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The Chamber of Mines of Namibia Annual Review 2007 - 2008 Mission: To efficiently promote, encourage, protect and foster responsible exploration and mining in Namibia, to the benefit of the country and all stakeholders SIMON WILKIE SIMON Vision: To be acknowledged as the champion of the exploration and mining industry in Namibia Contents Highlights of 2007 - 2008 ............................................................................2 President’s statement ................................................................................3 Chamber activities ......................................................................................6 Overview of operations ............................................................................12 Review of operations ................................................................................17 Navachab ....................................................................................................................................... 17 De Beers Marine Namibia ......................................................................................................... 21 Langer Heinrich ........................................................................................................................... 25 Namdeb ......................................................................................................................................... 29 Okorusu Fluorspar ..................................................................................................................... 35 Rosh Pinah Zinc Corporation .................................................................................................. 39 Rössing Uranium ......................................................................................................................... 43 Salt & Chemicals .......................................................................................................................... 47 The Salt Company ....................................................................................................................... 49 Skorpion Mining ........................................................................................................................... 51 Weatherly Mining Namibia ....................................................................................................... 55 Features .......................................................................................................59 Chamber of Mines Uranium Stewardship ............................................................................. 59 Overview of exploration activities .......................................................................................... 66 Mining and the economy ..........................................................................76 Annex 1: Key statistics .............................................................................82 Output by mine ........................................................................................................................... 82 Employment by mine .................................................................................................................. 84 Mining and the economy ........................................................................................................... 86 Tax revenue .................................................................................................................................. 88 Annex 2: Chamber members and committees 2008 ...........................90 References ...................................................................................................95 Glossary .......................................................................................................96 Chamber of Mines Annual Review 2007-2008 1 highlights of 2007 - 2008 Expansion by Rössing and Langer Heinrich leads to Namibia becoming world’s fourth largest Namdeb uranium producer produces over 2 million carats Areva’s Trekkopje mine granted 25year mining licence Forsys’ Valencia mine granted 25year mining licence Rosh Pinah mine completes Namibianisation transaction Paladin Over N$1.6bn taxes paid Energy Mining value added N$7.6bn lists on main board Mining exports N$15.3bn of Mining investment N$2.3bn NSX 92 new bursaries awarded Chamber of Mines Annual Review 2007-2008 2 President’s statement • “ Despite the dramatic nature of the world economic crisis, it was by no means all doom and gloom for Namibia’s mining industry. ” • • This last year has been yet an- other challenging one for Namibia’s mining industry as the world econ- omy turned dramatically send- ing commodity prices tumbling. The year began with international prices of oil and food skyrocketing spurring the South African Reserve Bank to raise interest rates three times in an attempt to bring infla- tion back to within its target band of 3-6%. By contrast the Bank of Na- mibia decided to keep interest rates on hold believing the rate hikes in 2007 were already enough to tack- le inflationary pressures. However, as the world financial crisis spilled WILKIE SIMON over into the so-called real sector, situation of oversupply. The time industry, which had so painstakingly the economies of the US, the Euro between mining a diamond and been brought to life since the passing Area, the UK, Japan and elsewhere selling it is now longer than ever of the Diamond Act in 1999, also felt slowed significantly sending com- and few if any companies are willing the brunt of the crisis. All eleven modity prices plunging. The idea that to stockpile for any length of time. NDTC sightholders were affected developing country economies had Namdeb and De Beers Marine as local sights went unsold. The “decoupled” from the rich econo- Namibia were obliged to suspend Honourable Minister of Mines and mies was debunked as growth rates production in line with declined Energy estimated that some 1,000 in developing economies including demand and carry out severe cost- workers were laid off. the BRICs economies of Brazil, Rus- cutting measures. Shareholders sia, India and China slowed sharply were asked for letters of support By the third quarter of the year too. Thus a year which had begun to see the company through these copper prices were also falling fast with interest rates high as Namibian tough times. Fortunately, although forcing Weatherly Mining Namibia policymakers worried about infla- voluntary redundancies were to undertake extreme cost-cutting tion ended with interest rate cuts encouraged, Namdeb has succeeded measures. Kombat mine had already in a desperate attempt to sustain in keeping most of its workforce on been closed earlier in the year as the growth and avoid recession. paid leave. company was unable to deal with constant flooding. However, as prices The effects of the world slowdown The slowdown in diamonds did headed down from over US$8,000 were quickly transmitted to not only affect diamond mining to below US$3,000 per tonne, Namibia’s mining industry, oriented companies. Namibia’s fledgling Weatherly decided to place all its as it is on exports to many of the diamond cutting and polishing mines under care and maintenance world’s major economies. Namdeb once again recorded extraordinary Mineral Unit Year end price (2007) Year end price (2008) performance with over 2 million Uranium US$ / pound 90 54 carats mined. However, with the main Gold US$ / troy ounce 833.75 843.50 diamond market of the US suddenly Copper US$ / ton 6,676.50 2,770.00 contracting as US consumers hit Zinc US$ / ton 2,290.00 1,100.00 the brakes on spending, the world Lead US$ / ton 2,532.00 900.00 diamond market suddenly faced a Source: Nedbank SA Chamber of Mines Annual Review 2007-2008 3 Uranium Copper Gold Langer Heinrich Weatherly Mining AngloGold Ashanti P25 P55 P17 in recognition that at US$5,000 exploration companies: Bannerman, Review shows, exploration compa- per tonne its costs of mining made Deep Yellow, and Extract Resources. nies have been spending significant continued production unviable. Exploration by TEAL on the Otjikoto sums of money on their activities Some 643 workers were retrenched gold project also appears to have during the year. with the last day of production reached a critical stage. We expect taking place on 20 December 2008. to see all these projects making Taxation equally good progress in 2009. However, despite the dramatic • Reflecting the growing impor- nature of the world economic crisis, The Chamber welcomes the move tance of the non-diamond mining it was by no means all doom and towards greater Namibianisation at sector, Government revenues from gloom for Namibia’s mining industry. Rosh Pinah mine and congratulates profits and royalty taxes as well as As so often in times of economic Exxaro, PE Minerals and Jaguar dividends from Namdeb and Ross- upheaval, gold prices remained Investments on concluding the deal ing were about equally split between relatively firm ending the year above after so many years of work. It is diamond and non-diamond mining US$800 per ounce which helped indeed heartening to see efforts due partly to the introduction of Navachab gold mine achieve healthy of this nature and I hope it will the minerals royalty tax in 2006 on financial results. Fluorspar prices too lead to greater investment and the minerals other than diamonds and rose allowing Okorusu Fluorspar to extension of the life of mine to a dimension stone. In total the min- record its first profit in many years. critical

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