external investors also need certainty on security of tenure to ensure long term investment in mining industry.

The industry is always ready to engage with governments in the SADC region to come with solutions that will help the industry to survive the downturn and position itself to reap mutual benefits in the next super-cycle.

MIASA recently took part in the Ministerial Symposium held on February 7, 2016 ahead of the official opening of this year’s 20th Mining indaba in Cape Town, which is aimed at promoting Africa as a preferred investment destination for mining.

While the current slump in commodity prices spells a sombre outlook for the global mining industry in the region, Namibia’s Chamber of Mines Chief Executive Officer Veston Malango Malango is positive about the Namibian mining sector.

He said this during the launch of the 2016 Mining Expo & Conference on February 24 that Namibia is well-placed to weather the storm as the mining sector finds itself in a fortunate position with recent investments that are culminating in increased production and are expected to offset any negative impacts on the industry.

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Some of the major investments in mining are the B2Gold’s Otjikoto Gold Mine, situated between Otavi and Otjiwarongo in the Otjozondjupa Region in the north, which opened its doors in June 2015, employing over 1000 people including local contractors.

The Swakop Uranium under construction invested N$11 billion, followed by Dundee Precious Metals with had a fixed investment of N$1.35 billion for 2014.

The other big mining investors during 2014 included Weatherly Mining, Skorpion Zinc and Sakawe Mining that invested N$474 million, N$287 million and N$113 million, respectively.

This was revealed in the Chamber of Mines of Namibia’s Annual Review 2014 report, which highlighted 17 mining companies.

Malango praised Namibia’s sound regulatory regime, the stable political climate and the clear framework set out by the government, which he said has made Namibia the number one mining investment destination on the African continent for two years running as evidenced by the Fraser Institute Survey of Mining Companies.

The mining sector remains the largest primary contributor to Namibian GDP and the biggest export earner.