The Namibian government is deeply concerned about local ownership in the country’s mineral and oil exploration sectors against the backdrop of doubts about foreign domination. Apprehensions have been raised that these sectors are dominated by foreign investors, a situation that has become a cash cow for a few lucky locals who sell their exploration licences to foreign investors, said Mines and Energy Minister Tom Alweendo.
The Namibian government is deeply concerned about local ownership in the country’s mineral and oil exploration sectors against the backdrop of doubts about foreign domination. Apprehensions have been raised that these sectors are dominated by foreign investors, a situation that has become a cash cow for a few lucky locals who sell their exploration licences to foreign investors, said Mines and Energy Minister Tom Alweendo.
Alweendo stressed that awarding exploration rights to individuals who lack the necessary capability to carry out exploration has no benefit to the state, and mostly the nation that aspires to benefit from the natural resources.
The situation was further exacerbated when a former employee in the Mines Ministry was allegedly implicated in facilitating an exploration licence for Lithium which was later sold to a Chinese company, Xinfeng, for N$50 million. There is a growing public voice criticising the fact that the companies exploiting our petroleum and mineral resources are mainly owned by foreign investors.
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To address these concerns, the minister put forward two viable options. The first is to establish a State-funded minerals exploration Fund, which could be funded by a portion of the royalties that mining companies pay to the State. The Fund would then be used to assist eligible local entrepreneurs who wish to invest in the mining sector. The second is state ownership, where the state would have shares within such exploration licences. This is the most practical way to resolve the issue of local ownership. Another important issue in relation to State ownership is to establish the level of ownership that is agreeable to both the State and the investors, said Alweendo.
The government is reviewing the Mining Act, and the auctioning of exploration rights will be made an option where auctioning is deemed to be the better option.
