By Hilary Mare
MINING companies paid an excess of N$4 billion to government in taxes in the previous financial year, the 2017 chamber of mines annual report reveals.
The recently released report makes note that chamber members paid out N$3.66 billion in corporate taxes and royalties and N$113.2 million in export levies in 2017.
Furthermore, Government received N$817 million as PAYE.
Johan Coetzee Chamber of Mines President went on to highlight in the report that these figures exclude dividends accruing to Government from operations they are shareholders.
“Although the sector’s contribution to the fiscus is small in comparison to main sources of state income, such as VAT receipts, it remains an important stream of Government revenue. The industry also makes large contributions to foreign revenue and accounts for approximately 50 percent of the country’s exports.
“Mining contribution to taxes and overall economic growth is expected to increase in the near future from the combined impacts of smaller projects as well as the ramping up of Husab mine,” elaborates Coetzee in the report adding that the mining sector performance improved significantly in 2017, posting strong growth compared to a contraction recorded in 2016, largely fuelled by improving commodity prices.
According to the report, fixed investment by the sector increased from N$3.46 billion in 2016 to N$5.73 billion in 2017.
“The uptick is also an indication that confidence is being reignited by improving commodity markets, and that operations are positioning themselves to benefit from the favourable economic conditions.”
Similarly, exploration expenditure has seen a positive trend since 2015, with total exploration by mining operations and exploration companies increasing from N$528 million in 2016 to N$562 million in 2017.
Notably, however, is expenditure undertaken by exploration companies alone, which spiked from N$99 million in 2016 to N$303 million in 2017, representing an increase of 204 percent.
“A large proportion of these projects are likely to enter mine development in the near term,” added Coetzee.
“Aside from the uranium sector, the immediate outlook for the mining sector is promising. In tough economic times, it also remains evident that mining is the bedrock of the Namibian economy. However, to ensure that the sector maximises from high commodity prices and continues to grow, it is imperative that loose ends in the policy framework are addressed with urgency.
“With actioned intent recently displayed by Ministry of Mines and Energy (MME’s) new administration to work directly alongside with industry, the Chamber is confident that pending issues, which have hamstrung investments into exploration, will be resolved. It is against this background that we hope to see the country once again become the most attractive destination for mining in Africa in the 2018 Fraser Survey of Mining Companies.”
Expenditure on training and skills development also increased substantially for the period under review from N$82.8 million in 2016 to N$184.9 million in 2017. In 2017, mining and exploration companies collectively employed 9,643 people in permanent positions. Total employment by the sector, which includes permanent, temporary positions and contractors increased from 15,673 in 2016 to 16,905 in 2017.
Chief Executive Officer of the Chamber, Veston Malango also noted that the need for stronger partnerships between private sector and government has become ever more apparent as Namibia’s development is currently constrained by a weak economic environment.
“Given the sector’s positive performance in 2017 and the future growth prospects for mining, the Chamber remains optimistic that the industry will now not only underpin economic growth, but will also play a major role in driving Namibia’s economic recovery. Investment into the sector can only be enhanced through building on the collaborative and constructive relationships the industry has established with Government over many years of close cooperation,” he said.
Confidente. Lifting the Lid. Copyright © 2015