7 Samicor TransHex 17 DiamondFields 16 DeBeersMarineNamibia 15 Namdeb 14 RoshPinah 13 Skorpion 12 Otjihase Matchless 11 Navachab 10 Rössing 9 LangerHeinrich 8 WalvisBaySaltRefiners 7 SaltCompany 6 OkorusuFluorspar 5 Kombat 4 Tsumeb 3 2 1 Mining locations

page  Chamber of Mines Annual Review 2005-2006 page  Chamber of Mines Annual Review 2005-2006 Annex 3:Chamberempowermentstrategy Chamber President’s Review De BeersMarineNamibia Rosh PinahZincCorporation Okorusu Fluorspar Feature: “Namibia’s uranium explorationboom” Salt andChemicals Trans HexMarineNamibia Sakawe MiningCorporation Annex 1:Keystatistics Feature: “We arebeingproactive” Langer HeinrichUranium Mining andtheeconomy AngloGold Namdeb Highlights Table ofContents Glossary References Rössing Uranium Annex 2:Chambermembersandcommittees Skorpion Mining Ongopolo MiningandProcessing ...... Ashanti ...... page 82 page 3 page 20 page 38 page 28 page 60 page 58 page 26 page 54 page 46 page 68 page 4 page 24 page 62 page 14 page 42 page 86 page 93 page 72 page 50 page 34 page 88 2005-2006 eview Highlights R nnual

Marine diamond production outstrips A ines land production for the first time ever M of

hamber C Weatherly International plc buys Ongopolo Mining and Processing (Pty) Ltd

Langer Heinrich Uranium (Pty) Ltd opens world’s first new uranium mine in 20 years

Life of mine extended at Rössing and Navachab

Record exploration spending of N$477 million (US$75 million) in 2005

Strong mineral prices especially uranium oxide, gold, zinc and copper

Revised mining royalty tax introduced at rates between 2% and 3% from 1 November 2006

Chamber of Mines refocusses on needs of mining and exploration companies page  2005-2006 Chamber President’s eview R Review nnual A

ines A year has gone by since the publication of our first glossy review. As we had M

of hoped, the review very successfully served to represent our industry on all levels,

both locally and internationally. It has become the Chamber’s calling card and

hamber the mouthpiece of our industry. Our first review was handed out to government C ministries, NGOs, local and international businesses, municipalities, prospecting companies, embassies, and even schools.

To complement the review, the Chamber’s website went live in February 2006. We don’t yet have the ability to assess just how many “hits” the website has received, but plan to install a counter very soon. Of course a website is only as useful as the degree to which it remains current. We intend to continually add breaking news and Mark Dawe Chamber President relevant information about our industry so that our website becomes the first port of call for anyone interested in mining in Namibia.

MME Imposes a Revised Royalty Tax on the Industry As I write, news of the government’s decision regarding the royalty imposition has just broken. The Chamber vehemently opposed the previous imposition of a royalty on gross sales, announced by way of a government gazette issued in November 2004. The main factors behind the Chamber’s discontent with the royalty imposition were its unaffordability, especially during times of a strong local currency, and the complete lack of consultation with the mining industry, through its representative, the Chamber of Mines.

The Ministry thankfully agreed to The Minister of Mines and Energy thankfully agreed to postpone the imposition until postpone the imposition of the royalty tax until it had consulted he had consulted the industry. In 2006, Chamber members representing the larger the industry. mining operations were each given an opportunity to present their economic cases to the Ministry. Following several visits by Chamber office bearers, the Chamber was afforded the opportunity to present its recommendations to the Honourable Minister and his senior staff of the Ministry in August 2006. The Minister had appointed the Mining Commissioner to oversee and review the consultation process, and to make recommendations regarding the affordability of a royalty on gross revenue to the various classes of minerals and metals. The conclusion of this process resulted in significant changes to the original imposition. On the 1 November 2006, the government made known its intentions in the Government Gazette No 3733. Accordingly, the Minister has now imposed the following royalties on the various classes of minerals, effective from 1 November 2006. Further changes were introduced on 1 December 2006.

Mineral Class Notice 248, 15 Nov 2004 Notice 192, 1 Nov 2006 Precious Metals 5 % 3 % Base and Rare Metals 5 % 3 % Semi Precious stones 4 % 2 % Industrial Minerals 4 % 2 % Nuclear Fuel Minerals 5 % 3 %1 Non Nuclear Fuel Minerals 4 % 2 %2 1 Changed from 2% to 3% on 1 December 2006 2 Changed from 3% to 2% on 1 December 2006 page  2005-2006 eview R nnual A

It is certainly refreshing to know that in our fledgling democracy, stakeholders ines

The combination of a royalty M are afforded the opportunity of debating and influencing matters of legislation so of and a 37.5% corporate tax rate important to the future of our industry and our country. This consultative process is simply too high and firmly establishes Namibia as one of is becoming a trade mark of Namibia, where freedom of the press has reached hamber

the highest taxed countries in C unparalleled levels on the continent, placing it squarely among the rank and the world. file of the world’s true democracies. Notwithstanding this, Chamber members remain concerned that the combination of the royalty tax on gross revenue (albeit at a reduced level), and one of the highest mining corporate tax rates in the world (37.5%), is clearly eroding Namibia’s competitiveness ranking, labeling it as a marginally attractive mining destination. The combination of 3% royalty (for most of Namibia’s non-diamond mining operations) and 37.5% corporate tax, is simply too high. The combination firmly establishes Namibia as one of the highest taxed countries in the world for mining companies.

One of the mechanisms advocated by the Chamber is that the Minerals Bill should allow for a reprieve from the payment of royalty during lean times for the mining industry, We have the advantage of specifically for operations that have become unprofitable. We have the being able to learn from the advantage of being able to learn from the South African experience without South African experience. needing to copy-cat our neighbour. Credit is due to the Chamber of Mines of South Africa, for having fought for and gained an exemption clause for unprofitable operations. In November 2006, the SA government acquiesced to the Chamber’s advice, ending with a win- win situation for both government and the mining operations in South Africa. The combination of high corporate tax together with the revised royalty rates is sure to negatively impact on Namibia’s global competitiveness ranking.

Namibia’s Competitiveness Ranking Just how competitive is Namibia by world standards? Insight Magazine’s feature on Mining in Namibia states that Namibia is included in the World Economic Forum’s Annual World Competitiveness Ranking, based on its Global Competitiveness Index (GCI) South Africa has slid and Transparency International’s Corruption Perceptions Index (CPI). Namibia down the slippery slope of is also included in the World Bank’s “Doing Business 2005”. Although the competitiveness in the areas statistics were issued prior to the government’s recent declaration of revised of taxation, socio-economic agreements and labour royalties, Namibia’s CPI has fallen since 2001, but it improved in 2005. regulations. Namibia’s competitiveness ranking has also fallen in recent years as more countries have been assessed. The Insight feature goes on to describe South Africa’s slide down the slippery slope of competitiveness, especially in the arenas of taxation, socio-economic agreements and labour regulations. Namibia’s taxation regime is now significantly higher than that of South Africa.

Many see the umbilical cord joining Namibia to its past colonial masters as a tether that prevents Namibia from realising its goals of economic freedom and independence. They feel that until such page  2005-2006 eview R nnual A

ines time as the cord is severed, economic freedom will remain an elusive dream, overshadowed by a M

of bullying big brother. But there are also unique opportunities to be harvested from the geographic

and economic links to our neighbour. Our country is blessed with a common currency unit, a

hamber single border and a common customs union, with one of the global mining powerhouses. Capital C equipment and consumables so vital for our high tech mines flow freely across the border and infrastructure is of such a standard that most mining equipment is a matter of days away from our mines, while access to technology is merely two hours from our capital. But Behre Dolbear & Company’s perhaps the keenest opportunity lies in our ability to learn from our neighbour, ranking paints a gloomy picture of South Africa. as it finds its way down the rocky and challenging road of Black Economic Empowerment and socio-economic reform. According to Insight, Behre Dolbear and Company’s ranking of political risk to mining companies paints a gloomy picture of South Africa, stating that “its realignment of mining rights and the requirement that companies ‘sell’ an increasing percentage of their property ownership to Formerly Disadvantaged Groups, are thinly disguised forms of taxation”.

We need to sit back and critically examine the South African models with a view to learning from them, so that we can maximize our mineral potential to the benefit of all of the country’s citizens. No Mining and exploration is in a investors like to be told to give up 26% of their company to an already empowered boom phase but our industry individual or group of individuals. Mining is capital intensive and fraught with risk. has seen that exploration companies will take their Rewards and risk are equally high. Accordingly, competition for capital among money and run next door. mining and exploration companies is intense, and guided by the potential for return on investment. Mining and exploration is in a boom phase at the moment but our industry has seen that exploration companies will take their money and run next door if their investment is perceived to be more lucrative there. Therein lies Namibia’s unique opportunity. We need to ensure that we are just that much more competitive than our fellow African countries that are equally endowed with world class resources. We don’t yet have a Mining Empowerment Charter and we are currently reviewing the new Minerals Bill, through the Minerals Bill Committee, on which the Chamber is represented. These key pieces of legislation will dictate the future of our industry, and as our industry is the backbone of our country, they could very well determine the future of our country.

The Chamber believes it is possible to provide sufficient incentives to investors in mining and exploration to attract all but the most cautious, while still providing for the We have proposed a needs of the fiscus and of a people previously deprived of many of the rewards system of windfall taxation to the government and of the country’s very substantial mineral endowment. We have proposed a have offered to assist the system of windfall taxation to the government and we have offered to assist government to shorten the EPZ tail. the government to shorten the EPZ tail, whereby the incentives provided under the EPZ regime would still be a benefit to the mining industry but through the Minerals Agreement, as provided for in the Act. These benefits would be for a limited period, to be determined case by case, in order to facilitate recouping of the capital investment, whereafter page  2005-2006 eview R nnual A they would fall away and all applicable taxes would apply. Mining is historically a boom and bust ines M

industry, driven by sinusoidal cycles of commodity prices. We need to be certain that the non profit- of based taxation measures still allow our operations some breathing room to survive during the low

ebb in the cycle. Contrary to public perception, the Chamber is not opposed hamber

The profitability of our C to the principle of a royalty on gross sales, but we believe the combination of operations was eroded by the royalty and profits based tax should be both competitive and affordable. exchange rate.

Mining’s Contribution to the Economy The state of health of the mining industry is masked by the exchange rate between the Namibia dollar and the US dollar. In December 2004, when MME first imposed its non Mining value added as % of GDP diamond mining royalty, the local currency 20% 18% had almost doubled in value in a single year. 16% MME could not have chosen a worse time 14% to invoke the royalty tax on the industry. 12% Operational costs of mines increase year- 10% on-year at a rate that is typically well above 8% the CPI or the PPI. The reason for this is 6% most likely due to the price of mining capital 4% equipment, spares and consumables being 2% ever more scarce, in response to the supply 0% and demand balance, as we experience a 1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 Source:National accounts, Central Bureau of Statistics boom in mining globally.

The combination of increasing costs of between six and ten % (annually compounded) with an appreciating local currency, can result in a situation where many operations become marginal. This was the case in 2004 when the royalty was imposed and the trend continued into 2005 and the first quarter of 2006, as our statistics in this review demonstrate.

As the profitability of our operations was eroded by the exchange rate, so revenue We are likely to see a dramatic from taxation fell from nearly N$2.5 billion in 2002/2003 to around N$400 million increase in the value added in 2005/2006. Over the same period, non-diamond mining taxation fell to around contribution of non diamond mining to our economy. N$10 million, a clear sign that our mines were struggling to balance their books.

What stronger case can there be for the Chamber’s position that the government should consider the profitability of individual operations and allow for reprieve from the non-profit based royalty in situations of unaffordability?

2006 was a windfall year for our operations, translating to a dramatic turn-around from the losses experienced by many operations in 2004 and 2005. Commodity prices have reached unprecedented page  2005-2006 eview R nnual A ines levels for gold, copper, zinc and uranium. The boom in minerals and metals has largely been driven M

of by the blossoming of the dragon and tiger economies and their hunger for resources. As there seems

no let up in the growth of these economies, high commodity prices are likely to be a feature for

hamber some time to come. C

Although the contribution to GDP by diamond mining far exceeds that of non-diamond mining operations, we are likely to see a dramatic increase in the value added contribution of non-diamond mining to our economy. Value added from our industry has grown from N$1.084 billion in 1990 to N$3.576 billion in 2005. The ratio of contribution between diamond mining to non-diamond mining has shifted from 50/50 in 1990 to 90/10 in 2004 respectively according to Insight, as non-diamond mining operations battled to make ends meet in response to the strength of the local currency.

Mining exports represented just over 50% of total exports in 2004. This figure is likely to increase significantly over the 2005/2006 period.

The Energy Situation As the winter of 2006 approached, it became clear that Namibia would experience a shortage of power. Apart from the Ruacana hydro-electric plant which provides up to one half of the country’s electricity requirements, Namibia is dependent upon South Africa for the majority of its power. The Namibian high voltage reticulation is sourced from the Cape and is thus dependent upon the nuclear power plant at Koeberg. Eskom, the South African power utility, announced a failure in one of the nuclear reactors, unfortunately coinciding with the maintenance of the second reactor. Major load shedding strategies were implemented in the Cape and restrictions were placed on the quantity of power delivered to Namibia. NamPower proactively called for a meeting of major power consumers. Prior to this meeting the Chamber Council coordinated the industry’s approach to NamPower, ensuring that mining would be prioritized and, in the event of load shedding, ample warning would be given to our operations. Skorpion Zinc, which alone consumes up to 20% of Namibia’s power, was constantly in touch with both NamPower and Eskom as it carried out significant load shedding. Cooperation between the Chamber and NamPower resulted in very little inconvenience for our operations. page  2005-2006 eview R nnual A

The Chamber’s Burning Issues ines M of

The issue of royalty tax has absorbed much of the Chamber’s time over the past two years, as have our other “burning issues” of Black Economic Empowerment, Transfer Pricing, and Minerals

Beneficiation. hamber C

The Chamber has consulted extensively with the government on these issues, We have proposed making the position of our members clearly known. We wholeheartedly support our “seven pillars of and endorse the need for Broad Based Black Economic Empowerment as a means empowerment” and we trust government will take of realigning the distribution of wealth and strengthening the economic backbone our views into account as of our economy. We have proposed a multi-faceted, non prescriptive approach, it formulates the national policy on empowerment. termed our “seven pillars of empowerment”. We trust government will take our views into account as it formulates the national policy on empowerment.

We also fully support the government in its efforts to stamp out the practice of transfer pricing, which we do not tolerate among our member institutions.

We have attempted to demystify the issue of beneficiation, by demonstrating to Miners are not good the government that miners are not good manufacturers and manufacturers are manufacturers and not good miners and that there is a very clearly defined barrier, beyond which manufacturers are not good miners and there beneficiation is no longer the responsibility of mining companies, but thatof is a very clearly defined manufacturing companies. Manufacturing falls under the ambit of the Ministry of barrier, beyond which beneficiation is no longer Trade and Industry. We have proposed to Minister Nghimtina that a joint committee the responsibility of mining comprising of the Chamber of Mines, and the Ministries of Mines and Energy companies, but that of and Trade and Industry, should be set up to identify and recommend beneficiation manufacturing companies. opportunities for minerals and metals in Namibia. Although this committee has not yet been established, we remain committed to that process, but insist that it remains the domain of the manufacturing sector that is so poorly developed in our country.

The Chamber Establishes the Mine Rehabilitation and Closure Committee Another milestone for the Chamber has been the establishment in 2006 of the Mine Rehabilitation and Closure Committee. In the absence of governing legislation, Chamber members intend to ensure that the industry adopts the highest environmental and social standards for mine closure and rehabilitation. To this end, the first meeting of this committee took place in August 2006 and set as its main objective the establishment of minimum standards among Chamber members for mine closure, mine rehabilitation and after care.

The committee has set its own terms of reference within the context of minimum standards for our mining industry, ensuring that closure plans are site specific, and that they not only concentrate on environmental rehabilitation, but also take into account the often disastrous social implications of mine closure. It was decided at the first meeting of this committee, under the Chairmanship page  2005-2006 eview R nnual A

ines of the President of the Chamber, that all future meetings would take place on site at the various M

of operations. The first such site meeting, led by the committee’s newly elected chairperson, Mr Rainer

Schneeweiss, took place at Rössing mine in November 2006. Council looks forward to receiving

hamber the recommendations of this committee and the establishment of a set of minimum standards that C will govern the manner in which our members operate as responsible corporate citizens, and as world class mining companies.

The Chamber Sets Ethical Standards As part of its strategic planning refocus, the Chamber Council agreed upon The Chamber established various ethical standards expected of our members. In response to the ethical guidelines for the recruitment of personnel from shortage of skills in the region, the Chamber established ethical guidelines for within Chamber organisations. recruitment of personnel from within Chamber organisations, which will be incorporated into the Chamber’s charter as a policy document.

The Chamber Undertakes a Skills Needs and Supply Analysis In previous years the Chamber put together an analysis of the skills required by our industry at both the tertiary and artisan level. In its assessment of the threats to our industry, Council identified the shortage of available skills as one of the most critical issues that would influence the effectiveness of our industry in future years. Council identified that previous skills analyses were not as effective as they could have been, owing to the fact that any analysis would have to be dynamic, all embracing and continually updated to remain relevant. Council decided to appoint a professional consultant to this process, whereby the skills needs analysis would be complemented by an analysis of the students and artisans from each of the operations and from the government, already in training and that will be fed into our industry on an annual basis.

There is a clear need for the industry to coordinate its training and skills development across the board, balancing the requirement against the supply of graduates and artisans already in the process of obtaining their qualifications. Cognisant of the skills crisis, Chamber members have recently increased their commitment to training and skills development. Our members invest heavily in skills and in many cases operations are training more tertiary students (through universities and technikons) and artisans (through NIMT) than can be absorbed by their own companies. Clearly this creates an opportunity for other companies and especially newcomers, such as Langer Heinrich Uranium. The Ministry of Mines and Energy also provides bursaries, the product of which is often taken up by industry. The upgrading of skills is viewed as one of the main pillars of the Chamber’s empowerment policy. Pursuant to this, the Chamber invited the executive director of the Namibian Institute of Mining Technology to become a member of Council. Mr Müller’s contribution at Council meetings has dramatically improved the coordination of skills development and alignment of page 1 0 2005-2006 eview R nnual A training with the technical requirements at our operations. As part of the skills alignment process, ines M

the Chamber initiated ongoing reciprocal visits by NIMT lecturers and engineers from the mines of to NIMT and the mines. hamber C Namibian Institute of Mining Technology

The Namibian Institute of Mining Technology (NIMT) was founded shortly after independence in 1990. Located in the mining town of Arandis near Rössing mine, its mission is to provide the skilled artisans required by Namibia’s mining industry. Under the enduring leadership of Mr Eckhart Müller, NIMT has grown to a stage where, for the first time in 2005, it had taken in 900 trainees and produced 120 artisans over 12 trades. Of these trainees, 590 have bursaries. NIMT has a staff of 65 and all lecturers and training officers have completed the assessor training accredited by the South African Qualifications Authority (SAQA). It has a NOSA 5 star platinum safety rating. NIMT is governed by an independent board of trustees which meets three times a year. In 2005 it had a turnover of N$16 million.

Private Bag 5025, Swakopmund Tel: 064 510 126/138 Fax: 064 510 369 Email: [email protected] page 11 2005-2006 eview R nnual A ines The Chamber Supports Small Scale Mining M of

As mentioned in our previous review, support of the small scale mining sector has become an area of strategic focus for the Chamber. Rössing and Navachab mines have significantly contributed hamber to this process. We believe the Chamber has added and will continue to add much value to this C underdeveloped sector of our economy. Small Scale Mining is featured in this review.

The Chamber Carries Out a Strategic Planning Process

Council, at its meeting of 21 September 2005, made a decision to reassess its objectives and develop a mission and vision statement, and to critically examine its effectiveness, perceived status and level of service to its members.

The first strategic planning meeting of the Council took place on 23 February 2006 and was preceded by the Council meeting on the previous day at Okorusu mine. The workshop was moderated by Mr Bob Meiring and was attended by almost all Council members. Exploration companies were encouraged to participate in this process. During the first session, strategic issues affecting the mining industry and the Chamber were identified and discussed in detail, by way of a thorough SWOT analysis.

The second strategic planning session of the Chamber took place at Skorpion Zinc mine on the 30 September 2006. The objectives of the second session were to refocus the Chamber on a new mission/vision statement and to critically examine the SWOT analysis, by way of identifying strategies and actions, performance indicators and targets for each of the strengths, weaknesses, opportunities and threats.

Members were unanimous on the adoption of a new mission and vision statement.

Mission: To efficiently promote, encourage, protect and foster responsible exploration and mining in Namibia, to the benefit of the country and all stakeholders. Vision: To be acknowledged as the champion of the exploration and mining industry in Namibia.

Once strategies and actions, performance indicators and targets had been agreed upon, Council conducted its first litmus test of the Chamber’s effectiveness, with scores of red, orange and green attributed to the Chamber’s performance on each strategy/action. It was agreed that this test would be conducted at each Council strategic session, ensuring a process of continuous improvement at the Chamber.

The strategic planning process was considered a resounding success, but it is clear that there remain enormous challenges for the Chamber in the exciting and dynamic environment in which we operate. We believe we are up to these challenges and intend to relentlessly pursue our new goal…to promote, encourage, protect and foster responsible exploration and mining in our country, to the benefit of all stakeholders. page 12 2005-2006 eview R nnual A

I recently came across the national school curriculum’s version of mining in Namibia, as it is taught ines M

to school learners throughout the country. The information on mining was out of date by at least of twenty years. We shall ensure that as many schools as possible, as well as the Namibian Institute of

Educational Development, which is responsible for curricula in our schools, receive several copies hamber C of our review. Council is debating the establishment of a promotional video/DVD on mining that, if agreed to, would be shown at all schools. We hope to attract the best gems in the country to our exciting industry.

I wish to use this stage to acknowledge the professionalism, passion and dedication of my fellow colleague at the Chamber. Our new General Manager, Veston Malango, has taken on his tasks at the Chamber with such enthusiasm and commitment, I’m convinced that under his leadership, the Chamber can only grow from strength to strength. It has been an enormous pleasure for me to work with Veston.

The President’s review would not be complete without the acknowledgement of the input of one individual who undoubtedly has done so much for mining in Namibia.

Robin Sherbourne is an economist with a passion for Africa, intensely focused on using his enormous talents to assist our country and our continent to rise out of the quagmire of underdevelopment. He not only produces this review, but also passionately advises both the Chamber and the Government on matters of policy and economics. His magazine, Insight Namibia, has been heralded as the leading, award winning current affairs magazine. Robin’s unique manner of setting the stage for dialogue and discussion, by asking questions, but not proposing answers, has made us all a little more introspective about where we wish to see our industry in the future. Robin also recently authored and produced what is perhaps the most comprehensive and professional publication ever published about Nambia’s mining industry. Sponsored by the Minerals Development Fund of Namibia, entitled “Mining in Namibia: Past Performance, Future Prospects”, the publication contains everything the investor needs to know about mining in Namibia. It complements our annual review perfectly.

We at the Chamber are greatly indebted to Robin!

Mark Dawe President Chamber of Mines of Namibia November 2006 page 13 2005-2006 eview

R Feature The General Manager, Veston Malango, nnual discussed a wide range of issues affecting A

ines the mining industry in an interview with M of

insight magazine during 2006. hamber C “We are being proactive”

I: Aren’t government and the Chamber on a collision course over a number of big issues such as the mining royalty tax and value addition?

VM: I wouldn’t describe it as a collision course but we have a difference of opinion. I am optimistic it can be resolved.

I: But what room is there for compromise?

VM: The issue is not that the mining industry doesn’t want to pay royalty. That must be very clear. Our position is that we could pay royalty but then you have to look at the whole taxation system. Currently if you compare in the region our corporate tax is the highest at 37.5%. If you could look at a corporate tax rate that was much lower, then you could talk of imposing a royalty of between 1% and 5%.

I: Are you then in negotiations with government?

VM: We have agreed with MME what is the way forward to resolve the issue around the royalty tax. The Ministry has set up a committee headed by the Mining Commissioner which would invite operations to come and present and say why they cannot pay the royalty to that extent and to show the financial status of the operations. We have also agreed that the Chamber of Mines was to give the final presentation to the Minister to sum it all up. Now the importance of us coming last is because we appreciate the Minister doesn’t want to restrict the presentations to operating mines. page 1 4 2005-2006 eview R nnual A

The royalty tax is creating serious problems for exploration companies. We as the Chamber will ines represent the exploration companies. M of

I: But government has already pencilled in N$30 million from this tax in the budget! hamber

VM: Government is listening. It’s a question of how articulate we are as a Chamber to drive these C things home. My consolation is that we have such a wonderful working relationship.

I: You say you have a wonderful “If you expect the mining multinationals working relationship but from the to do the industrialisation for you then outside it looks more like the dialogue of the deaf? you are in for a big surprise.”

VM: Of course, the manner in which the tax was announced is something else. In fact industry was surprised and dismayed and immediately contacted the Office of the Mining Commissioner. The biggest consolation is the fact that the Minister admitted that it shouldn’t have been announced in the way it was and I think that is positive. I like to believe the Ministry erred just like anyone else.

I: But isn’t government working on a new tax in the new Minerals Act?

VM: That’s what I hear but a few weeks ago I received a letter from the PS of Mines inviting me to MME’s Minerals Bill committee to work on the current Minerals Bill which I understand is with the legal drafters. We’re going to relook at all these issues and to make sure that the interests of the industry are taken care of.

I: So is the Chamber convinced that the industry is doing as much value addition in Namibia as is economically viable?

VM: Unfortunately that is the perception that is out there. We are very much aware of it. One of our main challenges is to change that perception. There are a lot of myths about value addition. My job is to demystify value addition.

I: Well, let’s try and demystify it. Which mining operations in Namibia have the potential for greater value addition?

VM: That’s a good question. You have to look at it from the economic point of view. I’m now driving two concepts within value addition: mining beneficiation and manufacturing beneficiation. I’m simply saying there is an end line beyond which the mining industry cannot put anything further in terms of beneficiation. Anything that happens thereafter to our mineral products should be seen as manufacturing beneficiation.

“The Chamber supports all I: Does the Chamber believe there is potential for forms of beneficiation.” more cutting and polishing of diamonds in Namibia?

VM: The Chamber supports all forms of beneficiation. I was involved in the Diamond Act which paved the way for diamond cutting and polishing and I’m very proud of that piece of legislation. There is a concern that the cutting factories are struggling to get the rough they need.

I: Because government hasn’t invoked the relevant sections of the Diamond Act? All these companies have come here in the mistaken belief that they would have access to Namibia’s rough diamonds.

VM: If the cutting industry is to flourish there has to be rough. The sections you are referring to were meant to make provision for this. page 1 5 2005-2006 eview R nnual A ines I: So why hasn’t this happened? M

of “The Chamber has cautioned the VM: My understanding is that this is Ministry that it should not go along precisely what is being looked at in the

hamber the prescriptive South African route negotiations that are going on. Government C of empowerment.” is working on that. I’m not privy to the outcome. My understanding from the media is that there is a stalemate.

I: But does the Chamber believe potential exists?

VM: There is potential. But the point I’m making here supports my concept of mining and manufacturing beneficiation. Cutting and polishing is outside the ambit of mining companies. The point I’d like to make is that mining thrives on inherited comparative advantages – mineral resource endowment, land and low cost labour. Manufacturing thrives on competitive advantages – skills, knowledge, technology – which have got to be acquired or created. Our position is that we would like to assist the Ministry of Trade and Industry to advise how value addition based on our mineral products can be enhanced. Mining creates a platform for industrialisation.

I: But we’ve seen many countries with thriving mining industries, especially in Africa, not going that further step.

VM: That’s my point. If you expect the mining multinationals to do the industrialisation for you then of course you are in for a big surprise. You’ve got to bring in other multinationals who are traditionally in manufacturing and that will depend on your economic environment. And that environment is what we are saying to Trade and Industry, we want to help the government to create it.

I: You mentioned Ongopolo but we know things are not going well there. Has the company been run on business principles? Does it have a sustainable business future?

VM: I believe it has a future. We’ve got resources. We need to do much more exploration. The results of all the money and government guarantees are there for all to see at Otjihase exploration drilling and Kombat shaft sinking project which is now complete.

I: Isn’t the hard reality that Ongopolo was insufficiently capitalized when it was set up and we tried to do BEE on the cheap?

VM: Certainly Ongopolo needed much more money to do the exploration but who would give the money? My understanding is that government has sanctioned the deal between Ongopolo and Weatherly International. No one wants to see Ongopolo fail.

I: Is Weatherly a good strategic partner?

VM: Weatherly is not the best option but you see, we’ve got a precarious situation. It’s either Weatherly or Ongopolo falls down. Ongopolo is in such a situation that you can’t bargain from such a weak position. If Ongopolo had had discussions even six months ago I think we would have had a better deal.

I: From the outside the Chamber has always seemed a rather sleepy organisation with a very low public profile. As new page 1 6 2005-2006 eview R nnual A

GM will you do anything differently from your predecessors? ines M of VM: We are looking at a new Chamber. My position is that it has to be revamped to meet the challenges of today. The Chamber’s members are expecting much more than before. We want to be

proactive. We now have a Chamber website which makes information available. People are excited. hamber They phone me up from all over the world. Secondly the Chamber and government have no choice C but to work together in promoting Namibia. We made a resolution to promote Namibia jointly. This year we were there at the mining indaba in Cape Town for the first time ever and by the way we had a joint booth – government through MME and the private sector through the Chamber. It can’t be better than that! We are even sharing the costs. The thrust of the new Chamber is service delivery. I want the members to see that it pays to belong to the Chamber. I must tell you I’m very happy with the response that I’m seeing. I’m actually keeping people at bay from joining. I’m saying you wait until you get your mineral rights then I will table your application to the Chamber’s council. We are a very slim Chamber, but we are trying to do so much.

I: Are you happy with the performance of the Ministry of Mines and Energy? “We don’t want government to destroy what we have enjoyed since VM: It is very clear that Chamber members are not very happy with the independence.” performance of the Ministry. But when the industry says it is not happy it’s on one issue – licensing and the Office of the Mining Commissioner. It is the slow pace at which mineral rights are processed. On other matters such as geological data, it is world class. The Mining Commissioner has told us of the problems they are having. It starts with qualified staff to do the vetting of applications. His cry is that if he is given two or three additional qualified and experienced geologists, he can do wonders. We are asking government to recruit more qualified staff.

I: But isn’t the truth that you as an industry pinch all the people from the Ministry? Government pays to train all these people who then go off and get much nicer jobs with industry?

VM: I don’t think so. I think what industry does is good for government. The Mining Commissioner needs geologists who have experience in the field not young students straight out of university. The best the Ministry can do is to allow graduates to go on job attachments. That is what the Mining Commissioner needs. If government lets us do what we are doing right now we will take this country to greater heights. The investment climate as far as mining is concerned has been very good since independence. Our position is that we don’t want government to destroy what we have enjoyed since independence. The situation we are having with the royalty issue has the potential to basically disrupt the successes we have built to date.

I: You say we’ve been successful under the Minerals Act but the hard fact is we’ve only seen one new mine open.

VM: As a success factor you can use the number of mines opened since independence but that’s not the only factor. We’ve seen a lot of reinvestment in existing operations – Namdeb, Rössing, Okorusu, Navachab – which is basically like opening another mine! But coming back to your question, commodity prices we are enjoying now have stimulated interest in exploration but investors stayed back during periods of bottom metal prices. Another point which is rarely talked about is the issue of technology. Skorpion was not there because the technology was not there to extract zinc from an oxide ore body.

I: Is the industry putting enough money into bursaries?

VM: Yes big time. Rössing alone is funding over 80 bursaries at NIMT alone. We have a big shortage of artisans. The executive director of NIMT is now on the Chamber council. NIMT itself page 17 2005-2006 eview R nnual A ines is a product of the mining industry! The Chamber itself had to sell the residence of the General M Manager in an up market residential area and put the proceeds in an investment account. All interest of generated is used to finance bursary students at NIMT every year. We’ve got to do much more than before. There’s another threat. If we’re not careful we’ll even start losing our artisans to South

hamber Africa. C I: Does the Chamber have a view on how a BEE policy should be pursued by government?

VM: A few years back we were requested to draw up a mining charter. What the Chamber did then was to look at all aspects of empowerment. Consequently the Chamber has come up with what we are calling the seven pillars of empowerment: ownership, literacy and numeracy, education and training, employment practices, community development, procurement, and beneficiation. That proposal was presented to the Minister of Mines. In fact I have now been contacted by the PS of Mines to join the Ministry to refine the various ideas including ours to produce the mining charter. At the same time the Chamber has cautioned the Ministry that it should not go along the prescriptive South African route of empowerment. We’re privileged to be able to learn the lessons from South Africa. Whilst the intentions are good, from what we hear the results are not what was intended. Empowerment is driving away investment. But again we are being proactive because as you are aware there is no national policy and legal framework on BEE. The southern mines of Namdeb, Skorpion and Rosh Pinah together formed an association for driving empowerment through procurement. The Chamber has endorsed this initiative and together with MME, the Namibia Preferential Procurement Council was launched in early December 2005. My job is to encourage other Chamber members to join the NPPC because we believe it offers an excellent opportunity for empowerment. page 1 8 page 19 Chamber of Mines Annual Review 2005-2006 2005-2006 AngloGold eview R Ashanti nnual A

ines AngloGold Ashanti is the sole owner of Navachab mine near Karibib, M of Namibia’s only gold mine. Navachab is an open pit mine which produces gold bullion for export to the Rand gold refinery in South Africa. For more hamber C information go to www.anglogoldashanti.com page 2 0 2005-2006 eview R nnual A Production at Navachab reached 81,000oz in 2005 compared to 67,000oz in 2004. Although the ines

average gold price was below what had been budgeted during the first half of 2005, the second half M of of the year turned out much more favourably and the year ended with an average price of N$91,055 compared to a budgeted price of N$90,200. Combined with an increase in grade to 2.05g/t and a hamber

decline in cash costs to US$321 thanks to increased volumes, Navachab exceeded budgeted profits C by 50%. However, no tax was paid in 2005 due to the capital allowance arising from the N$138 million investment required to change to owner mining in the previous year.

Gold production is expected to rise to between 81,000oz and 85,000oz in 2006. • Gold price above US$500/oz throughout reporting period The main pit has reached its maximum depth of some 190m so mining is now taking place on the eastern side of the pit. A smaller satellite pit “Grid A” has been • Production up to 81,000oz in established which will allow higher grade ore to be blended with the lower grade 2005 from 67,000oz in 2004 from the main pit so that overall production can be maintained during the coming • Commenced with pit extension two to three years using a separate fleet of smaller 35 tonne haul trucks working a extending life of mine to 2013 day shift five days a week.

Navachab suffered three lost-time injuries in 2005 and has recorded four lost-time injuries to date in 2006. Navachab concluded two-year agreements with the MUN, the current one of which is due to expire at the end of 2006. One illegal two-day stoppage took place in June involving the handing over of a petition against certain company policies and conditions of service. These issues have now been taken up in the monthly meetings of management and unions.

Navachab currently has six bursary students studying mining related qualifications in South Africa. In addition the mine renewed its focus on training and development in 2005 starting a business understanding programme which aims to equip all employees with the skills that enable them to understand the business of gold mining.

Navachab carried out exploration within the existing mining licence area as well as in the five EPL areas held by AngloGold Ashanti. This included RC drilling, mapping, some diamond drilling and a high resolution magnetic survey. This will continue during the coming year and provision has been made for 30,000m of further drilling.

Navachab is in the process of implementing ISO14001 by the end of 2006 with accreditation expected to take place in the first quarter of 2007. This will lead to a further improvement of the mine’s environmental management system. page 21 2005-2006 eview R nnual A Navachab mine holds regular stakeholder meetings with the community, the last of which was held ines

M in April 2006 but no issues of concern were raised. The use of cyanide in the recovery of gold is of a core concern for the gold mining industry and is critical to its viability. AngloGold Ashanti was party to the development of the International Cyanide Management Code and was one of the first hamber

C signatories announced in November 2005.

Shareholders AngloGold Ashanti Ltd 100% Mines in Namibia Navachab gold mine near Karibib (ML31) Date of production start 1989 Latest life of mine estimate 2013 Output in 2005 2,519 kg (81,000oz) Permanent employees at end 2005 270 Contractors at end 2005 8 Expatriate employees at end 2005 4 Turnover in 2005 N$230.5 million Wages and salaries in 2005 N$40.1 million Fixed investment in 2005 N$44.9 million Exploration and prospecting in 2005 n/a Profits in 2005 N$15.9 million Corporate tax paid in 2005 Nil Related operations in Namibia None EPL999, EPL2691, EPL2858, EPLs at end of 2006 EPL3275, EPL3276 Safety ratings at end of 2005 4 star NOSA Affirmative Action plan approved yes Number of bursaries awarded in 2005 6 General Manager Mr Gerry Arnat Contact details PO Box 150, Karibib Tel: +264 64 552012 Fax: +264 64 550231 Email: [email protected] page 22 page 23 Chamber of Mines Annual Review 2005-2006 2005-2006 De Beers Marine eview R Namibia nnual A ines De Beers Marine Namibia is the marine prospecting and mining contractor M of for Namdeb’s Atlantic 1 concession. For more information go to www.namdeb.com or Namdeb Annual Review 2005 and hamber C “Twelve Important Facts About Knowing Us”.

De Beers Marine Namibia (DBMN) mined over 4.8 square kilometers in the Atlantic 1 concession area during 2005 producing a record 920,000 carats of rough diamonds compared to an original budget of 4.4 square kilometers and 820,000 carats. Mid-water concessions • Record production of 922,000 mined under contract by DBMN’s BEE partner EPIA contributed 29,600 carats to carats in 2005 outstrips land overall output to bring the total output to 950,000. The exceptional performance production for the first time ever in Atlantic 1 was mainly due to DBMNs significant improvements in efficiencies • OHSAS 18001 certification driven partly by implementation of R&D, an incentive bonus scheme and obtained for the first time. increased assets utilisation. DBMN currently operates five production vessels: mv Debmar Atlantic (14,952t), mv Debmar Pacific (14,952t), mv !Gariep (10,498t), mv Grand Banks(10,424t), and mv Ya Toivo. A feasibility study is in progress for an additional mining vessel which, if viable, will commence production in 2009. page 2 4 2005-2006 eview R nnual A Due to the complex nature of a patchy marine resource, significant vessel days (97 days) were spent ines

sampling during 2005 in an effort to develop the reserves to sustain the mining operations in the future. M of An attempt to sample areas covered under thick mud overburden was made. The results indicated that further technical development work on the sampling tool is required. DBMN achieved 5 star hamber platinum NOSCAR certification from the NOSA Integrated SeaSafe System, the International Safety C Management (ISM) certification and the Occupational Health and Safety Advisory Services (OHSAS) 18001 certification. A total of 4 lost-time injuries were recorded in 2005. The LTIFR was 0.32 for 2005. DBMN was recertified to ISO 14001 in December 2005 and initiated an environmental stakeholder engagement strategy to ensure that all stakeholders including the general public and employees of the company are aware of the importance of the company’s environmental research and its commitment to the environment. The existing Environmental Impact Assessment and Environmental Management Plan were updated for the pre-feasibility phase of the marine dredging project.

Labour relations continued to be characterized by an atmosphere of constructive engagement between management and the two joint unions, the Mineworkers Union of Namibia (MUN) and the National Union of Mineworkers of South Africa (NUM).

In September 2005 management and unions signed a revised Flexibility Agreement to regulate flexible work practices and to ensure that employees meet the operational challenges facedby the company. The agreement is critical in facilitating the adaptability and mobility of employees within and between departments. The company and unions concluded a two-year wage agreement in August 2005 covering the period 1 April 2005 to 31 March 2007.

DBMN supported a variety of community initiatives in Namibia through its Social Responsibility Committee. DBMN donated almost N$300,000 to projects involving education and skills training, the environment and community development.

De Beers 70% Shareholders Government of Namibia 30% Mines in Namibia None Established January 2001 Output in 2005 922,000 carats Permanent employees at end 2005 596 Contractors at end 2005 None Expatriate employees at end 2005 176 Related operations in Namibia None EPLs at end of 2006 None 5 star platinum certification with Safety ratings at end of 2004 NOSCAR status. OHSAS 18001 certification Affirmative Action plan approved yes Number of bursaries awarded in 2005 8 Managing Director Mr Otto Shikongo PO Box 23016, Windhoek Tel: + 264 61 297 8400 Contact details Fax: +264 61 297 8140 Email: [email protected] page 2 5 2005-2006 Langer Heinrich eview R Uranium nnual A ines Langer Heinrich uranium mine is owned by Paladin Resources which is listed M of on the Australian and Toronto stock exchanges. Langer Heinrich will shortly commence production of uranium oxide “yellow cake” for export to power hamber C utilities worldwide. For more information go to www.paladinresources.com.au

Langer Heinrich uranium mine is Namibia’s second uranium mine and the world’s first all new conventional uranium mine in two decades. The owner of Langer Heinrich is Paladin Resources which is listed on the ASX and TSX and has subsidiary listings on four regional exchanges in Germany. Paladin gained the mineral rights when it purchased the Namibian registered company Langer Heinrich Uranium (Pty) Ltd from Acclaim Uranium in August 2002. • Commissioning ahead of time and to budget of new US$92 Since then Paladin has spent US$92 million to get the mine operational in four million uranium mine years. Zero lost-time injuries were achieved in the construction of the mine. Construction was undertaken by engineering contractor GRD Minproc and a • Uranium prices reaching record range of subcontractors including Group 5 and Murray & Roberts led by project highs of US$72/lb at the time of going to press manager Jim Morgan. The mine was commissioned on 28 August 2006 – one page 2 6 2005-2006 eview R nnual A month early – and is due to start full-scale production by December 2006. Langer Heinrich will ines

produce 1,080 tonnes (2.6Mlb) of uranium oxide – UO4.H2O “yellow cake” – a year. The first M of contracted shipment of uranium oxide concentrate is expected to be shipped late in the first quarter of 2007 with production ramp-up reaching full capacity by the third quarter of the same year. hamber C Langer Heinrich will exploit a deposit with an ore grade of 0.08%, some three times higher than Rössing’s. In contrast to Rössing, the uranium ore is not contained in granite but in sediment making it much easier and less water intensive to mine. Langer Heinrich will employ an innovative alkaline rather than acid leaching process to separate out the uranium from the ore, the first time the process has been used on such a scale. In the past year Langer Heinrich conducted 11,000m of RC drilling over a 5km area to the west of previous drilling so that its inferred resource has increased by 52%.

The General Manager of the mine is Canadian national Wyatt Buck who previously worked for Canada’s Cameco at McArthur River and Key Lake, among the largest uranium mines in the world. Langer Heinrich is planning to achieve ISO14001 certification next year and has already established a community information forum which holds meetings every quarter in Swakopmund and Walvis Bay.

Shareholders Paladin Resources (Pty) Ltd (100%) Mines in Namibia Langer Heinrich ML140 Date of production start December 2006 Latest life of mine estimate 2023 Output in 2005 0 Permanent employees at end 2005 20 Contractors at end 2005 550 Expatriate employees at end 2005 2 Fixed investment in 2005 N$580 million Managing Director Garnet Halliday General Manager Wyatt Buck PO Box 156, Swakopmund Tel: +264 64 403 670 Contact details Fax: +264 64 403 659 Email: [email protected] page 27 2005-2006 eview R Namdeb nnual A

ines Namdeb is a 50:50 partnership created in 1994 between De Beers and the M of Government of Namibia. Namdeb has long-term mining concessions in the south west of Namibia both on land, adjacent to the Orange River and hamber C offshore. All Namdeb’s rough diamonds are sold to De Beers’ Diamond Trading Company where they are sorted, mixed and sold to sightholders and to other buyers through Diamdel. Namdeb owns 30% of De Beers Marine Namibia, which mines its offshore Atlantic 1 concession, and 100% of NamGem in Okahandja which cuts and polishes diamonds bought from the DTC with the assistance of a technical partner Lazare Kaplan International. For more

information see Namdeb’s Annual Review 2005 or go to www.namdeb.com or www.debeersgroup.com page 2 8 2005-2006 eview R nnual A ines M of

hamber C Namdeb’s annual review for 2005 was entitled “Ten Million Carats by 2010” signaling the company’s intent to raise average annual production levels above those achieved since 1990 in the face of declining land reserves. At 1.8 million carats, production in 2005 was marginally down on the 1.9 million produced during the record year of 2004. However, for the first time ever more diamonds were mined from the Atlantic 1 concession – 922,000 carats – than elsewhere thanks to the efforts of De Beers Marine Namibia and its shallow water contractor Epia. Demand for rough diamonds is expected to remain strong over the coming year. However, given the current high levels of debt in many of the world’s cutting centres, price increases are likely to be nominal. During 2006, Namdeb will be investing for the future and plans significant expenditure on new capitalas well as research and development.

Namdeb holds six mining licences: Mining Area 1, Bogenfels and Elizabeth Bay • Diamond sales maintained at N$4 billion licences, which extends from the Orange River in the south to Lüderitz in the north and from a few kilometers offshore in the Atlantic Ocean to between 20km • Offshore diamond mining and 35km inland; Douglas Bay, which extends north of Lüderitz for some 60km exceeds onshore for the first time ever and approximately 15km inland of the Atlantic high-water mark; Orange River, which extends along the Orange River for about 50km inland from the Mining • Excellent performance from Area 1 boundary; and Atlantic 1 which encompasses a portion of the middle Orange River mines shelf of the Atlantic Ocean from the boundary of Mining Area 1 to about 65km • from the shore. Namdeb is currently investing in a variety of new techniques and Further improvement in overall safety technologies to extend the life of its onshore operations. • ISO 14001 certification retained A shallow water marine dredging trial was carried out in Chameis Bay. In January and February 2005 the vessel mv Phillipo Bruneleschi, was hired from international dredging contractor Jan de Nul to dredge and pump 500,000t of shallow water mineralized gravel to paddies for treatment at the Pocket Beach Site 2 plant. The main objectives of this trial – pipeline construction and positioning, dredging cleanup, pumping and reclamation, the assessment of its environmental impact and the removal of the pipeline – proved successful. Subsequent approval was granted for a larger scale trial project in the Atlantic 1 licence area which involves dredging from the Atlantic 1 area using the Jan de Nul vessel mv Vasco da Gama as well as the design and construction of a treatment plant and infrastructure to recover diamonds from the dredged material. The information gathered from this trial will form the basis of a feasibility study into the long-term viability of marine dredging.

The seawalker platform was tested as a secondary mining system prototype in the dredge pond for 2005. The objective was to determine the effectiveness of this type of wet mining method compared page 2 9 2005-2006 eview R nnual A to the conventional bedrock bulk excavation and cleaning method. ines

M The Jet Rig Platform operated as a sampling tool in the Inter Tidal Corridor in 2005 where three of sample panels were successfully completed. hamber

C The Elizabeth Bay Resource Extension project was handed over to the production team but ramp- up progressed slower than anticipated.

The Pocket Beaches Mine Phase 2 project aims to mine the deposits at sites 11 and 12 in 2007. High levels of confidence have now been achieved in the estimate and the technical aspects of the cut-off wall concept where the greatest project risk lies. Approval for this N$217 million project was granted in August 2005.

The Optimised Recovery By Innovative Technologies (ORBIT) project aims to increase the processing rate of the recovery tailings by a factor of five using innovative technologies such as wet X-rays and optical sorters. This fast track project was approved at the beginning of 2005 and commissioned in December 2005.

Namdeb recorded 4 million fatality free shifts since the last fatality occurred in February 2002. During the last reporting period, Namdeb recorded 2.13 its lowest ever lost time injury severity rate and a 65% improvement against the previous year. All of Namdeb’s operations have been audited on the NOSA integrated safety, health and environmental system and all three operations achieved 5 star platinum grading and NOSCAR status. Mining Area No 1 retained its third consecutive NOSCAR, Orange River mines their seventh and Elizabeth Bay mine its eighth. All three Namdeb operations were listed in the International Top 100 for world class Safety, Health and the Environment (SHE) performance.

Notwithstanding a near one hundred year history of mining in Namibia’s mega-placer diamond deposit, Namdeb and its partners continued to conduct extensive exploration and evaluation sampling operations throughout its mineral licences.

In central and southern Mining Area 1, a recently purchased large diameter bucket auger drill is being used to evaluate beaches in areas of accreted shoreline. The same tool will be used to sample diamond resources contained in the 60 to 80 million ton tailings dumps for future retreatment operations. A specially designed mobile sampling unit, the “Jet Rig” is being used to explore the inter- tidal and surf zone areas bordering the conventionally-mined linear beaches of Mining Area 1. page 3 0 2005-2006 eview R nnual A Drilling of the Meso-age fluvial deposits of the ines

Orange River was started, while planning of a M of second phase of evaluation sampling of the Proto- age Sendelingsdrif deposit is underway. hamber C In Mining Area 1, mining licence extensions to the known resources at the Elizabeth Bay and Pocket Beaches Mines are being investigated while exploration and evaluation sampling continues in the deflation valleys of those licences and the Douglas Bay licence.

Prospecting for primary kimberlite-hosted diamond deposits was started in the Caprivi in northern Namibia where an aeromagnetic survey was flown over a reconnaissance licence area RL 84.

Namdeb maintained constructive relationships with its employees and social partners. No work stoppages or labour unrest was experienced during 2005 and a two-year wage agreement was reached. Namdeb spent over N$18 million on employee training and development programmes which has four main components: technical training and skills upgrading, supervisory and management training, university bursaries, and assistance with self-study. Namdeb awarded eight university bursaries bringing the total to 46.

Most of Namdeb’s operations are located in the Namib desert far from any human settlements. However, through its Social Fund, the company invests over N$2.5 million a year in community projects aimed at improving social welfare, access to basic services, education, health as well as promoting arts and culture. Namdeb is committed to contributing to the sustainable development of the communities in which it operates and has adopted a range of policies and programmes to achieve this. In order to secure the sustainable future of Oranjemund, a special purpose company Oranjemund Town Management Company (OTMCo) was established to manage the issues relating to the future of the town once mining has ceased. Namdeb also created a special purpose vehicle, the Oshipe Development Fund to support the development and growth of Small and Medium- sized Enterprises in Namibia, through financing, equity participation, and business, technical and managerial support services.

Namdeb’s Environmental Management System (EMS) was audited by the South African Bureau of Standards (SABS) during September 2005. The EMS continued to comply with the ISO 14001:1996 requirements and great progress has been made towards upgrading to the ISO 14001:2004.

Namdeb supports the economic beneficiation of minerals in Namibia in order to contribute towards skills development and job creation in line with the Government’s national development objectives. page 31 2005-2006 eview R nnual A For this reason, Namdeb continues to invest in NamGem, its cutting and polishing factory in ines

M Okahandja. The presence of a skilled and experienced technical partner in the form of Lazare of Kaplan International is already proving its worth with production rising by 42% in 2005 to 24,000 rough carats. Operational capacity improved and a new preparation unit for planing and sawing was hamber

C introduced which allows the company to prepare its own goods.

Namdeb’s shareholders are currently reviewing the marketing agreement that forms the basis for their 50:50 partnership. page 32 2005-2006 eview R nnual A ines M of

hamber C

Government of Namibia 50% Shareholders De Beers 50% Orange River (ML42) Mining Area 1 (ML43) Bogenfels (ML44) Concessions in Namibia Elizabeth Bay (ML45) Douglas Bay (ML46) Atlantic 1 (ML47) Midwater (ML 128 A, B and C) Since the 1920s Date of production start Orange River 1990 Latest life of mine estimate From 5 to 25 years Output in 2005 1,774,409 carats Permanent employees at end 2005 2,956 Contractors at end 2005 130 Expatriate employees at end 2005 55 Turnover in 2005 N$4,000.0 million Wages and salaries in 2005 N$567 million Fixed investment in 2005 N$216 million Exploration and prospecting in 2005 N$34.5 million Profits in 2005 N$122 million Corporate and royalty tax paid in N$610 million 2005 De Beers Marine Namibia NamGem Diamond Cutting and Manufacturing Related operations in Namibia Company DTC Namibia Diamdel Namibia EPL2226, 2227, EPLs at end of 2006 EPL (Caprivi) 3605, 3606,3607, 3608, 3609, 3610, 3611 Safety ratings at end of 2004 5 star platinum NOSCAR Affirmative Action plan approved yes Number of bursaries awarded in 2005 8 bringing the total to 46 Managing Director Ms Inge Zaamwani General Manager Mr Chris Sivertsen PO Box 1906, Windhoek Tel: +264 61 204 3333 Contact details Fax: +264 61 204 3334 Email: [email protected] page 33 2005-2006 eview R Okorusu Fluorspar nnual A

ines Okorusu Fluorspar mine near Otjiwarongo, owned and operated by chemicals M of and pharmaceuticals giant Solvay, is an open pit mine producing 97.5% pure acid grade fluorspar for export to Solvay’s plants in Germany and Italy, where hamber C it is turned into hydrofluoric acid for use in the production of refrigerants, plastics, chemicals and pharmaceuticals. For more information go to www. solvay.com or www.solvayflour.com page 3 4 2005-2006 eview R nnual A Production at Okorusu mine has been increasing significantly in both quantity ines

and quality since Solvay bought the operation in 1997. In 2005 Okorusu M of produced 114,886wmt of fluorspar of 97.5% purity, placing it among the world’s top four producers of acid grade fluorspar and Namibia’s largest bulk hamber

exporter overseas. This impressive performance can largely be put down to C unique breakthroughs in metallurgical processing technology, combined with advanced ore blending techniques. Of this output, Okorusu sold 42,000wmt to the Solvay plant at Porta Maghera in Italy and the remaining 71,000wmt to the Solvay plant at Bad Wimpfen in Germany. The price paid by Solvay was some 7% higher than in 2004. Through its continued success, Okorusu has almost completed the repayment of its Sysmin and Minerals Development Fund loans of N$22.5 million.

The world acid grade fluorspar market has been strengthening each year since the late 1990s, primarily owing to the fact that China is consuming ever greater amounts of domestic production. The Chinese government continues to impose an export licence fee on external sales of Chinese fluorspar, which has helped stabilize the fluorspar market in the rest of the world. Although prices have firmed slightly in 2006, further increases are likely to be countered by the debottlenecking of several operations and the possibility of two or more large new mines coming on stream. Production at Okorusu is on target to reach 127,000wmt ranking it as the third largest fluorspar mine in the world with Solvay Fluor ranking number two in the world for fluorine production.

Okorusu holds three EPLs in Namibia but exploration in 2005/06 was severely • Further increase in production curtailed for cashflow purposes. Since the mine has not enjoyed the same to 114,886 wet metric tonnes (wmt) in 2005 from 104,767wmt price rises as precious and base metals or uranium, the strength of the local in 2004, with 127,000 tonnes currency has impacted negatively on profitability, despite major improvements targeted for 2006 in production. • Further technological breakthroughs in mineral Okorusu lost a NOSA star in August 2005 due to procedural weaknesses. separation resulting in higher mineral recoveries and However, the fifth star was regained in August 2006. Two disabling injuries even purer concentrates were recorded for the year. Labour relations at the mine remained good with no disputes and no industrial action taking place during the year. Okorusu plans to award two bursaries at the tertiary level and four bursaries to NIMT in 2006. The company continues to be the main sponsor of the Occupational Health and Educational Awareness Programme (OHEAP), along with Pact, a US NGO. Okorusu founded OHEAP under the auspices of the Chamber of Mines in 1999.

Okorusu continues to sponsor a variety of community based projects in Otjiwarongo and in the Otjozondjupa region and has entered into a cooperation agreement with the Otjiwarongo Municipality. This unique agreement allows Okorusu to be represented on the Town Council Social page 3 5 2005-2006 eview R nnual A Upliftment Board which will decide upon focus areas for financial support. Okorusu is also about to ines

M implement a Community Trust Fund, to be jointly administered with the local authorities. Okorusu of continues to sponsor the communications system for the region’s ambulances as well as the radio relay station for the farming community. hamber C The mine operates an Environmental Rehabilitation Fund, which sets aside N$0.50 for every tonne milled. The Environmental Management Plan is managed by an independent consultant with meetings taking place every quarter.

Okorusu and Marburg farms, on which the mine operates, were expropriated by the Namibian Government in December 2005, as part of its policy to accelerate the process of commercial land reform in the country. Okorusu had attempted to purchase the farms and to donate them to an employee trust owned and managed by the workforce. However, the Ministry of Lands and Resettlement chose to expropriate the farms and use them for resettlement. page 3 6 2005-2006 eview R nnual

Shareholders Solvay Fluor (100%) A

Okorusu Fluorspar mine near Otjiwarongo ines Mines in Namibia (ML14/2/3/2/90) M of Date of production start 1988 Latest life of mine estimate 2014

114,886t (9% moist, 97.5% pure CaF filter cake hamber Output in 2005 2 concentrate) C Permanent employees at end 2005 249 Contractors at end 2005 10 Expatriate employees at end 2005 4 Turnover in 2005 N$94.8 million Wages and salaries in 2005 N$17.8 million Fixed investment in 2005 N$9.9 million Exploration and prospecting in 2005 N$0.138 million Profits in 2005 Nil Corporate tax paid in 2005 Nil Related operations in Namibia None EPL2724 (Okorusu) EPLs at end of 2006 EPL 2725 (Omburo) EPL 3095 (Aes) Safety ratings at end of 2005 4 star NOSA Affirmative Action plan approved Yes 4 artisans (NIMT) Number of bursaries awarded in 2005 2 tertiary education (Wits, Unam) Managing Director Mr Mark Dawe PO Box 1236, Otjiwarongo Tel: +264 67 305 404 Contact details Fax: +264 67 305 403 Email: [email protected] page 37 2005-2006 Ongopolo Mining eview R and Processing nnual A

ines Ongopolo Mining and Processing mines copper at Otjihase, Matchless, M of Kombat, Tsumeb West, and Tschudi mines in Namibia and smelts concentrates from these mines and also copper concentrates from other mines in Zambia hamber C and the DRC at its smelter in Tsumeb to produce blister copper for export to world markets. For more information go to www.weatherlyplc.com page 3 8 2005-2006 eview R nnual A A turbulent period for Ongopolo Mining and Processing ended when Weatherly International’s ines

offer to buy 97% of the company received the blessing of Namibia’s High Court on 17 July 2006. M of By that stage, however, Ongopolo had already been under Weatherly management since April. Under the company’s previous management and shareholders, Ongopolo had run into a severe hamber cash flow crisis which eventually led it to approach the Namibian Government for a loan guarantee C of N$70 million which was granted in September 2005, but on condition that the company find a suitable equity partner. Ongopolo management claimed the company was being held back by a combination of unexpected water problems at its new Asis Far West shaft and a hedging programme which meant it could not benefit from higher copper prices. Limited production from its existing operational mines, Otjihase, Kombat and Matchless, was insufficient to maintain viable throughput at the smelter.

Weatherly International, which listed on the Alternative Investment Market (AIM) • Takeover of Ongopolo by in London on 15 December 2005 raising £2.345million gross, is a relatively new Weatherly International plc completed company led by two key personalities Rod Webster and Dr Wolf Martinick. At that point Weatherly had acquired one major interest Puku Minerals Ltd in • Refurbishment of Smelter Number 1 completed Zambia which holds the licence to the closed Luanshya underground copper mine and tailings dam on the Zambian copper belt. Weatherly raised a further • Copper prices above US$5,000 £3.75 million net on 28 July following the deal with Ongopolo which gave the per tonne during the reporting period group a cash balance of £13.5 million.

Weatherly’s US$30 million deal with Ongopolo saw it pay US$9 million in cash to key lenders to Ongopolo and issue 47 million shares to convert all outstanding debt into shares in Weatherly International. Following the deal, Bank Windhoek and the Government Institutions Pension Fund, which were among the most significant lenders to Ongopolo, ended up owning 10.24% and 4.15% respectively in Weatherly International, while other lenders – the Minerals Development Fund and Standard Bank – decided they could or would not take up equity. The remaining US$20 million is to be injected into Ongopolo to fund its rejuvenation.

Weatherly’s strategy over the next 18 to 24 months is to raise production at Otjihase through a combination of backfilling and pillar recovery as well as surface mining and to establish mining operations at Tschudi. Tsumeb West, Kombat and Matchless mines are under care and maintenance for the time being. Additional concentrates trucked from Zambia and the DRC will enable the company to exploit the refurbished smelter capacity to the maximum. Exploration activities at the Asis Far West shaft are continuing

The last year has been dominated by the precarious financial position of Ongopolo and the takeover by Weatherly International. Production targets were not achieved during the year and, with the exception of the Asis Far West exploration shaft, no significant exploration was undertaken.

Ongopolo subscribes to NOSA but no audit was carried out in 2005 so the previous NOSA star page 3 9 2005-2006 eview R nnual A ratings – 5 stars for the Tsumeb smelter and Kombat mine, 4 stars for Otjihase and 3 stars for ines

M the Tsumeb operations – were retained. One fatality occurred during 2005/06 and the company of recorded seven reportable injuries, 14 disabling injuries and 53 minor injuries. Labour relations remained calm throughout this turbulent period. hamber C Ongopolo awarded only two bursaries during 2005 but under Weatherly the company’s entire education, training and skills development programme is in the process of being revamped.

Weatherly contracted Synergistics Environmental Services to carry out environmental audits of all the company’s operations. These audits showed that all operations are currently operating within the limits imposed by current environmental policy and legal requirements.

Shareholders Weatherly International plc 97% Employee trust 2% Original shareholders 1% Mining licences in Namibia Mining licenses: 14/2/3/2/32E: Uris 14/2/3/2/1: Berg Aukas 14/2/3/2/24B: Berg Aukas 14/2/3/2/21: Harasib 14/2/3/2/48: Khusib 14/2/1/4/2/1496: Valencia 14/2/3/2/32A: Tsumeb West 14/2/3/2/32D: Tsumeb 14/2/3/2/125: Tschudi 14/2/3/2/15: Bobos Silica 14/2/3/2/31A: Kliplime 14/2/3/2/32C: Gross Otavi 14/2/3/2/32B: Asis 14/2/3/2/9: Asis Ost 14/2/3/2/16: Asis West 14/2/3/2/3: Friedenhau (Matchless) 14/2/3/2/10: Otjihase 14/2/3/2/22: Otjihase Date of production start Otjihase Mine: 2000 Matchless Mine: 2005 Kombat Mine: under evaluation Tsumeb West Mine: 2007 Tschudi Mine: 2007 Ongopolo Processing Limited (Smelter): 2000 Latest life of mine estimate Otjihase Mine: 5 years Matchless Mine: 8 years Kombat Mine: under evaluation Tsumeb West Mine: 5 years Tschudi Mine: 5 years + Output in 2005/06 Blister Copper: 21,699.22t (captive 8,055.31t) Silver: 34,101.52kg Gold: 142.42kg Arsenic Trioxide: 50.17t Lead bearing material: 837.70t Pyrite: 8,457.33t page 40 2005-2006 eview R nnual A Permanent employees at end 2005/06 903 ines Contractors at end 2005/06 52 M

Expatriate employees at end 2005/06 11 of

Turnover in 2005/06 N$328.7 million Wages and salaries in 2005/06 N$90. 8 hamber

Fixed investment in 2005/06 Nil C Exploration and prospecting in 2005/06 N$40.4 million Profits in 2005/06 A loss of over N$300 million is expected Corporate tax paid in 2005/06 Nil Related operations in Namibia Ongopolo Processing EPZ EPLs at end of 2006 EPL14/2/1/4/2/132: Tsumeb EPL14/2/1/4/2/367: Otjihase EPL14/2/1/4/2/1776: Tsumeb EPL14/2/1/4/2/2906: Tsumeb EPL14/2/1/4/2/3066: Tsumeb EPL14/2/1/4/2/3136: Elbe EPL14/2/1/4/2/3277: Khorixas EPL14/2/1/4/2/3374: Otavi Safety ratings at end of 2004 Tsumeb Smelter: 5 Stars Kombat Mine: 5 Stars Otjihase Mine: 4 Stars Tsumeb Operations: 3 Stars Affirmative Action plan approved yes Number of bursaries awarded in 2005 2 Managing Director Mr Rod Webster Contact details PO Box 40, Tsumeb Tel: +264 67 223 4201 Fax: +264 67 223 4231 Email: [email protected] page 4 1 2005-2006 Rosh Pinah eview R Zinc Corporation nnual A

ines Rosh Pinah, majority owned by Kumba Resources (now Exxaro) of South Africa, M of is an underground mine producing zinc concentrate for export to Kumba’s Zincor refinery in South Africa and lead concentrate for export to world hamber C markets. For more information go to www.kumbaresources.com. page 4 2 2005-2006 eview R nnual A ines M of

hamber C

Since the mining licence of Rosh Pinah reverted to the Government of Namibia which then awarded it to PE Minerals at the end of 1995, Rosh Pinah mine has been operated by Kumba Resources (formerly Iscor) under an arrangement that sees a royalty paid to PE Minerals. This royalty has been ploughed back into exploration at the mine ever since PE Minerals purchased a 6.1% stake in the company in 2003. Production at the mine has increased rapidly in the past few • Further increase in production of years but the company is struggling to delineate sufficient deposits to maintain zinc concentrate to 126,123t in 005 from 123,272t in 2004 this production. A concerted increase in exploration commenced in early 2005 with the aim of extending the life of mine which at that stage had declined to just • Further extensive exploration four years. The exploration drilling programme achieved 38,300m by the end of drilling 2005 and 11,000m of tunnel. This effort paid off and the resource increased from 5.87 to 6.89 million tonnes. For 2006 42,000m of additional drilling has been planned with the aim of extending the life of mine beyond 2015. A regional exploration strategy is being formulated for both zinc and copper to support the aim of extending the life of mine.

Rosh Pinah has traditionally participated in the NOSA system of safety certification. During the past year Rosh Pinah recorded four lost time injuries but went on to obtain Occupational Health and Safety Advisory Services (OHSAS) 18000 certification as well as ISO 14000 integrated certification. Dust has presented a particular environmental problem in Rosh Pinah which is being addressed by watering the roads more frequently.

An unfortunate strike over wages in November 2006 lost the mine two weeks of production. Despite this, labour relations during the year were conducive and mature which can be attributed to change management initiatives such as the High Performance Culture (HPC) and Voice of the People initiatives which are aimed at enhancing transformational leadership, empowering people, stimulating creativity and reducing conflict and the number of grievances.

Rosh Pinah runs an ongoing supervisory skills development programme in support of its HPC. Technical and formal training is ongoing and study loans are made available to employees. The company currently supports six external bursaries and will support a further six in the coming year. page 4 3 2005-2006 eview R nnual A Rosh Pinah mine makes a significant contribution to the improvement of living conditions in the ines

M town of Rosh Pinah. The infamous Sands Hotel is in the process of being relocated. Donations of were made to Tsumkwe M’kats and Hoeksteen Primary School in the form of school uniforms and additional classrooms and have also upgraded the police station and jail. The tarring of the road hamber

C from Aus has now been completed making travel to the mine much easier and safer. page 44 2005-2006 eview R nnual A ines M of

hamber C

Shareholders Exxaro Resources 89.5% Rosh Pinah Mine Holdings 4.4% PE Minerals 6.1% Mines in Namibia Rosh Pinah zinc and lead mine ML14/2/3/2/39 (licence held by PE Minerals) Date of production start 1968 Latest life of mine estimate 2012 Output in 2005 126,123t zinc concentrate 24,690t lead concentrate Permanent employees at end 2005 523 Contractors at end 2005 277 Expatriate employees at end 2005 11 Turnover in 2005 N$415 million Wages and salaries in 2005 N$82 million Fixed investment in 2005 n/a Exploration and prospecting in 2005 N$22 million Profits in 2005 N$40 million Corporate tax paid in 2005 Nil Related operations in Namibia None EPLs at end of 2006 EPL2265, 2616, 2755, 2763, 2765, 2771 Safety ratings at end of 2004 4 star NOSA Affirmative Action plan approved No Number of bursaries awarded in 2005 None Mine Manager Mr Christo Aspeling Contact details Private Bag, Rosh Pinah Tel: +264 63 274 318 Fax: +264 63 274 223 Email: [email protected] page 45 2005-2006 Rössing eview R Uranium nnual A

ines Rössing Uranium, majority owned by Rio Tinto plc, is Namibia’s main uranium M of mine and is the world’s largest open pit uranium mine. Rössing produces uranium oxide for sale to power utilities in countries which are signatories of hamber C the Nuclear Non-Proliferation Treaty. For more information go to www.Rössing.com, Rössing’s 2005 Report to Stakeholders, or www.riotinto.com. page 46 2005-2006 eview R nnual A For the past few years Rössing mine has been ines

operating very much in survival mode. However, the M of change in the international climate for nuclear power and the steady and sustained increase in uranium hamber

oxide prices that world markets have experienced C during the past few years led to the green light being given to a US$112 million mine expansion project at the end of 2005. With this approval the mine moves from survival to growth and production which will see new mining equipment and a refurbished processing plant returning the mine to full production capacity of 4,000 tonnes a year within the next two years adding 150 new jobs. Already in 2005 Rössing mine produced 3,711 tonnes of uranium oxide – more than at any time since 1990 – despite a two week outage as a result of problems in the processing plant. However, mining is currently constrained by high stripping rates so production during 2006 will be similar to 2005 with the rise to 4,000 tonnes expected to take place in 2007. • Approval of US$112 million life of mine expansion project extending the life of mine from Major exploration work has been carried out in and around the current open pit 2009 to at least 2016 during the past three years as part of the life of mine expansion project. Rössing is budgeting N$10 million a year for the next two years to a detailed drilling • Uranium oxide prices average programme around the mining licence area. Rio Tinto Mining & Exploration US$36.25/lb in 2005 holds a number of EPLs in the Erongo and Kunene regions. • Uranium oxide prices peaked at US$62.50/lb in November 2006 The year 2005 ended with a total of eight lost time injuries including one fatality • Rössing celebrated 30 years of in March, five medical treatment cases and 12 first aid cases. Although the total production in 2006 of 25 lost time injuries was the lowest in the mine’s 30 years of production, the severity rate increased due to the seriousness of the injuries. Rössing remains • Rössing achieved its highest production since 1990 committed to achieving zero injuries.

Labour relations at the mine were good although the salary negotiations were interrupted by a peaceful demonstration and the handing over of a petition to management. Several labour disputes between the company and current and former employees are ongoing.

Rössing mine created a new Department of Improvement and Training in 2005 which aims to increase the capacity and potential of employees. A number of new programmes were launched including the Front Line Leadership Programme, bursaries, job attachments, correspondence courses and scholarships. By the end of 2005 187 employees and students were participating in page 4 7 2005-2006 eview R nnual A these programmes. A number of employees were seconded to Rio Tinto locations overseas to gain ines

M experience of other company operations. of

The Rössing Foundation undertook a variety of programmes at Arandis aimed at building the hamber

C capacity of the town council, local organisations and individual residents including programmes dealing with education and training, agriculture, tourism and business development as well as local government and infrastructure. A comprehensive socio-economic baseline study was carried out in 2005 which will be used as the basis for planning and further interventions.

For several years Rössing has implemented a thorough Environmental Management System (EMS). ISO14001 certification was granted already in February 2001. Since then the mine’s EMS has been regularly audited by an independent organisation, Bureau Veritas Quality International. Three audits were carried out in 2005 and, although a number of findings were reported, certification was maintained. The mine is currently running a number of monitoring programmes covering energy usage, greenhouse gas emissions, and radiation and dust exposure.

A stakeholder forum was established in early 2005 and several meetings have been held since. Rössing, which consumed over three million cubic metres of water in 2005, also adopted a water strategy and developed a water management plan to achieve a number of objectives including reduction in water consumption. The life of mine extension plan includes further measures designed to reduce fresh water consumption. The mine continues to run a project on groundwater resources and water quality with members of the Swakop River community. page 48 2005-2006 eview R nnual

Shareholders Rio Tinto plc 69% A

Government of Iran 15% ines IDC of South Africa 10% M Government of Namibia 3% of Local individual shareholders 3% Mines in Namibia Rössing mine (ML14/2/3/2/28)

Date of production start 1976 hamber Latest life of mine estimate 2016 or later C Output in 2005 3,711 tonnes Permanent employees at end 2005 860 Contractors at end 2005 510 Expatriate employees at end 2005 11 Turnover in 2005 N$926 million Wages and salaries in 2005 N$197 million Fixed investment in 2005 N$37 million Exploration and prospecting in 2005 Nil Profits in 2005 N$34 million Corporate tax paid in 2005 Nil Related operations in Namibia None EPLs at end of 2006 EPL3251 (Rio Tinto Mining & Exploration) EPL3555, 3556, 3557, 3558, 3646, 3647, 3648, 3649, 3650, 3651, 3652, 3653, 3654,3655, 3656 Safety ratings at end of 2004 n/a Affirmative Action plan approved Yes Number of bursaries awarded in 2005 NIMT 58 Higher education 19 Managing Director Mr Mike Leech Contact details Mine site PO Box 5005 Swakopmund Tel: 064 64 520 9111 Fax: 064 64 520 2253 Swakopmund Office PO Box 5005 Swakopmund Tel: 064 64 520 300 Fax: 064 64 520 315 Windhoek Office Private Bag 22391 Windhoek Tel: 061 61 280 9111 Fax: 064 64 233 637 Email: [email protected] page 49 2005-2006 Sakawe Mining eview R Corporation nnual A

ines Sakawe Mining Corporation (Samicor), majority owned by the Leviev Group, M of mines alluvial diamonds off the coast of southern Namibia. hamber C page 50 2005-2006 eview R nnual A The goal of Sakawe Mining Corporation (Samicor) is to become a world class producer of gem- ines

quality marine diamonds. The company’s strong position is based on its large, well-located marine M of diamond concessions situated along the coast of Namibia. Samicor has 858km2 of mining licences comprising ML36 the areas surrounding the islands and offshore to a depth of between 90m and hamber

100m as well as ML51 in Lüderitz Bay and ML103A north west of Hottentots Bay. The company has C an additional 14,384km2 of Exclusive Prospecting Licences (EPLs). Samicor is currently focussed on delineating and mining these diamond reserves which requires a combination of detailed and accurate geophysics, representative sampling and the systematic and efficient mining of the sea floor. These large licence holdings make Samicor the second largest marine diamond exploration and mining company in Namibia.

The LLD diamond cutting factory, which is also part of the Leviev Group, is situated together with the Samicor head office in Ruhr Street in the Northern Industrial Area of Windhoek. LLD also has a warehouse on the quay at Lüderitz to house spare parts for all the vessels and from where all technical and logistical functions to support the marine operation are carried out. A small logistical office located in Cape Town purchases specialised equipment that is not locally available in Namibia. Samicor and LLD have a policy of preferentially employing and training Namibian citizens. Presently 72% of Samicor’s employees are Namibians.

The company has a high standard of environmental, health and safety practices in place and has had no fatalities aboard their vessels and even serious injuries have been minimal since operations commenced in 2003. Samicor has fulfilled all its data handover requirements as stipulated in its licence obligations with the Ministry of Mines and Energy.

Samicor has four vessels: the mv Sakawe Surveyor, the mv Sakawe Explorer, the mv Sakawe Miner and the mv Kovambo. The Sakawe Surveyor is a 38m vessel which alternates • Problems with stone sizes for LLD monthly between supply and survey. It has a fully equipped geophysical spread comprising C-Nav Navigation, an Edgetech sidescan sonar, GeoResources • Awaiting decision from Government on Namibian Sparker and Kongsberg high resolution PS40 TOPAS seismic system, SEA diamonds (AP) Ltd swath bathymetry system and IXSEA Octans MRU. The mv Sakawe Explorer has a moonpool for deploying the Wirth Tool (using tunnel boring type technology) with a footprint of 3m2 and the ability to produce representative results in sediments of up to 11.5m thick. The Explorer has a 10t/hr DMS plant aboard for the processing of the material. The Sakawe Miner mines by means of 2 x 20 inch airlift heads and has a 50t/hr DMS plant on board. The vessel can mine on average 300 to 400 sqm/day to a maximum of 5m sediment thickness and mines about 330 days/year. Samicor’s flagship is the mv Kovambo which has a sophisticated NamSSol seabed crawler which can mine 600 to 1200 sqm/day in sediments of between 1m and 6m thick. The mv Kovambo also has a 50t/hr DMS plant aboard.

Samicor is currently the leader in exploration on the Inner Shelf off Namibia’s west coast. Its exploration strategy combines high quality geophysical interpretations, a well formulated and tested page 5 1 2005-2006 eview R nnual A depositional model for placer deposits in this Inner Shelf environment with its in-house knowledge ines

M of well mineralized sea-level stillstands and suitable target morphology. This approach together of with a motivated exploration team and a representative sampling tool has lead to the discovery of a number of deposits that were sampled and passed over by previous licence holders. While this hamber

C throws the usefulness of the inherited sampling and geological databases into doubt, it opens up more areas within the mining licences for future exploration and delineation of reserves that were considered to have been sampled but either not mineralised or poorly mineralised. page 5 2 2005-2006 eview R nnual A ines M of

hamber C

Shareholders Samicor Bv (76%) Longlife Mining (10%) Government of Namibia (8%) National Youth Service (2%) Employees (4%) Licence areas in Namibia ML36, ML51, ML103A Date of production start 2005 Latest life of mine estimate n/a Output in 2005 120,100 carats Permanent employees at end 2005 283 Contractors at end 2005 148 Expatriate employees at end 2005 129 Turnover in 2005 N$123.3 million Wages and salaries in 2005 N$16.7 million Fixed investment in 2005 N$260.1 million Exploration and prospecting in 2005 N$6.6 million Loss in 2005 N$9.3 million Corporate tax paid in 2005 N$111.9 million Related operations in Namibia LLD polishing and cutting factory in Windhoek EPLs at end of 2006 EPL 2027A-I, EPL2469-2474, EPL3293, EPL3412, EPL3419 Safety ratings at end of 2005 n/a Affirmative Action plan approved Not yet due Number of bursaries awarded in 2005 None CEO Mr Eli Nefussy Contact details PO Box 3498, Windhoek Tel: +264 61 225 433 Fax: +264 61 249 253 Email: [email protected] page 5 3 2005-2006 Skorpion eview R Mining nnual A ines Skorpion open pit mine and Namzinc EPZ refinery produce Special High M of Grade zinc for export to world markets. For more information go to www.angloamericanplc.co.uk. hamber C

Skorpion zinc mine is a pioneering operation which mines a zinc oxide deposit and uses a new and sophisticated Zinc Solvent Extraction Electrowinning (SXEW) process to produce zinc of 99.995% purity. After a certain number of teething problems, production at Skorpion mine and its associated Namzinc refinery reached design plate levels in May 2005 and were sustained thereafter. Two impurity excursions into the electrowinning section of the refinery caused production interuptions costing the company 20,000 tonnes of SHG Zinc. Scorpion has focused intensively on research into understanding the impurity excursions and has made significant headway towards regaining and exceeding its design plate production.

The world zinc concentrate market is extremely tight and the metal market is expected to become more so during 2006. The international price of zinc has been driven to record levels of over US$3,500/t by significant speculation and investment fund money moving into commodities in general and zinc in particular. Among the London Metal Exchange metals, zinc has been the preferred pick page 54 2005-2006 eview R nnual A of the analysts. The significant differences in ines

analysts price forecasts for the year is indicative M of of the high degree of uncertainty surrounding the degree to which fund money will continue hamber to support prices at levels much higher than C those justified by market fundamentals alone. A price correction at some stage in the near future is therefore to be expected. Skorpion plans to produce at design plate levels of 150,000t for the coming years.

The open pit at Skorpion has been developed to 50m from surface (670m above sea level) and a temporary access ramp has been built on the western side of the pit to reduce hauling distances. The northern boundary has been pushed back to expose more lower and medium grade ore giving a current surface dimension of 720m by 850m. The southern ramp has been linked with the crusher access ramp to improve hauling of ore to the stockpiles. The current life of mine pit shell development envisages an open pit which is 240m deep and 1200m by 900m wide with an ultimate mining width of 30m at pit bottom. A global haul road design of 30m width and 10% gradient was incorporated into the pit shell.

Skorpion achieved 341 days without a lost time injury before two were recorded during September and October 2005. OSHAS18001 GAP analysis was conducted in December • Design plate production levels achieved since May 2005 2005 and certification was achieved in July 2006. • Thee week interruption to Skorpion’s sister company Ambase Exploration carries out Anglo American’s production due to impurity excursion into electrowinning exploration programme in Namibia. It currently holds nine EPLs in the Kunene, plant Karas, Kavango, Oshikoto and Otjozondjupa regions in Namibia. • Strengthening of world zinc prices to above US$3,500/tonne Skorpion’s labour relations climate partly offset by strengthening of has been stable and constructive and the local currency no major labour conflicts have taken place. One peaceful demonstration on the subject of overtime pay occurred. The company and union are in dispute over this issue which has not as yet been referred to a third party. The company and the union concluded a substantive two-year wage agreement during the period under review. Some shortcomings in Skorpion’s Affirmative Action report, which the company is obliged to submit to the Employment Equity Commissioner, were identified but these are currently being addressed. page 55 2005-2006 eview R nnual A ines M of hamber C

Four bursary holders graduated at the end of 2005, two in metallurgy/chemical engineering, one in electrical engineering and one in mining engineering while one bursary was terminated. Six new bursaries were awarded for 2006 including three in metallurgy/chemical engineering, two in geology, and one in information technology. A further 15 employees were assisted through Skorpion’s part-time study assistance scheme and two employees study as artisans, one of which passed the trade test. As part of its effort to promote science and technology skills in the country, Skorpion sponsored Namibia’s annual science awards in September 2005

Skorpion’s ISO14001 surveillance audit was concluded in February 2006 and accreditation was retained. Mine rehabilitation planning is taking place to minimise the environmental impact of the mine. page 56 2005-2006 eview R nnual

Shareholders Anglo Base Namibia (100%) A

Mines in Namibia Skorpion zinc mine (ML108 and ML127) ines

Date of production start Skorpion Mining Company 2001 M

Namzinc 2004 of

Latest life of mine estimate 2016 Output in 2005 132,813t hamber

Permanent employees at end 2005 629 C Contractors at end 2005 160 Expatriate employees at end 2005 68 Turnover in 2005 N$1,317 million Wages and salaries in 2005 N$104 million Fixed investment in 2005 N$207 million Exploration and prospecting in 2005 US$757,000 Profits in 2005 N$52 million Corporate tax paid in 2005 Nil Related operations in Namibia None EPLs at end of 2006 Ambase Exploration EPL2526, EPL3438, EPL3489, 3490, 3491, 3492, 3493, 3494, 3495, Safety ratings at end of 2004 None Affirmative Action plan approved No Number of bursaries awarded in 2005 4 higher education Managing Director Gerald Boting Contact details Private Bag 2003, Rosh Pinah Tel: +264 63 271 2380 Fax: +264 63 271 2526 Email: [email protected] page 5 7 2005-2006 Trans Hex eview R Marine Namibia nnual A ines Trans Hex Marine Namibia is part of the Trans Hex Group, the only diamond M of mining company listed on the JSE. Trans Hex has no concessions of its own in Namibia but has undertaken contract mining on behalf of a number of other hamber C companies including in the last year EPIA Minerals, Namdeb’s BEE mining partner. For more information go to www.transhex.co.za

As a contract miner, Trans Hex does not undertake prospecting or exploration in Namibian waters. After terminating its contract mining operations for Samicor in 2004, Trans Hex entered into an agreement with EPIA Minerals to mine Namdeb’s mid-shelf concession starting at the end of February 2005. However, the mining availability of both vessels was negatively affected by adverse weather and sea conditions throughout the period. Trans Hex production of 48,500 carats has been incorporated into De Beers Marine Namibia’s output. EPIA’s contract with Namdeb, which was signed in February 2005 runs out on 10 April 2007. Trans Hex will commit both its vessels – the 966 tonne mv Ivan Prinsep and the 1,616 tonne mv Namakwa – to EPIA Minerals for the duration of the contract and discussions over the renewal of the contract between EPIA Minerals and Namdeb has already started. The mv Ivan Prinsep undertook sampling in the Namdeb concession areas for 25% of its available time, as per contractual obligations, and achieved encouraging results. A total page 58 2005-2006 eview R nnual A of 53 days exploration, prospecting and resource development work was carried during the period ines

with positive results. M of

Both Trans Hex vessels passed the ISM (International Safety Management)

• Mined 48,500 carats in 2005/06 hamber annual audit for all vessels above 300 tons, and were issued with certificates. on behalf of EPIA Minerals C No lost-time injuries occurred on either vessel during the reporting period. compared to 69,900 carats in 2004/05 Relations with the MUN were very positive. Wage negotiations were carried out very professionally and efficiently. No disputes and no strikes took place during 2005/06.

Environmental management is strictly overseen by the concession holder, Namdeb, and its partner De Beers Marine Namibia. Trans Hex collects relevant data and reports on a monthly basis.

Shareholders Tegniese Mynbou Bpk (Holding Company) – 33.63% Mines in Namibia None Date of production start Current contract, as operator for EPIA Minerals with Namdeb, started 28 February 2005 Latest life of mine estimate Current contract between EPIA Minerals and Namdeb expires 10 April 2007 Output in 2005/06 48,500 carats Permanent employees at end 2005/06 70 Contractors at end 2005/06 28 Expatriate employees at end 2005/06 26 Turnover in 2005/06 N$34. 9 Wages and salaries in 2005/06 N$18.5 Fixed investment in 2005/06 N$0.3 Exploration and prospecting in 2005/06 Nil Loss in 2005/06 N$35.2 Corporate tax paid in 2005/06 Nil Related operations in Namibia None EPLs at end of 2006 None Safety ratings at end of 2005 As a contractor working for De Beers, we are incorporated in their current reporting structure. First position in the CMN inter-mine competition for smaller mines. Affirmative Action plan approved yes Number of bursaries awarded in 2005 None MD Trans Hex Group Mr Llewellyn Delport Operations Manager Mr Carel Neethling Contact details Waterfront Shop 2 Block H, PO Box 1041, Lüderitz Tel: +264 63 202 355 Fax: +264 63 202 355 Email: [email protected] page 59 2005-2006 Salt and eview R Chemicals nnual A

ines Salt and Chemicals produces coarse and refined salt through solar M of evaporation for export to South Africa and other markets in west Africa. For more information go to www.ncp.co.za hamber C page 60 2005-2006 eview R nnual A Weather related factors caused production in 2005 to fall due to lower than normal evaporation ines

rates in the Walvis Bay pan. During this time the company experienced no lost time injuries. Labour M of relations were good and no industrial action took place. The annual agreement on substantive labour and wage issues became effective in April 2006. The company has one apprentice at NIMT and has hamber

arranged skills upgrading training in a variety of disciplines. The company continues to support C local schools and assists the Sunshine Centre for handicapped children by providing transport for all the children to and from the centre each day. • Fall in output due to lower evaporation rates

Shareholders Walvis Bay Salt Holdings (100%) Mines in Namibia Walvis Bay salt pan ML37 Date of production start 1964 Latest life of mine estimate n/a Output in 2005 577,000t Permanent employees at end 2005 110 Contractors at end 2005 None Expatriate employees at end 2005 None Turnover in 2005 N$20 million Wages and salaries in 2005 N$6 million Fixed investment in 2005 N$1 million Exploration and prospecting in 2005 n/a Related operations in Namibia None Safety ratings at end of 2004 n/a Affirmative Action plan approved Yes Number of bursaries awarded in 2005 10 Managing Director Royden Stanton Contact details PO Box 2471 Walvis Bay Tel: +264 64 213 350 Fax: +264 64 205 026 Email: [email protected] page 6 1 2005-2006 eview

R Feature nnual A ines

M NAMIBIA’S URANIUM of

hamber

C EXPLORATION BOOM By Roger Murray*

With the global uranium price having continued to power ahead during 2006, to a level of over

US$56/pound of uranium oxide (U3O8) in October 2006, Namibia has become a favoured destination for uranium exploration activities by a significant number of mainly foreign, junior exploration companies in the past year to 18 months. They have been attracted by investor perceptions of Namibia as a politically-stable country with a sound fiscal system and good record of economic growth and the large number of known, previously-explored deposits and other highly-prospective occurrences of alaskite- and calcrete-type uranium mineralisation at relatively shallow depth. As considerable data was obtained by past exploration during the last uranium boom of the 1970s and early 1980s, most are advanced-stage rather than early-stage or “grass roots” projects which favours fund-raising by junior exploration firms, predominantly trading on London’s Alternative Investment Market (AIM), the Australian Stock Exchange (ASX) and the Toronto Stock Exchange (TSX).

Some 15 prospecting licences for nuclear fuels exploration have been issued by the Ministry Uranium oxide spot price (US$/lb) of Mines and Energy (MME) to date, with a 65 further 65 or so applications awaiting approval 60 as of October 2006. Most licence holders are 55 locally-registered firms, many of which have

50 already formed partnerships with foreign

45 juniors to conduct exploration work. An

40 October 2006 policy decision by MME to limit all new exclusive exploration licences (EPLs) 35 to one year initially, which is understood to 30 have been made to avert potential speculation 25 in Namibian exploration licences, has been 20 accepted as a reasonable move by current and 15 potential licence holders. It is understood that 10 the MME has advised companies that provided

5 the exploration expenditure specified in EPL

0 applications are met within the first year, a 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 licence would be rolled-over for a further period in line with the standard three-year initial validity period for EPLs.

With encouraging results being reported from several exploration projects located in the large semi- desert area of west-central Namibia lying inland from Walvis Bay and Swakopmund, the likelihood is that at least one, and possibly two or three more uranium mines will be opened in the next two to four years. Namibia is already a major force in the global uranium market due to the Rössing mine, which recorded 30 years of continuous production in 2005 and where mining operations will continue to at least 2016 under the US$112 million life-of-mine extension project approved in December 2005 by Rio Tinto group, the major shareholder (68.6% equity interest) in Rössing

Uranium Ltd. Production is being returned to the mine’s 4,000 metric tons U3O8 per year design capacity by 2008, and by the end of 2006, Namibia’s second uranium mine at Langer Heinrich was on track to meet its scheduled production start-up by December 2006, according to Australia’s Paladin Resources which is developing the US$92 million project. page 6 2 2005-2006 eview R nnual A Namibia’s main uranium deposits ines

Mine/project Ownership Stage Resource* M of

Rössing Rio Tinto (LSE) 68.6% Operating Alaskite: mine to c2016 8,000 t 4,000 t/yr U 0 hamber

3 8 C Langer Heinrich Paladin Resources Development; Calcrete: (ASX)100% production start ,500 t + Dec 06 at 2.6m 5,300 t (inferred) lb/1,180 t/yr Trekkopje Uramin Inc (AIM) Feasibility; Calcrete: 100% production 71,500 t (inferred end-2008 63,100 t)

Valencia Forsys Metals Corp. Pre-feasibility; Alaskite: (TSX) 90%, production by ,030 t (inferred) Ongopolo Mining & end-2009 Processing 10% via Westport Resources Namibia Husab Kalahari Minerals Pre-feasibility; Alaskite: no (AIM) 49%/Extract production resource as yet Minerals (ASX) 51% target end-2008 (farm-in) if ore toll-treated at Rössing plant Tubas Deep Yellow (ASX) Exporation start Calcrete: 100% via Reptile by early 2007 5,800 t (historic Investments Four estimate)

* Metric tonnes of uranium oxide (U3O8)

The Perth-based, ASX-listed company expects the first contracted shipment to take place late in the first quarter of 2007, and ramp-up to the initial annualised design output of 2.6 million pounds 3U O8 (1,180 metric tons) to be achieved as planned during the third quarter of 2007. Based on a measured and indicated resource of 32 million metric tons at a 0.07% grade, containing 20,200 metric tons

U3O8 at a 250 ppm cut-off, a 15-year mining life is currently planned.

In 2005 Namibia was already the world’s fifth largest uranium producer – just ahead of Niger – after Canada, Australia, Kazakhstan and Russia. By 2007, combined output of some 5,000 metric tons

U3O8 from Rössing and Langer Heinrich, could propel it into fourth place, and the opening of further mines in comining years could see Namibia challenging Kazakhstan as the world third-biggest producer of yellow cake. About 15 exploration licences have already been issued, mainly in the past 18 months, with a further 65 licence applications currently awaiting government approval.

Progress of major exploration projects

Since listing on AIM in April 2006, UraMin Inc has rapidly progressed its Trekkopje project, located 65 km northeast of Swakopmund and 20 km north of Rössing, which is on track to become Namibia’s third uranium mine by the end of 2008. Trekkopje is the most advanced of UraMin’s page 6 3 2005-2006 eview R nnual

A predominantly Africa-located uranium projects, which include the Central African Republic (CAR) ines Bakouma deposits – where it began drilling in August 2006 – eight prospecting licences for the Ryst

M Kuil mineralized channel near Beaufort West in South Africa’s Karoo basin, and Chad. With an of

end-October 2006 market capitalisation of £137 million (US$263 million), UraMin is the biggest- capitalised junior firm engaged in a Namibian uranium project. hamber

C The 374 sq km Trekkopje project area contains two low grade calcrete-type deposits in close proximity – Trekkopje and Klein Trekkopje/Arandis – covering some 47 sq km along an east- west trending paleochannel from surface to over 30 metres depth. In September 2006, Trekkopje moved to the pre-development stage with Uramin’s appointment of a US firm, SRK Consulting, to carry out a US$7 million definitive feasibility study (DFS) for completion in the second half of 2007, when it expects to apply for a mining grant. Following the completion of a confirmatory drilling programme the previous month, UraMin also announced a new Trekkopje resource estimate – complying with Canada’s National Instrument NI 43-101 on mineral reserves – of 158

million pounds (71,670 metric tons) U3O8 grading 127 ppm (0.013%), at an 80 ppm average cut-off grade, up from the original estimate of 121 million pounds (55,000 metric tons). Just under 90% is currently an inferred resource, with a measured and indicated resource of 14.4 million pounds

(6,532 metric tons) U3O8 at a higher average grade of 160 ppm. A further resource upgrade is likely following the scheduled completion of a further drilling programme by the end of 2006. Based on an early 2006 conceptual study by South Africa’s Turgis Consulting, a 20-year mining operation is

planned at an annual output of 3.1 million pounds (1,400 metric tons) U3O8, for a projected 44% internal rate of return (IRR).

In early November 2006, UraMin was notified by the MME that it would be issued with an EPL for Trekkopje, covering the same area as the company’s existing Mineral Deposit Retention Licence (MDRL), which it had applied for in February that year. The EPL was to be issued for one year initially, in line with the MME’s new policy. In a comment of November 7, 2006, UraMin’s chief executive officer, Ian Stalker, stated:

“The award of the license is excellent news, and together with the SRK resource statement, provides fresh enthusiasm in the awaited outcome of the DFS, which is the launch pad for our development plans. The increase in resource pounds at a higher grade combined with the identification of higher grade zones has resulted in a significantly more robust project, generating greater confidence in delivery of a third producing uranium mine in Namibia over the next 30 months or so. The outline

project schedule continues to suggest that production at an annualised rate of 3 million lbs of U3O8 pa will be achieved by the last quarter of 2008.”

Toronto-based Forsys Metals Corporation (Forsys) has made encouraging progress in evaluating the alaskite-hosted Valencia deposit. This is located 35 km east of Rössing within the 5 sq km Mineral Deposit Retention Licence (MDRL) registered in the name of Tsumeb Exploration Company Ltd (TECO), in which Forsys acquired a 90% interest through its May 2005 purchase of Namibian Minerals Ltd (NML), a private firm incorporated in the British Virgin Islands. Forsys operates locally through its wholly-owned subsidiary Westport Resources Namibia.

In November 2006, Forsys appointed the Johannesburg office of Australia’s Snowden Mining Industry Consultants to carry out a pre-feasibility study on Valencia, for an expected completion within the first quarter of 2007. The study will determine the project’s viability, and recommend the mining method, pit page 64 2005-2006 eview R nnual configuration and mineral processing route, A along with a financial analysis. Valencia’s main ines uranium mineralisation zone is some 750 metres M of long by 520 metres wide and 200 metres thick, from surface to a depth of 360 metres. An inferred

resource of 32 million metric tons grading 0.22 kg/ hamber t (0.02% U3O8) containing just over 7,000 metric C tons of uranium at was estimated in an October 2005 technical report by Snowdon. The pre- feasibility study will also determine the portion of the previously inferred resource that may be classified as a mineral reserve.

A resource drilling programme completed in August 2006 intersected higher-grade mineralisation in both the main and east zones. The best intersections reported to date included: Hole VA26-096 (deposit centre), 40 metres grading 0.41 kg/t U3O8 at 220- 261 metres depth; VA26-113 (main zone), 62 metres grading 0.34 kg/t at 26-88 metres depth (including 4 metres grading 1.02 kg/t); VA26-125 (east zone), 25 metres grading 0.37 kg/t at 178-202 metres depth. In addition, reverse circulation (RC) drilling to obtain a “measured block” to assist with reclassifying part of the inferred resource has been completed.

Forsys, which had been listed on the TSX Venture Exchange (XE) since 2004, received conditional listing approval from the TSX (main board) in September 2006. In the same month, Forsys signed a letter of intent with Ancash Investments (Pty) Ltd (Ancash), a black economic empowerment (BEE) firm headed by Zacky Nefungo Nujoma, a son of Namibia’s founding president, Dr Sam Nujoma. This is intended to establish a strategic partnership for the acquisition of new uranium projects and to expand Forsys’ exploration presence around Valencia, with equity and project participation by Ancash.

Despite almost no previous exploration for nuclear fuels in the area, AIM-listed Kalahari Minerals and its joint venture partner, ASX-listed Extract Resources, have established good prospects of locating commercially exploitable uranium mineralisation in the 555 sq km Husab EPL, located midway between Rössing and Langer Heinrich. Encouraging results have been reported from an 8,000 metre pre-feasibility drilling programme started in March 2006, the same month in which Kalahari raised £6 million (US$11 million) through listing on AIM. Its exclusively Namibian interests also include several copper prospects in the Kalahari Copper belt (KCB) east of Windhoek and one gold prospect. Perth-based Extract is earning a 51% interest in Husab by spending US$300,000 on exploration. Kalahari’s aims to take one or more of its projects into production by the end of 2008, and if a sufficient resource can be established at Husab, its strategy would be secure operational cash flow by initially sending mined ore to the Rössing plant for toll treatment. If the proven resource turned out to be big enough to justify the investment, an on-site ore processing plant could be constructed under a second- stage development.

The aim is to prove about 40 million metric tons grading an average 0.4 kg/t, for a contained resource of +35 million pounds (+15,900 metric tons) U3O8. Drilling was initially concentrated on the Ida Dome alaskite zone based on encouraging surface radiometrics which confirmed uranium mineralisation along a 4 km strike distance. The best intersections to date include 8 metres at

2.32 kg/t U3O8, 9 metres at 1.08 kg/t and 14 metres at 1.06 kg/t over 14 metres. Four new high potential targets have been identified also, comprising Hildenhof zone, an eastern extension of the Goanikontes anomaly just outside the licence area; Ida East zone, interpreted as the eastern section of a uraniferous structure; Welwichia zone, a small alaskite body on the north of Ida Dome; Rössing page 65 2005-2006 eview R nnual

A South zone, interpreted to be an extension of the rock formation hosting the Rössing mine. ines

M In early November 2006, Kalahari announced that the MME had offered Extract a new EPL located of immediately the south of the Husab joint venture licence, containing extensions to the uranium- bearing stratigraphy currently being drilled there. It is intended this second EPL, which Kalahari

hamber stated will initially be granted for one year “as per the new policy for nuclear fuel licences in

C Namibia”, will be incorporated within the existing joint venture. Limited drilling over a number of prospects in the new licence area had been carried out by Anglo American corporation in 1974 to 1981, including three targets representing strike extensions of the Ida Dome and Ida East prospects, which strongly suggest that uranium mineralisation is developed over a greater distance than previously assessed.

New projects starting up

Other known deposits or potential uranium occurrences have recently attracted the interest of a number of other foreign juniors, which had either started or were due to commence exploration shortly at the time this survey was compiled. Australia’s Bannerman Resources began a 3,500 metre diamond core drilling programme at the alaskite-hosted Goanikontes deposit some 20 km west-southwest of Rössing in September 2006, aimed at verifying historic data and increasing information on mineralisation attributes. Perth-based Bannerman acquired an 80% interest in Namibia’s Turgi Investments (Pty) Ltd in mid-2005, which was granted two EPLs in May 2006.

The 500 sq km Welwitschia licence contains 12 known uranium anomalies, with continuous mineralisation over 22 km of strike indicated for the Goanikontes dome area. Drilling was initially concentrated on Goanikontes Anomaly A, but is likely to be extended elsewhere as Bannerman says the results from reprocessing historic exploration data have exceeded its expectations. These have highlighted uranium mineralisation over 37 km of strike and outlined five new prospective zones. Bannerman also began a 9,000 metre air core drilling programme at the Elspe palaeo-channel of calcretised uranium sediments within its second EPL, Swakop River (813 sq km), which surrounds the Langer Heinrich mine. Reprocessed data shows that Elspe is larger than previously indicated and extends north of the Swakop River into areas of valley-fill sedimentation.

At the Marenica mineralised palaeo-channel prospect, some 60 km north of Rössing, ASX-listed West Australian Metals (WME) is targeting 8,000 metric tons of alaskite-hosted contained uranium within some 40 million metric tons of near-surface material grading an average of 200ppm (0.02%)

U3O8. Historic drill data – which covered only about a third of the present 706 sq km EPL – from open file reports at the Ministry of Mines and Energy (MME) indicate several higher-grade

intersections, including 10 metres averaging 980 parts per million U3O8 and 8 metres averaging

500 ppm (0.05%) U3O8. Perth-based WME is earning an 80% interest in a joint venture with the Namibian licence holder, Jaco Smit.

A first phase radiometry, sampling and trenching program was completed in September 2006, and WME is also assessing whether previous metallurgical testwork of mineralised samples yielding good acid leaching results was representative of the whole ore body, with South Africa’s Mintek recently appointed project metallurgical consultants.

In October 2006, ASX-listed Deep Yellow Ltd (DYL), with extensive exploration interests in Australia’s Northern Territory and South Australia, announced its diversification into Africa via a merger agreement securing access to significant Namibian uranium resources. Subiatico, Western Australia-based DYL is acquiring 100% of Raptor Partners Ltd, a British Virgin Islands-registered company, whose wholly-owned Namibian subsidiary, Reptile Investments Four (Pty) Ltd, holds three contiguous EPLs granted in June 2006. These cover 2,600 sq km, containing substantial near- surface mineralisation in valley-fill calcrete similar to Langer Heinrich. page 66 2005-2006 eview R nnual

Known deposits comprise Tubas, Tumas, Oryx and A

Namib Park, with a combined historic resource estimate ines

of 68.5 million metric tons grading an average 263 parts M of per million (ppm-0.026%) U3O8, containing 18,000 metric tons of uranium. The largest deposits are Tubas, located some 40 km east of Walvis Bay, with a 26 hamber

million metric ton resource grading 222 ppm (0.02%) C

U3O8 containing 5,800 metric tons of uranium; and Oryx, located 70 km east of Walvis Bay, with an 18 million metric ton resource grading 300 ppm (0.03%)

U3O8 containing 5,300 metric tons of uranium.

DYL anticipates that “considerable further exploration” will be required for independent verification of these estimates. A Namibian-based technical and administrative team to conduct exploration is being set up, which will be led by DYL’s executive chairman, Dr Leon Pretorius, also a board member of Langer Heinrich Uranium (Pty) Ltd. The two-tranche merger agreement involved an initial cash payment of A$2.6 million (US$2.0 million) to Raptor’s shareholders and the issue of up to 174 million DYL shares, valuing the deal at some AS$26 million (US$20 million).

TSX Venture Exchange (XE)-listed Xemplar Energy Corporation (Xemplar) intends to start exploration in three project areas, once it has been granted six EPLs applied for. As of October 2006, it was anticipated these would be granted soon, according to the company’s president and chief executive, Gennan McDowell. Vancouver-based Xemplar has raised C$6 million (US$ 5.3 million) for Namibian exploration via a private share placement. Initial work will include radon gas surveys, ground sampling and drilling to determine the extent of uranium mineralisation.

Xemplar’s wholly-owned Namibian subsidiary, Namura Mineral Resources (Pty) Ltd – acquired last year – holds three exclusive reconnaissance licences (ERLs) over some 13,000 sq km, mainly outside the main west-central Namib uranium exploration zone. These cover Cape Cross (3,855 sq km), containing several mineralised calcrete palaeo-channels; Warmbad (4,700 sq km), containing seven uranium occurrences located along a 30 km linear feature within what Xemplar describes as an identical geological environment to Rössing; Aus (3,276 sq km), containing extensive calcrete palaeo-channels within radioactive granites, which Xemplar believes may host a Langer Heinrich- type deposit.

* Roger Murray is a London-based analyst and journalist specialising in the mineral resources of Namibia and Southern Africa. page 6 7 2005-2006 eview R Mining and the economy nnual A ines Namibia’s mining sector generated N$3.3 billion (US$517 million) of value added during 2005 M

of contributing 8.6% towards its Gross Domestic Product (GDP) of N$38.6 billion (US$6 billion).

Diamond mining delivered N$2.7 billion (US$422 million) and other mining and quarrying N$0.6

hamber billion (US$95 million). If copper smelting and zinc refining as well as diamond cutting and C polishing were included, value added from the mining sector would be even greater.

Mining value added in current prices (N$m) Mining value added in current prices (N$m)

5,000

4,500

Other mining 4,000 Diamonds

3,500

3,000

2,500

2,000

1,500

1,000

500

0 1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05

Source:National accounts,Central Bureau of Statistics

In real terms mining sector value added declined 1.8% in 2005. This decline came about as a result of lower diamond production. Non-diamond mining grew by 5%.

Exports from the mining sector reached N$6.7 billion (US$1 billion) to which must be added exports of blister copper and SHG zinc worth N$197 million (US$31 million) and N$1.3 billion (US$205 million) respectively.

Mining employment page 68 2005-2006 eview R nnual A

At the end of 2005 Chamber members alone directly employed 7,507 permanent employees plus ines M

an additional 1,873 contractors and had paid out considerably more than N$1.1 billion (US$172 of million) in wages and salaries during the year. hamber C In 2005 the mining industry spent N$2.3 billion (US$358 million) on fixed investment contributing 22% to Namibia’s entire fixed investment of N$10.4 billion (US$1.6 billion) and surpassing investment by the whole of central government for the third year in a row. Exploration expenditure reached N$477 million (US$74 million), its highest level in over ten years.

MiningMining GFC fixedF as % of GDP investment(includes exploration expenditure)as % of GDP(Includes exploration expenditure)

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0% 1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05

Source:National accounts, Central Bureau of Statistics

The mining industry continued to invest heavily in people. Chamber members awarded a total of 121 bursaries in 2005 for higher education in Namibia and South Africa and vocational training at the Namibian Institute of Mining Technology.

In 2005/06 the Ministry of Finance estimated that tax revenue from the mining industry would amount to N$48.3 million (US$7.5 million) from diamond mining and N$6.5 million (US$1 million) from other mining. Diamond royalty tax was estimated to yield N$242 million (US$38 million). No dividends were expected from either Namdeb or Rössing.

Diamond and non-diamond andmining non-diamondtaxation (N$m) mining taxation (N$m)

2,500

2,000

Budgeted Actual

1,500

1,000

500

0 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 Source: Budget documents page 69 2005-2006 eview R nnual

A BudgetedBudgeted and actual andmining actualcorporate tax rnon-diamondevenue (N$m) mining corporate tax ines revenue300 (N$m) M of 250

Budgeted Actual

hamber 200 C

150

100

50

0 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07

Source: Budget documents

BudgetedBudgeted and aandctual dactualiamond tax diamond revenue (N$m)* tax revenue (N$m)*Budgeted and actual mining corporate tax revenue (N$m)

1,800 300

1,600

250 1,400 Budgeted Actual Budgeted Actual

1,200 200

1,000

150 800

600 Namdeb created 100

400

50 200

0 0 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/0590/91 05/06 91/9206/07 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07

* from 1990/91-1994/95 diamond corporate tax + diamond profits tax + diamond export duty Source: BudgetSource:documentbudget s

In 2006/07 the Ministry of Finance estimates profits tax revenue from the mining industry will amount to N$45 million (US$7 million) from diamond mining and N$7 million (US$1 million) from other mining, a figure grossly underestimated. Diamond royalties are expected to yield N$316 million (US$49 million) while only nominal dividends of N$10,000 (US$1,560) are expected from Namdeb and Rössing. N$30 million (US$5 million) was expected from the new mining royalty tax at the time of the main budget in March 2006 although this estimate was made before the revisions to the tax gazetted in November 2006. If PAYE, VAT and other tax payments by the mining industry to Namibia’s fiscus are taken into account, tax revenue from the industry would be far higher.

* Conversions to US dollars have been made using an average exchange rate for 2005 of N$6.41:US$ used by the Central Bureau of Statistics in the National Planning Commission page 7 0 page 71 Chamber of Mines Annual Review 2005-2006 2005-2006 Annex 1: Key Statistics eview R Output by mine nnual A ines 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 M

of Diamond Fields (carats) 5,802 6,692 - 16,470 25,401 16,762 29,477 n/a

Langer Heinrich (tonnes of uranium oxide) hamber

C Namdeb (carats) 750,115 1,186,133 1,547,966 1,138,998 1,302,918 1,340,631 1,357,775 1,359,100 1,275,228 1,289,776 1,320,308 1,384,704 1,275,899 1,454,756 1,858,383 1,800,000 Namdeb (carats) 696,914 807,139 992,872 878,000 De Beers Marine Namibia (carats) 513,053 602,037 841,965 922,000 Beach and marine contractors (carats) 65,932 45,580 23,546

Navachab (kg of gold) 1,453 1,709 1,865 1,790 2,188 1,893 2,015 2,302 1,855 2,008 2,399 2,694 2,650 2,298 2,068 2,519

Ocean Diamond Mining Holdings Ltd 59,113 59,718 73,327

Okorusu Fluorspar (wet metric tonnes) 25,980 29,246 37,176 42,249 50,645 36,889 32,285 23,208 42,139 57,700 66,128 81,245 81,084 79,349 104,767 114,886

Ongopolo Mining and Processing Ongopolo Processing Blister copper (tonnes) 29,145 29,365 33,030 29,345 25,494 25,140 16,659 16,029 8,014 - 5,082 27,015 17,850 26,306 26,306 22,563 Kombat mine Copper concentrate (tonnes) 30,727 37,957 33,362 30,460 26,742 34,079 18,470 18,858 8,160 - 15,614 18,180 23,836 16,701 16,535 Otjihase mine Copper concentrate (tonnes) 34,138 34,498 44,864 51,144 43,561 35,419 25,882 26,283 7,045 - 3,485 26,152 39,125 35,511 28,071 Pyrite concentrate (tonnes) 138,924 127,119 164,191 100,575 121,634 103,140 90,735 93,684 28,174 - 11,967 56,994 3,633 31,786 3,658 3,719 Tsumeb operations Copper concentrate (tonnes) 43,387 44,225 36,952 28,710 27,581 12,148 12,743 5,340 7,614 - 1,036 12,657 14,573 Khusib Springs Copper concentrate (tonnes) 21,473

Rosh Pinah Zinc Corporation Zinc concentrate (tonnes) 66,291 62,754 68,337 53,995 64,567 59,305 69,689 74,632 78,617 69,193 73,535 70,610 77,587 107,920 123,272 126,123 Lead concentrate (tonnes) 23,875 19,470 19,681 16,859 24,639 26,421 28,211 26,288 24,273 19,283 20,665 26,182 24,140 31,453 27,188 24,690

Rössing Uranium (tonnes of uranium oxide) n/a 3185* 2190* 2168* 2471* 2,608 3,188 3,425 3,278 3,171 3,201 2,640 2,751 2,401 3,582 3,711 *short tons

Sakawe Mining Corporation (carats) 119,546 120,100

Salt Company Coarse salt 110,800 90,727 62,600 80,000 58,930 60,000 43,550 47,270 61,915 60,100 32,077 58,000 54,729 84,818 62,583 66,994 Refined salt 980 1,065 1,153 1,200 800 1,670 1,715 5,854 5,223 7,220 4,347 11,250 9,640 11,099 11,384 10,135 Rock salt n/a 6,430 6,678 4,011 3,202 3,700 n/a 5,008 6,025 6,220 4,585 6,400 5,631 11,421 7,069 7,399 Table Salt 9,188 4,338 5,189

Skorpion Zinc (tonnes of SHG zinc) 35 47,436 119,205 132,813

Trans Hex Group (contractor to other companies)

Walvis Bay Salt Refiners (tonnes of coarse salt) n/a n/a n/a n/a 284,705 320,000 258,721 432,290 434,198 429,230 482,000 500,441 552,000 567,000 717,000 577,000 page 72 2005-2006 eview R nnual A ines 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 M

Diamond Fields (carats) 5,802 6,692 - 16,470 25,401 16,762 29,477 n/a of

Langer Heinrich (tonnes of uranium oxide) hamber

Namdeb (carats) 750,115 1,186,133 1,547,966 1,138,998 1,302,918 1,340,631 1,357,775 1,359,100 1,275,228 1,289,776 1,320,308 1,384,704 1,275,899 1,454,756 1,858,383 1,800,000 C Namdeb (carats) 696,914 807,139 992,872 878,000 De Beers Marine Namibia (carats) 513,053 602,037 841,965 922,000 Beach and marine contractors (carats) 65,932 45,580 23,546

Navachab (kg of gold) 1,453 1,709 1,865 1,790 2,188 1,893 2,015 2,302 1,855 2,008 2,399 2,694 2,650 2,298 2,068 2,519

Ocean Diamond Mining Holdings Ltd 59,113 59,718 73,327

Okorusu Fluorspar (wet metric tonnes) 25,980 29,246 37,176 42,249 50,645 36,889 32,285 23,208 42,139 57,700 66,128 81,245 81,084 79,349 104,767 114,886

Ongopolo Mining and Processing Ongopolo Processing Blister copper (tonnes) 29,145 29,365 33,030 29,345 25,494 25,140 16,659 16,029 8,014 - 5,082 27,015 17,850 26,306 26,306 22,563 Kombat mine Copper concentrate (tonnes) 30,727 37,957 33,362 30,460 26,742 34,079 18,470 18,858 8,160 - 15,614 18,180 23,836 16,701 16,535 Otjihase mine Copper concentrate (tonnes) 34,138 34,498 44,864 51,144 43,561 35,419 25,882 26,283 7,045 - 3,485 26,152 39,125 35,511 28,071 Pyrite concentrate (tonnes) 138,924 127,119 164,191 100,575 121,634 103,140 90,735 93,684 28,174 - 11,967 56,994 3,633 31,786 3,658 3,719 Tsumeb operations Copper concentrate (tonnes) 43,387 44,225 36,952 28,710 27,581 12,148 12,743 5,340 7,614 - 1,036 12,657 14,573 Khusib Springs Copper concentrate (tonnes) 21,473

Rosh Pinah Zinc Corporation Zinc concentrate (tonnes) 66,291 62,754 68,337 53,995 64,567 59,305 69,689 74,632 78,617 69,193 73,535 70,610 77,587 107,920 123,272 126,123 Lead concentrate (tonnes) 23,875 19,470 19,681 16,859 24,639 26,421 28,211 26,288 24,273 19,283 20,665 26,182 24,140 31,453 27,188 24,690

Rössing Uranium (tonnes of uranium oxide) n/a 3185* 2190* 2168* 2471* 2,608 3,188 3,425 3,278 3,171 3,201 2,640 2,751 2,401 3,582 3,711 *short tons

Sakawe Mining Corporation (carats) 119,546 120,100

Salt Company Coarse salt 110,800 90,727 62,600 80,000 58,930 60,000 43,550 47,270 61,915 60,100 32,077 58,000 54,729 84,818 62,583 66,994 Refined salt 980 1,065 1,153 1,200 800 1,670 1,715 5,854 5,223 7,220 4,347 11,250 9,640 11,099 11,384 10,135 Rock salt n/a 6,430 6,678 4,011 3,202 3,700 n/a 5,008 6,025 6,220 4,585 6,400 5,631 11,421 7,069 7,399 Table Salt 9,188 4,338 5,189

Skorpion Zinc (tonnes of SHG zinc) 35 47,436 119,205 132,813

Trans Hex Group (contractor to other companies)

Walvis Bay Salt Refiners (tonnes of coarse salt) n/a n/a n/a n/a 284,705 320,000 258,721 432,290 434,198 429,230 482,000 500,441 552,000 567,000 717,000 577,000 page 73 2005-2006

eview Employment* R nnual

A 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 ines Namdeb Diamond Corporation (Pty) Ltd 6,731 6,283 5,708 4,673 4,645 4,448 3,933 3,531 3,175 3,269 3,024 2,916 2,890 2,953 2,993 2,956 M

of De Beers Marine Namibia 546 565 596

Namibian Minerals Corporation* 69 72 75 261 167 300 Sakawe Mining Corporation 18 210 283 hamber

C Ocean Diamond Mining* 158 160 140 Trans Hex Group Limited 58 107 118 70 Diamond Fields (Namibia) (Pty) Ltd 7 4 3 3 31 n/a Diaz Point Exploration (Pty) Ltd 85 50 81 64 45 Rössing Uranium Ltd 2,378 1,495 1,391 1,295 1,284 1,239 1,190 1,249 1,182 1,006 808 798 771 817 830 860 Langer Heinrich Uranium (Pty) Ltd 20 Ongopolo Mining and Processing Ltd (formerly TCL) 903 • Ongopolo Processing (formerly Tsumeb smelter) 697 626 457 657 608 597 468 525 521 217 271 224 212 212 • Tsumeb mine 1,693 1,545 1,585 1,159 1,100 1,100 511 448 374 50 101 110 • Kombat mine 642 637 632 611 591 591 507 517 521 306 301 265 262 262 • Otjihase mine 627 642 647 656 617 583 528 509 498 379 283 314 366 362 • Khusib Springs 36 Anglogold Namibia (Pty) Ltd (Navachab mine) 153 339 292 288 278 269 294 372 339 361 314 311 311 146 246 280 Rosh Pinah Zinc Corporation (Pty) Ltd 449 507 530 337 340 347 402 425 433 424 438 491 511 498 502 523 Imcor Tin (Pty) Ltd (Uis tin mine) 60 60 Peralin (Pty) Ltd (marble) 3 SWA Lithium Mines (Pty) Ltd (Rubicon mine) 101 Skorpion Zinc (Pty) Ltd 507 598 616 101 Namzinc (Pty) Ltd (Skorpion) 565 Okorusu Fluorspar (Pty) Ltd 123 113 128 129 139 146 149 165 139 151 157 186 197 208 249 Walvis Bay Salt Refiners (Pty) Ltd 40 41 80 81 83 87 96 101 98 105 108 110 Salt Company (Pty) Ltd 71 68 86 50 61 58 60 49 57 67 59 67 70 73 72 72 NIMT 65 Total employment 13,605 12,265 11,501 9,854 9,693 9,775 8,119 8,118 7,587 5,653 6,103 5,948 6,622 7,047 7,449 7,418 Note: Namdeb Diamond Corporation (Pty) Ltd employment figures include subsidiary

Source: CMN annual reports * Permanent employees page 7 4 2005-2006 eview R nnual

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 A ines Namdeb Diamond Corporation (Pty) Ltd 6,731 6,283 5,708 4,673 4,645 4,448 3,933 3,531 3,175 3,269 3,024 2,916 2,890 2,953 2,993 2,956 M

De Beers Marine Namibia 546 565 596 of

Namibian Minerals Corporation* 69 72 75 261 167 300 Sakawe Mining Corporation 18 210 283 hamber

Ocean Diamond Mining* 158 160 140 C Trans Hex Group Limited 58 107 118 70 Diamond Fields (Namibia) (Pty) Ltd 7 4 3 3 31 n/a Diaz Point Exploration (Pty) Ltd 85 50 81 64 45 Rössing Uranium Ltd 2,378 1,495 1,391 1,295 1,284 1,239 1,190 1,249 1,182 1,006 808 798 771 817 830 860 Langer Heinrich Uranium (Pty) Ltd 20 Ongopolo Mining and Processing Ltd (formerly TCL) 903 • Ongopolo Processing (formerly Tsumeb smelter) 697 626 457 657 608 597 468 525 521 217 271 224 212 212 • Tsumeb mine 1,693 1,545 1,585 1,159 1,100 1,100 511 448 374 50 101 110 • Kombat mine 642 637 632 611 591 591 507 517 521 306 301 265 262 262 • Otjihase mine 627 642 647 656 617 583 528 509 498 379 283 314 366 362 • Khusib Springs 36 Anglogold Namibia (Pty) Ltd (Navachab mine) 153 339 292 288 278 269 294 372 339 361 314 311 311 146 246 280 Rosh Pinah Zinc Corporation (Pty) Ltd 449 507 530 337 340 347 402 425 433 424 438 491 511 498 502 523 Imcor Tin (Pty) Ltd (Uis tin mine) 60 60 Peralin (Pty) Ltd (marble) 3 SWA Lithium Mines (Pty) Ltd (Rubicon mine) 101 Skorpion Zinc (Pty) Ltd 507 598 616 101 Namzinc (Pty) Ltd (Skorpion) 565 Okorusu Fluorspar (Pty) Ltd 123 113 128 129 139 146 149 165 139 151 157 186 197 208 249 Walvis Bay Salt Refiners (Pty) Ltd 40 41 80 81 83 87 96 101 98 105 108 110 Salt Company (Pty) Ltd 71 68 86 50 61 58 60 49 57 67 59 67 70 73 72 72 NIMT 65 Total employment 13,605 12,265 11,501 9,854 9,693 9,775 8,119 8,118 7,587 5,653 6,103 5,948 6,622 7,047 7,449 7,418 Note: Namdeb Diamond Corporation (Pty) Ltd employment figures include subsidiary page 7 5 2005-2006

eview Mining and the economy R nnual

A 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 ines Value added (current prices) M

of Diamonds 554 722 775 598 872 763 1,169 1,251 1,358 1,697 1,934 2,854 3,427 2,630 3,048 2,708

Other mining 530 381 337 253 396 295 371 478 477 253 677 809 1,138 345 441 609

hamber Mining and quarrying 1,084 1,103 1,112 851 1,268 1,058 1,540 1,729 1,835 1,950 2,611 3,663 4,565 2,975 3,489 3,317 C GDP (N$m) 6,053 6,857 8,050 9,302 11,549 12,706 15,011 16,751 18,789 20,684 23,690 27,686 32,908 33,842 36,181 38,560

As % of GDP Diamonds 9.2% 10.5% 9.6% 6.4% 7.6% 6.0% 7.8% 7.5% 7.2% 8.2% 8.2% 10.3% 10.4% 7.8% 8.4% 7.0% Other mining 8.8% 5.6% 4.2% 2.7% 3.4% 2.3% 2.5% 2.9% 2.5% 1.2% 2.9% 2.9% 3.5% 1.0% 1.2% 1.6% Mining and quarrying 17.9% 16.1% 13.8% 9.1% 11.0% 8.3% 10.3% 10.3% 9.8% 9.4% 11.0% 13.2% 13.9% 8.8% 9.6% 8.6%

Value added (constant prices) 1990 prices 1995 prices Diamonds 554 852 1,045 762 845 763 783 782 793 908 847 803 942 909 1,260 1,208 Other mining 530 443 380 348 383 295 317 363 324 303 343 314 355 328 428 450 Mining and quarrying 1084 1,295 1,425 1,110 1,228 1,058 1,100 1,145 1,117 1,211 1,190 1,117 1,297 1,237 1,688 1,658

% growth Diamonds 53.8% 22.7% -27.1% 10.9% 2.6% -0.1% 1.4% 14.5% -6.7% -5.2% 17.3% -3.5% 38.6% -4.1% Other mining -16.4% -14.2% -8.4% 10.1% 7.5% 14.5% -10.7% -6.5% 13.2% -8.5% 13.1% -7.6% 30.5% 5.1% Mining and quarrying 19.5% 10.0% -22.1% 10.6% 4.0% 4.1% -2.4% 8.4% -1.7% -6.1% 16.1% -4.6% 36.5% -1.8%

Gross Fixed Capital Formation (current prices) Mining and quarrying 380 142 234 258 217 302 567 437 500 662 828 958 874 3,084 1,919 2,298 as % of value added 35% 13% 21% 30% 17% 29% 37% 25% 27% 34% 32% 26% 19% 104% 55% 69% as % of GDP 6.3% 2.1% 2.9% 2.8% 1.9% 2.4% 3.8% 2.6% 2.7% 3.2% 3.5% 3.5% 2.7% 9.1% 5.3% 6.0% Source: CBS National Accounts

Exploration expenditure (N$m) 190 237 112 124 175 167 249 146 264 472 477 Source: CBS National Accounts Exploration expenditure (N$m) 66.9 39.3 20.5 38.2 37.8 94.8 118.3 97.1 124.0 175.0 167.0 249.0 146.0 264.0 n/a n/a Source: CMN annual reports

Number of Class D members 13 12 14 15 14 19 22 25 21 21 24 15 14 14 15 15 Source: CMN annual reports

Exports of ores and minerals Metal ores including uranium ore 625 601 601 838 905 945 1,104 1,190 1,342 1,709 1,095 1,261 1526 Other minerals 24 51 40 28 22 39 53 59 64 112 95 117 136 Diamonds 1,515 1,486 1,763 2,328 2,495 2,150 2,860 3,947 4,172 5,205 3,561 4,930 5021 Total 2,164 2,138 2,404 3,194 3,422 3,134 4,017 5,196 5,578 7,026 4,751 6,308 6,683 Copper 188 244 250 154 194 52 0 58 201 262 186 212 197 Zinc refined 156 694 1317

2,352 2,382 2,654 3,348 3,616 3,186 4,017 5,254 5,779 7,288 5,093 7,214 8,197

Total exports of goods 4,052 4,659 5,112 6,095 6,167 6,812 7,539 9,164 10,550 13,360 14,239 13,810 15,937 Diamonds as % of merchandise exports 37% 32% 35% 38% 41% 32% 38% 43% 40% 39% 25% 36% 32%

Minerals as % of merchandise exports 58% 51% 52% 55% 59% 47% 53% 57% 55% 55% 36% 52% 51%

Source: BoN annual reports/CBS National Accounts page 7 6 2005-2006 eview R nnual

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 A Value added (current prices) ines M

Diamonds 554 722 775 598 872 763 1,169 1,251 1,358 1,697 1,934 2,854 3,427 2,630 3,048 2,708 of

Other mining 530 381 337 253 396 295 371 478 477 253 677 809 1,138 345 441 609

Mining and quarrying 1,084 1,103 1,112 851 1,268 1,058 1,540 1,729 1,835 1,950 2,611 3,663 4,565 2,975 3,489 3,317 hamber C GDP (N$m) 6,053 6,857 8,050 9,302 11,549 12,706 15,011 16,751 18,789 20,684 23,690 27,686 32,908 33,842 36,181 38,560

As % of GDP Diamonds 9.2% 10.5% 9.6% 6.4% 7.6% 6.0% 7.8% 7.5% 7.2% 8.2% 8.2% 10.3% 10.4% 7.8% 8.4% 7.0% Other mining 8.8% 5.6% 4.2% 2.7% 3.4% 2.3% 2.5% 2.9% 2.5% 1.2% 2.9% 2.9% 3.5% 1.0% 1.2% 1.6% Mining and quarrying 17.9% 16.1% 13.8% 9.1% 11.0% 8.3% 10.3% 10.3% 9.8% 9.4% 11.0% 13.2% 13.9% 8.8% 9.6% 8.6%

Value added (constant prices) 1990 prices 1995 prices Diamonds 554 852 1,045 762 845 763 783 782 793 908 847 803 942 909 1,260 1,208 Other mining 530 443 380 348 383 295 317 363 324 303 343 314 355 328 428 450 Mining and quarrying 1084 1,295 1,425 1,110 1,228 1,058 1,100 1,145 1,117 1,211 1,190 1,117 1,297 1,237 1,688 1,658

% growth Diamonds 53.8% 22.7% -27.1% 10.9% 2.6% -0.1% 1.4% 14.5% -6.7% -5.2% 17.3% -3.5% 38.6% -4.1% Other mining -16.4% -14.2% -8.4% 10.1% 7.5% 14.5% -10.7% -6.5% 13.2% -8.5% 13.1% -7.6% 30.5% 5.1% Mining and quarrying 19.5% 10.0% -22.1% 10.6% 4.0% 4.1% -2.4% 8.4% -1.7% -6.1% 16.1% -4.6% 36.5% -1.8%

Gross Fixed Capital Formation (current prices) Mining and quarrying 380 142 234 258 217 302 567 437 500 662 828 958 874 3,084 1,919 2,298 as % of value added 35% 13% 21% 30% 17% 29% 37% 25% 27% 34% 32% 26% 19% 104% 55% 69% as % of GDP 6.3% 2.1% 2.9% 2.8% 1.9% 2.4% 3.8% 2.6% 2.7% 3.2% 3.5% 3.5% 2.7% 9.1% 5.3% 6.0% Source: CBS National Accounts

Exploration expenditure (N$m) 190 237 112 124 175 167 249 146 264 472 477 Source: CBS National Accounts Exploration expenditure (N$m) 66.9 39.3 20.5 38.2 37.8 94.8 118.3 97.1 124.0 175.0 167.0 249.0 146.0 264.0 n/a n/a Source: CMN annual reports

Number of Class D members 13 12 14 15 14 19 22 25 21 21 24 15 14 14 15 15 Source: CMN annual reports

Exports of ores and minerals Metal ores including uranium ore 625 601 601 838 905 945 1,104 1,190 1,342 1,709 1,095 1,261 1526 Other minerals 24 51 40 28 22 39 53 59 64 112 95 117 136 Diamonds 1,515 1,486 1,763 2,328 2,495 2,150 2,860 3,947 4,172 5,205 3,561 4,930 5021 Total 2,164 2,138 2,404 3,194 3,422 3,134 4,017 5,196 5,578 7,026 4,751 6,308 6,683 Copper 188 244 250 154 194 52 0 58 201 262 186 212 197 Zinc refined 156 694 1317

2,352 2,382 2,654 3,348 3,616 3,186 4,017 5,254 5,779 7,288 5,093 7,214 8,197

Total exports of goods 4,052 4,659 5,112 6,095 6,167 6,812 7,539 9,164 10,550 13,360 14,239 13,810 15,937 Diamonds as % of merchandise exports 37% 32% 35% 38% 41% 32% 38% 43% 40% 39% 25% 36% 32%

Minerals as % of merchandise exports 58% 51% 52% 55% 59% 47% 53% 57% 55% 55% 36% 52% 51% page 77 Government revenue and 2005-2006 eview

R expenditure data nnual A ines 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 M of

Revenue (N$m) Other mining hamber Budgeted 130.0 51.0 20.0 48.0 63.0 30.0 40.0 60.0 61.0 120.0 65.0 55.0 120.0 150.0 14.9 6.5 7.0 C Actual 75.8 26.1 2.6 5.8 37.5 65.6 44.8 28.6 19.2 211.7 36.4 106.2 283.9 3.2 7.9 n/a n/a

Diamond mining Diamond mining - budgeted 73.0 0.0 53.0 60.0 105.0 105.0 100.0 100.0 200.0 200.0 185.0 475.0 745.0 1,160.0 52.0 48.3 45.0 Diamond mining - actual 62.3 0.0 90.2 164.1 126.0 85.1 89.9 505.0 161.4 142.7 439.9 764.4 1,157.4 175.4 301.4 n/a n/a Diamond profits - budgeted 14.0 9.0 25.0 3.0 10.5 0.0 Diamond profits - actual 0.0 23.3 24.9 17.4 Diamond export - budgeted 65.0 65.0 95.0 80.0 120.0 1.0 Diamond export - actual 60.3 90.9 93.6 114.2 3.1 Diamond royalties - budgeted 0.0 140.0 160.0 176.0 249.9 205.0 240.0 294.0 420.0 450.0 500.0 242.1 316.4 Diamond royalties - actual 104.1 130.8 204.2 198.8 199.3 269.4 240.0 286.1 479.1 301.9 385.4 Budgeted 152.0 74.0 173.0 143.0 235.5 246.0 260.0 276.0 449.9 405.0 425.0 769.0 1,165.0 1,610.0 552.0 290.4 361.4 Actual 122.6 114.1 208.7 295.6 233.3 215.9 294.1 703.8 360.7 412.1 679.9 1,050.5 1,636.5 477.3 686.8 n/a n/a

All mining Budgeted 282.0 125.0 193.0 191.0 298.5 276.0 300.0 336.0 510.9 525.0 490.0 824.0 1,285.0 1,760.0 566.9 296.9 368.4 Actual 198.5 140.3 211.3 301.5 270.8 281.4 338.9 732.4 380.0 623.8 716.3 1,156.7 1,920.4 480.5 694.7 n/a n/a

Total tax revenue 1,734.3 2,174.3 2,378.3 2,682.3 3,136.1 3,610.3 4,114.0 5,106.1 5,497.5 6,597.7 7,550.4 8,165.9 9,329.8 8,762.9 10,468.2 11,354.8 14,270.4 Non-diamond mining as % of tax revenue 4.4% 1.2% 0.1% 0.2% 1.2% 1.8% 1.1% 0.6% 0.3% 3.2% 0.5% 1.3% 3.0% 0.0% 0.1% n/a n/a Diamond mining as % of tax revenue 7.1% 5.2% 8.8% 11.0% 7.4% 6.0% 7.1% 13.8% 6.6% 6.2% 9.0% 12.9% 17.5% 5.4% 6.6% n/a n/a All mining as % of tax revenue 11.4% 6.5% 8.9% 11.2% 8.6% 7.8% 8.2% 14.3% 6.9% 9.5% 9.5% 14.2% 20.6% 5.5% 6.6% n/a n/a

Expenditure (N$’000) 11.1 Mining and Mineral Resources Affairs and Services 9,471 11,603 19,147 25,385 16,722 18,030 31,828 30,539 25,513 37,092 46,342 54,324 49,325 57,564 60,978 59,144 83,724 Total government expenditure 2,576,096 3,120,023 3,544,719 3,366,713 3,690,452 4,340,630 5,073,390 5 ,754,091 6,784,139 7,751,137 8,446,912 9,781,989 10,786,339 12,256,689 12,758,054 12,802,885 15,155,250 as % of total spending 0.4% 0.4% 0.5% 0.8% 0.5% 0.4% 0.6% 0.5% 0.4% 0.5% 0.5% 0.6% 0.5% 0.5% 0.5% 0.5% 0.6% page 7 8 2005-2006 eview R nnual A ines 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 M of

Revenue (N$m) Other mining

Budgeted 130.0 51.0 20.0 48.0 63.0 30.0 40.0 60.0 61.0 120.0 65.0 55.0 120.0 150.0 14.9 6.5 7.0 hamber C Actual 75.8 26.1 2.6 5.8 37.5 65.6 44.8 28.6 19.2 211.7 36.4 106.2 283.9 3.2 7.9 n/a n/a

Diamond mining Diamond mining - budgeted 73.0 0.0 53.0 60.0 105.0 105.0 100.0 100.0 200.0 200.0 185.0 475.0 745.0 1,160.0 52.0 48.3 45.0 Diamond mining - actual 62.3 0.0 90.2 164.1 126.0 85.1 89.9 505.0 161.4 142.7 439.9 764.4 1,157.4 175.4 301.4 n/a n/a Diamond profits - budgeted 14.0 9.0 25.0 3.0 10.5 0.0 Diamond profits - actual 0.0 23.3 24.9 17.4 Diamond export - budgeted 65.0 65.0 95.0 80.0 120.0 1.0 Diamond export - actual 60.3 90.9 93.6 114.2 3.1 Diamond royalties - budgeted 0.0 140.0 160.0 176.0 249.9 205.0 240.0 294.0 420.0 450.0 500.0 242.1 316.4 Diamond royalties - actual 104.1 130.8 204.2 198.8 199.3 269.4 240.0 286.1 479.1 301.9 385.4 Budgeted 152.0 74.0 173.0 143.0 235.5 246.0 260.0 276.0 449.9 405.0 425.0 769.0 1,165.0 1,610.0 552.0 290.4 361.4 Actual 122.6 114.1 208.7 295.6 233.3 215.9 294.1 703.8 360.7 412.1 679.9 1,050.5 1,636.5 477.3 686.8 n/a n/a

All mining Budgeted 282.0 125.0 193.0 191.0 298.5 276.0 300.0 336.0 510.9 525.0 490.0 824.0 1,285.0 1,760.0 566.9 296.9 368.4 Actual 198.5 140.3 211.3 301.5 270.8 281.4 338.9 732.4 380.0 623.8 716.3 1,156.7 1,920.4 480.5 694.7 n/a n/a

Total tax revenue 1,734.3 2,174.3 2,378.3 2,682.3 3,136.1 3,610.3 4,114.0 5,106.1 5,497.5 6,597.7 7,550.4 8,165.9 9,329.8 8,762.9 10,468.2 11,354.8 14,270.4 Non-diamond mining as % of tax revenue 4.4% 1.2% 0.1% 0.2% 1.2% 1.8% 1.1% 0.6% 0.3% 3.2% 0.5% 1.3% 3.0% 0.0% 0.1% n/a n/a Diamond mining as % of tax revenue 7.1% 5.2% 8.8% 11.0% 7.4% 6.0% 7.1% 13.8% 6.6% 6.2% 9.0% 12.9% 17.5% 5.4% 6.6% n/a n/a All mining as % of tax revenue 11.4% 6.5% 8.9% 11.2% 8.6% 7.8% 8.2% 14.3% 6.9% 9.5% 9.5% 14.2% 20.6% 5.5% 6.6% n/a n/a

Expenditure (N$’000) 11.1 Mining and Mineral Resources Affairs and Services 9,471 11,603 19,147 25,385 16,722 18,030 31,828 30,539 25,513 37,092 46,342 54,324 49,325 57,564 60,978 59,144 83,724 Total government expenditure 2,576,096 3,120,023 3,544,719 3,366,713 3,690,452 4,340,630 5,073,390 5 ,754,091 6,784,139 7,751,137 8,446,912 9,781,989 10,786,339 12,256,689 12,758,054 12,802,885 15,155,250 as % of total spending 0.4% 0.4% 0.5% 0.8% 0.5% 0.4% 0.6% 0.5% 0.4% 0.5% 0.5% 0.6% 0.5% 0.5% 0.5% 0.5% 0.6% page 7 9 2005-2006 eview

R Exploration and prospecting nnual A ines

M 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 of Non-exclusive prospecting licences issued 552 404 488 338 464 518 510 583 379 363 328 316

Exclusive prospecting licences awarded 24 24 53 121 178 92 155 160 70 71 75 96 hamber

C Claims registered 240 195 158 74 85 176 147 206 231 243 363 191

Mining licences granted 1 3 2 9 4 8 5 4 8 12 2 1

Note: Minerals Act only came into force on 1 April 1994

Mineral prices 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Copper cash wirebars (US$/tonne) n/a 2,336 2,282 1,913 2,307 2,936 2,297 2,277 1,653 1,571 1,814 1,578 1,559 1,809 2,931 3,747

Gold (US$/troy ounce) 384 362 344 360 384 384 388 330 294 279 279 271 310 368 411 449

Lead (US$/tonne) n/a 447 474 406 549 630 774 623 528 503 454 476 453 530 912 992

Silver (US$/troy ounce) n/a 4.10 3.97 4.31 5.33 5.20 5.19 4.97 5.52 5.22 4.95 4.37 4.60 4.90 6.70 7.40

Uranium oxide (US$/lb) - restricted market n/a n/a n/a 9.98 9.31 11.32 5.50 12.09 10.41 10.20 8.20 9.25 9.94 11.93 25.00

Uranium oxide (US$/lb) - unrestricted market 9.75 8.70 8.47 7.12 7.05 8.37 14.02 10.57 9.01 8.25 6.99 10.25 10.58 11.40 18.30 28.20

Zinc (US$/tonne) 1,520 1,122 1,239 960 999 1,030 1,025 1,312 1,023 1,076 1,128 885 778 836 1,070 1,417

Source: CMN annual reports, IJG from 2003 onwards page 80 2005-2006 eview R nnual A ines

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 M of Non-exclusive prospecting licences issued 552 404 488 338 464 518 510 583 379 363 328 316

Exclusive prospecting licences awarded 24 24 53 121 178 92 155 160 70 71 75 96 hamber

Claims registered 240 195 158 74 85 176 147 206 231 243 363 191 C

Mining licences granted 1 3 2 9 4 8 5 4 8 12 2 1

Mineral prices 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Copper cash wirebars (US$/tonne) n/a 2,336 2,282 1,913 2,307 2,936 2,297 2,277 1,653 1,571 1,814 1,578 1,559 1,809 2,931 3,747

Gold (US$/troy ounce) 384 362 344 360 384 384 388 330 294 279 279 271 310 368 411 449

Lead (US$/tonne) n/a 447 474 406 549 630 774 623 528 503 454 476 453 530 912 992

Silver (US$/troy ounce) n/a 4.10 3.97 4.31 5.33 5.20 5.19 4.97 5.52 5.22 4.95 4.37 4.60 4.90 6.70 7.40

Uranium oxide (US$/lb) - restricted market n/a n/a n/a 9.98 9.31 11.32 5.50 12.09 10.41 10.20 8.20 9.25 9.94 11.93 25.00

Uranium oxide (US$/lb) - unrestricted market 9.75 8.70 8.47 7.12 7.05 8.37 14.02 10.57 9.01 8.25 6.99 10.25 10.58 11.40 18.30 28.20

Zinc (US$/tonne) 1,520 1,122 1,239 960 999 1,030 1,025 1,312 1,023 1,076 1,128 885 778 836 1,070 1,417

Source: CMN annual reports, IJG from 2003 onwards page 8 1 2005-2006 Annex 2: Chamber eview R members and committees nnual A ines Class A Founder Members M

of Namdeb Diamond Corporation (Pty) Ltd I Zaamwani C Sivertsen

Ongopolo Mining and Processing Ltd R Webster H Nolte

hamber Rössing Uranium Ltd M Leech R Hoveka C

Class A Members AngloGold Ashanti G Arnat A J Stadler De Beers Marine Namibia O Shikongo S Schneider Okorusu Fluorspar (Pty) Ltd M T Dawe R Gevers Skorpion Zinc Mining G Boting L Williamson Rosh Pinah Zinc Corporation (Pty) Ltd C Aspeling H Fourie Langer Heinrich Uranium (Pty) Ltd W Buck G Halliday

Class B Members Salt & Chemicals (Pty) Ltd R E Stanton S Anderson Sakawe Mining Corporation K Kapwanga E Nefussy

Class C Members Diamond Fields (Namibia) Ltd I K Kaundje R J Daniel Salt Company (Pty) Ltd J Klein Jnr J Klein Snr Trans Hex Group C Neethling Storm Diamonds B S Moore G Hemming

Class D Members Ambase Exploration Namibia Ltd S Gaike M Schaefer Avmin Namibia (Pty) Ltd P A Lombard A H Matthews Bafex Exploration S Smith C Mackenzie BHP Billiton J Twidale J Parianos Kumba Resources S Clague E Mouton Mount Burgess Gold N Forrester J Moore Onganja Mining Company (Pty) Ltd R G Carr E A Barbour PE Minerals C Wium E Mbeehi Rio Tinto Namibia (Pty) Ltd K M Sims N Selibas Roburgh Exploration J J Myburgh Savanna Marble cc J Hoffman 3M South Africa C Kading Teck Cominco (Namibia) Ltd S Jennings D Newman Westport Resources (Namibia) (Pty) Ltd R Bonner D Parnham Hallie Investment No.14 (Pty) Ltd S V Bromfield A Ghigini West Africa Gold Exploration (Namibia) (Pty) Ltd K Webb J Joubert Bannerman Mining Resources Namibia P Batten O Krappman Bonaparte Diamond Mines NL M Woodborne J Midgley page 8 2 Honourable African Associate Members D Honorary Life Members African African A. African DTC Brazil Barloworld Eckhart Evi Geomac Kuehne Mega L Palfi, Holman & Associates NOSA NEC Namibian NamGem Rex Manica Siemens Rubicon Stone Selected Synergistics Trust Namibian

van O

Speiser

Mining

Quip N

Valuations

Investment

&

Africa Schalkwyk Tech Benguela

Mathews Namibia

Group Wire Portland Explosives Labour Freyer Mining

&

Consulting Hardware (Pty) Security

cc

Diamond Ports Institute Environmental Nagel

(Pty)

Namibia Company

A

Environ

Ropes

Toivo

Ltd

Namibia

Geologist

Services Authority

Company

Exploration Namibia

Industrial Ltd Holdings

(Pty) cc

of Ltd

Manufacturing (Pty) cc

ya (Pty)

Services

Mining

Ltd

Toivo

(Pty) Ltd

Consultants

(Pty) Ltd (Pty) Holdings

&

and

Ltd Finance

Ltd Ltd

Technology

Ltd

cc

J F S R H J A E K I A C L A G Palfi A E H S H L A G B H A K E D

Namaseb

Muller Quarmby

Botha Bredenkamp Kankondi O van Freyer Hawala D C Speiser E de Bruckner Lang Nel E T W C Pupkewitz Langmaak D Fairley O

Macuvele Macuvele Goodrem Nees de G

Benecke

Etzold N Lange Timke

Schalkwyk

Müller Mathews

Villiers

M M J E C S F N R Wartha E W K K D C I V J P G

A D

Kastelic

Aipinge Mathews Cyriax Heymann Grobler

F Lang Trubenbach

Bruckner H van Etzold Fassbender Liefferink Benning Wessels

Botha Kotze

Donegan Woker

Heerden

page 83 Chamber of Mines Annual Review 2005-2006 page 84 Chamber of Mines Annual Review 2005-2006 Total Honorary lifemembers Associate members Class Dmembers Class Cmembers Class Bmembers Class Class O Shikongo(1 M Dawe(President) Council oftheChamber ofMines Summary D Garbers(2 V E Mueller D Newman R Stanton W K Kapwanga G H Nolte R G Boting M Leech C Sivertsen I Zaamwani Malango(Secretary) Webster Arnat Buck A A members foundermembers nd st

Vice-President) Vice-President) 67 3 26 24 4 4 3 3 2000 64 3 28 15 9 4 2 3 2001 62 3 30 14 6 4 2 3 Okorusu Fluorspar(Pty)Ltd. 2002 De BeersMarineNamibia Chamber ofMines Namibia InstituteofMiningand Exploration &EnvironmentCommittee Salt &Chemicals(Pty)Ltd Langer HeinrichUranium(Pty)Ltd. Sakawe MiningCorporation AngloGold Ongopolo MiningandProcessingLtd. Ongopolo MiningandProcessingLtd. Skorpion ZincCorporation(Pty)Ltd. Rössing UraniumLtd. Namdeb DiamondCorporation(Pty)Ltd. Namdeb DiamondCorporation(Pty)Ltd. Rosh PinahZincCorporation(Pty)Ltd. 65 3 33 14 5 4 3 3 2003 Ashanti 59 2 28 15 4 2 5 3 2004 60 2 29 15 4 2 5 3 2005 Technology 63 2 28 18 4 2 6 3 2006 A K. Kaulinge J Namupala K MJLoubser R Frank H Ipinge A E Kandanga C Hoveka N Negongo A Dr GSchneider B Roesener V A GPalfi P S Jennings A S Clague C Neethling E Freyer B Burrell L D Newman(Chair) Exploration andEnvironment Committee L S Nekundi I Djiuella(Chair) Labour Committee J R Bonner S Smith A E Shivolo I KKaundje

Gwala Twidale

NKatamba Goosen EMacuvele Petzel A Apollus Speiser Taillard Lombard

Anglogold Rosh PinahZincCorporation Skorpion Zinc Skorpion Zinc Walvis BaySaltRefiners Ongopolo Rössing Uranium Rössing Uranium Rössing Uranium Namdeb De BeersMarineNamibia Alexandra Geological Survey(MME) AngloGold Geological Survey(MME) Palfi, Holman& Associates Avmin Namibia Teck Cominco Namdeb Kumba Resources Trans HexGroup Eckhart Freyer-Geologist Namdeb Debmarine Namibia Teck Cominco De BeersMarineNamibia Okorusu Fluorspar BHP Westport Resources Bafex Exploration Geomac Consultingcc Ministry ofMinesandEnergy Diamond FieldsNamibia Billiton

Speiser Ashanti -Navachab Ashanti -Navachab

Environmental

Consultants

cc

page 85 Chamber of Mines Annual Review 2005-2006 page 86 Chamber of Mines Annual Review 2005-2006 P D Mathews R NIsaaks Dr Nkandi-Shiimi M A T D Bansemer D Hull(Chair) Mine SurveyingCommittee C DeLange J Hengari D Mouton B D van I Isaaks S Smit C Neethling J Kastelic G Dowie M E Farmer E Botha J R Gevers(Chair) Safety Committee Uwe Rentel Ralf Schommarz David Mouton Dr Dr LimaMaartens Fiona Olivier Connie Claassen Richard Gevers Rainer Schneeweiss(Chair) Mine Rehabilitation&Closure Committee vanderMerwe Botha Tsauseb Goosen Viljoen Amunghete Viviers Antje Burke Tonder Rosh PinahZincCorporation Rössing Uranium Ministry ofMinesandEnergy Namdeb Ministry ofHealthandSocialServices Chief InspectorofMines,MME AngloGold De BeersmarineNamibia Consultant NOSA Mineworkers UnionofNamibia Langer Heinrich Rosh PinahZincCorporation Salt &Chemicals Rössing Uranium Trans HexGroup Trans HexGroup Ongopolo MiningandProcessing Sakawe MiningCorporation Namdeb AngloGold De BeersMarineNamibia Skorpion Zinc Okorusu Navachab Navachab Langer Heinrich Namdeb Westport Resources De BeersMarineNamibia De BeersMarineNamibia Okorusu Flourspar Rössing Uranium Namibia Ashanti -Navachab Ashanti -Navachab E Shivolo J Iita A J Hengari U Hiveluah B Shinguadja V M Mining CooperationCouncil J Dr FreddySikabongo Teofilus Nghitila K Mhopjeni Lisa Kawali Florence Sibanda Still tobeappointed Barra Vazembua Muharukua Corrie Botha Lionel JHowes Grant Rau  Alexandra Speiser Eiseb Malango T Dawe Viljoen Ministry ofMinesandEnergy Ministry ofMinesandEnergy Mineworkers UnionofNamibia Mineworkers UnionofNamibia Ministry ofLabour Ministry ofLabour Chamber ofMinesNamibia Chamber ofMinesNamibia AS EnvironmentalConsultantscc Ministry ofEnviron.& Ministry ofEnviron.& Tourism Ministry ofMines&Energy Ministry ofMines&Energy Ministry ofMines&Energy Ongopolo Rosh Pinah Salt &Chemicals Skorpion Zinc Sakawe MiningCorporation Sakawe MiningCorporation  Tourism

page 87 Chamber of Mines Annual Review 2005-2006 Annex 3: Chamber 2005-2006 eview

R empowerment strategy nnual A ines Summary of Proposed Empowerment Assessment and Evaluation Scheme for the Namibian M

of mining industry:

1) Ownership

hamber a) Companies to submit current ownership details C b) Submission to be made as to proposed empowerment initiatives with time-frames, . including equity participation, joint ventures, share placements/issues, employee trusts c) Companies to submit, on an annual basis, reports as to changes in ownership and implementation of ownership empowerment initiatives 2) Employee literacy/numeracy standards a) Companies to provide base level statistics of employee standards b) Companies to provide a synopsis of the type(s) of programme(s) to be implemented c) Companies to submit, on an annual basis, numbers of participants and success rates 3) Education and Training a) Companies to prepare a report containing base input statistics; ie current statistics and contributions/programmes, including primary, secondary and tertiary education, technical and skills development courses, and ancillary support and assistance activities b) Companies to submit plans for development and/or expansion programmes c) Companies to submit annual progression reports including numbers of participants (employees, dependents, external beneficiaries), costs and disciplines and any additional unspecified ad( hoc) support and assistance 4) Employment Practices a) Companies to submit a base-line report covering the range of employee benefits currently. in place; plus a separate base-line report covering current policies and strategies regarding HIV/AIDS prevention and treatment b) Companies to submit plans and programmes, including envisaged consultation forums with immediate stakeholders, regarding social development initiatives, eg housing and amenities c) Companies to submit future plans, programmes and strategies to address the HIV/AIDS pandemic d) Companies to submit, on an annual basis, reports, with statistics, regarding.. . improvements to employee benefits, achievements in social development, and HIV/AIDS initiatives 5) Community Development a) Companies to submit a base-line report covering the status of the immediate community or other identified community supported by the individual company b) Companies to prepare a plan of action and/or relevant development programme(s) . including establishment of consultation forums with the relevant stakeholders . (communities) and possible “out-sourcing” activities c) Companies to submit, on an annual basis, progress reports including activities.. . undertaken, persons benefitted and empowerment/out-sourcing/sub-contracting developments page 88 2005-2006 eview R nnual A

6) Procurement ines M

a) Companies to submit a listing of current suppliers/service providers stating (where . of

possible) the category of ownership by the designated groups as specified in the.

Affirmative Action Act and value of goods/services purchased : hamber C owned: > 50% by Namibian designated groups empowered: > 25% but below 50% by Namibian designated groups influenced: > 5% but below 25% by Namibian designated groups b) Companies to submit a report specifying the composition of its individual procurement evaluation committee or composition of the group committee c) Companies to submit, on an annual basis, a report containing changes in suppliers / service providers in terms of ownership and value of goods and services purchased 7) Beneficiation a) Companies to submit a base-line analysis of current products and level of beneficiation b) Companies to prepare a report as to factors/reasons precluding further beneficiation of existing products c) Companies to submit plans and programmes for beneficiation initiatives including time. frame, costs, job opportunities, technology d) Companies to submit, on an annual basis, progress reports citing achievements as compared to targets page 89 2005-2006 eview R References nnual A ines Ministry of Mines and Energy M of

Mines and Energy Building

hamber 1 Aviation Road

C Private Bag 13297 Windhoek Namibia

Minister: Honourable Erkki Nghimtina Deputy Minister: Honourable Henock ya Kasita

Tel: +264 61 284 8111 Fax: +264 61 284 8363

Honourable Erkki Nghimtina, Minister of Mines and Energy Permanent Secretary: Mr Joseph S Iita

Tel: +264 61 284 8312 Fax: +264 220386 Email: [email protected]

Directorate: Diamond Affairs

Diamond Commissioner: Mr Kennedy Hamutenya Tel: +264 61 284 8320 Fax: +264 61 238643 Email: [email protected]

Directorate: Mines

Acting Director of Mines: Mr Ramon Tiongco: [email protected] Mining Commissioner: Mr Erasmus Shivolo: [email protected] Chief Inspector of Mines: Mr Matthews Amunghete: [email protected] Tel: +264 61 284 8247 Fax: +264 61 238643

Directorate: Geological Survey of Namibia

Director: Dr Gabrielle Schneider Tel: +264 61 208 5205 Fax: +264 61 238643 Email: [email protected] Website: www.gsn.gov.na page 90 2005-2006 eview R nnual A

For information on government mining policy and legislation: ines M of www.mme.gov.na

Minerals Act 1992 (Act Number 33 of 1992) hamber C Minerals Development Fund of Namibia Act 1996 (Act Number 19 of 1996) Diamond Act 1999 (Act Number 13 of 1999) Minerals Policy of Namibia 2003 (Ministry of Mines and Energy)

Chamber of Mines of Namibia

President: Mr Mark Dawe Vice-presidents: Mr Deon Garbers, Mr Otto Shikongo General Manager: Mr Veston Malango OHEAP Coordinator: Mrs Theo Machoko Chamber of Mines of Namibia PO Box 2895 4th Floor Channel Life Building Windhoek Namibia Tel: +264 61 237 925 Fax: +264 61 222 638 Email: [email protected] Website: www.chamberofmines.org.na

Key documents and websites

National Accounts 1995-2005, Central Bureau of Statistics, National Planning Commission Bank of Namibia annual and quarterly reports Estimates of Revenue and Expenditure 2006/07, Ministry of Finance

Navachab: www.anglogoldashanti.com (JSE code ANANO, NYSE code AU) Diamond Fields: www.diamondfields.com (TSX code DFI) Namdeb: www.namdeb.com and Namdeb Annual Review 2005 Okorusu: www.solvay.com or www.solvayfluor.com (Euronext code SOLB) Ongopolo: www.weatherlyplc.com Paladin: www.paladinresources.com.au Rosh Pinah: www.kumbaresources.com (JSE code KMB) Rössing: www.Rössing.com and Rössing’s 2005 Report to Stakeholders (LSE code RIO) Skorpion: www.angloamerican.co.uk (LSE code AAL, JSE code ANAAL, NSX code ANM) Trans Hex: www.transhex.co.za (JSE code TSX, NSX code THX) Walvis Bay Salt: www.ncp.co.za page 9 1 page 92 Chamber of Mines Annual Review 2005-2006 Notes