HomeBase MetalsNamibian mining sector contracts by almost 50%

Namibian mining sector contracts by almost 50%

Namdeb’s Mining
Area 1 in Namibia
Windhoek, Namibia — MININGREVIEW.COM — 08 April 2010 – The Namibian mining and quarrying sector is estimated to have contracted by 48.3% in 2009, mainly due to depressed global demand “’ most notably in the diamond sub-sector “’ while demand for other minerals remained relatively firm.

Revealing this here in its 2009 annual report, the Bank of Namibia pointed out that diamond mining had been affected to such an extent that onshore activities had to be suspended “’ particularly during the first quarter of 2009 “’ when Namdeb instituted a production holiday.

It added that this meant only eight months of the year had been productive, and only 929 006 carats of diamonds had been recovered in 2009 compared with the 2.22 million carats in 2008. This represents a contraction of about 58.2%.

The central bank report said that for the short to medium term, diamond mining would continue to underperform due to the depletion of onshore diamonds, since only an average of 33.0% of total production was expected from land operations. Namdeb was nevertheless investigating expansion plans if global demand picked up.

Looking ahead, the bank said diamond mining was expected to recover and record a growth rate of 18.8% in 2010 before contracting by 0.1% in 2011. This was, however, far below the production levels reached during 2006 and 2007, when the total output reached 2.4 million carats and 2.3 million carats, respectively.

The report went on to say that uranium mining “’ the country’s other main mining sub-sector “’ seemed to have outpaced the performance of the diamond industry, as it expanded by 4.2%during 2009. Currently, there were two major uranium mines operating in Namibia with four new mines expected to be commissioned in the medium term.

It added that it was foreseen that uranium would eventually surpass diamond mining in its significance towards GDP growth, exports and employment creation in Namibia. In addition to the new mines to be commissioned in the medium term, the two current mines were busy expanding their operations.