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Namibia’s Mining sector profitability declined by 142% last year due to cost pressures from mounting local and imported inflation, which far outweighed revenue gains from a weaker exchange rate. The current supply of critical minerals is not sufficient to meet projected massive increases in future demands, due to a handful of the rare earth minerals being only available in a few countries.
An official statement said that Namibia’s Mining sector profitability declined by 142% last year due to cost pressures from mounting local and imported inflation, which far outweighed revenue gains from a weaker exchange rate. The current supply of critical minerals is not sufficient to meet projected massive increases in future demands, due to a handful of the rare earth minerals being only available in a few countries.
The industry profitability was affected despite the value of exports of each mineral classification posting significant increases. During the year, metal ores increased by 12%, uranium ore by 8%, diamonds by 73%, copper by 8% and other minerals posted a growth of 33%. Mineral commodity prices varied with zinc and uranium being the only commodities to post relative gains from 2021 to 2022 of 38.5% and 15.9% respectively, while gold shifted by a mere 0.1%.
The mining sector recorded another year of strong growth in 2022 of 21.6% compared to 11% in 2021. In the same vein, the industry increased its GDP share contribution from 9.2% in 2021 to 12.2% in 2022. The total revenue to the government from mining companies increased by 29.6%, due to good performance in the diamond sector. Corporate taxes paid by the industry increased from N$1.55 billion in 2021 to N$1.9 billion, an additional N$2.15 billion paid in royalties representing a 33.7% growth from the previous year. A further N$249.4 million was paid in export levies, an increase of 7.6%.
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The industry provided 16,147 local jobs, of which 8,391 are permanent, 742 temporary, and 7,014 contractors. This was a 6.9 increase in employment provision, with a salary bill of N$6.22 billion. Furthermore, N$16.82 billion was spent by mining companies in supporting locals through the procurement of supplies.
