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Prepared by Andr le Roux

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Small upper-middle income Covers 825,418 km

Namibias GDP estimated at U$12,3 bn in

2011 Population of 2,3 m

Worlds 122nd largest economy

Mining is one of the largest contributors to

Namibias economy Extractive or mining industry N$ 12 billion

in taxes and royalties, in the last decade

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Generated 8.6 billion (+/- US$ 1 billion) Contributes 9.5 % to GDP

Namibias GDP is N$ 90 billion

Diamond mining consisted of N$ 6,5 billion

Other mining and quarrying = N$ 2 billion

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2009: Exports for mining sector reachedN$ 10.9 billion (US$ 1.3 billion)

That accounts for 44% of Namibias totalmerchandise exports.

Trends: Dominance of diamonds from the 1990s

and the decline in recent years.

Small contribution made by other minerals

Importance of metal ores, includinguranium, reflecting increased levels ofuranium oxide production.

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Rough diamonds Uranium oxide Special high-grade zinc Acidgrade fluorspar Gold bullion

Blister Copper Lead concentrate Salt Dimension stone Exploration in Oil & Gas and Rare earths-minerals

Phosphate mining also planned but met withresistance due to fears of the impact it may have onmarine life and the environment

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Rio Tinto

Rossing Uranium

Paladin Energys Langer Heinrich Uranium mine isin full production and expansion of phase 3

5th largest producer of uranium globally withtotal production in 2011 coming in at 3 258tonnes, or about six per cent of the worlds totalproduction

(World Nuclear Association)

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Areva -Trekopje

Bannerman Etango

Forsys Valencia

Husab - China Guangdong Nuclear Power Corp (2014)

Note: Because of current uraniums current prices analystsbelieve that only Husab would get of the ground in near

future because of its size and quality uranium available.

If the price of uranium reaches US$ 70 or above, then onlywill it become lucrative.

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De Beers, Government of Namibia throughNamdeb Holdings in a 50:50 joint venture,produces some of the world's finest gemdiamonds. Namdeb's output increasingly comesfrom under the sea, thanks to the technicalexpertise of De Beers Marine Namibia.

Ranks 9th in the world

Namibia produced just over 1% of the worldsdiamonds by weight but 6% by value.

Namibias diamonds continued to be of thehighest average value of the top producingcountries

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AngloGold Ashanti produces gold bullion at Navachab Mine near Karibib.

The Otjikoto-project being developed by Canadian company B2Gold expected to commence construction 2014

Rosh Pinah Zinc Corporation, with Glencore and Namibian Investors as major

shareholders, own the Rosh Pinah mine, producing zinc and leadconcentrates.

Weatherly Mining Namibia operates the copper mines Otjihase and Matchless

Namibia Custom Smelters, wholly owned Dundee Precious Metals producesblister copper at the Tsumeb smelter, from imported copper concentrates.

Okorusu Fluorspar, owned by European chemicals, pharmaceuticals andplasticsgiant Solvay, is one of the world's largest producers of acidgrade fluorspar.

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Mining Claims Available to Namibian citizens only and concern small-scale miningoperators. Duration of three-years, with a further two-year extension a possibility.

Reconnaissance Licence These licences are granted for six-months, with possibleextension of another six-months, for the purpose of conducting a preliminaryexploration of a considerable expanse of land in order to determine where prospectingshould be focused once an exclusive prospecting licence (EPL) has been obtained.

Exclusive Prospecting Licence (EPL) Licence as being available to enable the systematicprospecting of areas up to 1,000 km2 for a period of three years with the possibility ofup to two two-year extensions provided sufficient progress can be demonstrated.

- Applies to minerals

Mining Licence This licence is valid for 25 years mining licences are granted toapplicants who can show sufficient technical and financial capacity to develop andoperate a mine. A licence holder also has the right to approve the development ofother mines on the same area.

Mineral Deposit Retention Licences Retain prospecting and mineral rights withoutfurther obligations

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Three types of licences

Reconnaissance Licence

Exploration Licence Applies to petroleum

Production Licence

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With regard to the provisions of this Act the following

licences can be applied for to the Minister of Mines and Energy: (a) a diamond dealers licence entitling the holder to carry on

business as a buyer, seller and exporter of unpolished diamonds; (b) a diamond cutting licence entitling the holder to polish

diamonds for the purpose of business or trade;

(c) a diamond tool-making licence entitling the holder to setunpolished diamonds in tools, implements or other articles or tocrush or to alter those diamonds for the purpose of trade;

(d) a diamond research licence entitling the holder to conductresearch and tests in connection with diamonds, but not topolish diamonds for the purpose of business or trade.

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Before independence South African dominated all sectors ofeconomy SA dominance had dwindled - Mining sector now dominated by

multinationals China, France, Australia, Canada GRN not content with this development

But: Locals do not possess the expert skills or capital required to

undertake large scale long term exploration and mining activitiesand thus, through an informal undertaking between authoritiesand mining companies, have to largely settle for passive minoritystakes in exploration and mining activities.

ELs for locals issued farm-in international partners to carryburden

Aim: to give Namibians opportunity to gain experience in oil andgas industryto continue further when discovery is eventuallymade

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In practice: Speculative trade in Els Fronting where locals had no substantial input before

cashing in

Epangelo: GRN enacted the Strategic Minerals Act which created theEpangelo mine company.

I.t.o the act Epangelo would own all strategic mineralsStrategic minerals - all minerals except fluorspar and zincNot law yet.

Trend has emerged where private companies negotiatewith Epangelo in good faith - shares Companies notcompelled - Strategic move to safeguard their futureownership

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the risk of corruption lies not only in the flow of revenues fromcontracts and licences, but also right at the start, when extractivecompanies are granted access to these licences and contracts. Too oftenprivate shell companies with opaque ownership structures are awardedlucrative concessions, with little information available as to who thebeneficial owners of the company are, how much (if anything) thecompany has paid for the licence, and what the country has gained inreturn.

If these companies do not have the technical capacity or financialresources to develop the asset themselves, they may end up beingcarried by international and national operators. Alternatively, they maysquat on lucrative concessions by acquiring them from governmentbefore flipping them quickly to other investors who actually have thecapacity to develop the licence.

Rigged? The scramble for Africas oil, gas and minerals, Global Witness, January 2012.

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Currently licensing is statutorily done on thebasis of an open invitation to anyone to applyfor a specific licence.

Authorities are looking at introducing abidding system in respect of petroleumexploration licences.

A closed-bidding system is being considered

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References: Bank of Namibia Quarterly Bulletin September

2011

Institute for Public Policy Research: On a slippery

slope: Corruption and the extractive industries inNamibia.

IJG Securities: Namibia's Export PerformanceOctober 2012

Chamber of Mines, Namibia