Fri, 22 Sep 2023

The state is looking to gain more control over the country's natural resources, the Mining Ministry says

The Namibian government is considering taking stakes in local oil and mining companies to share in their profits amid increasing concerns over the ownership of valuable resources, the country's mining and energy minister, Tom Alweendo, told lawmakers on Tuesday. He said the government is currently focused on minority stakes in the firms.

"We are making a case that local ownership must start with the state, which holds ownership of our natural resources. The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay," Alweendo said.

His announcement came after a string of promising discoveries have been made in the Orange Basin off the coast of Namibia over the past year. In March, a joint venture comprising oil majors Shell, QatarEnergy, and Namibia's state oil firm NAMCOR announced the discovery of a large deposit of light oil at an exploration well, their third such discovery in the basin in several months. France's TotalEnergies also made a significant discovery of light oil with associated gas in the Orange Basin in February 2022, with testing scheduled for later this year.

Namibia is not currently producing oil, but the discoveries, if proven to be large enough for commercial development, could entail the country entering the global oil market and eventually joining OPEC, Namibia's petroleum commissioner, Maggy Shino, recently told Bloomberg.

Namibia is the world's third-largest producer of uranium with an 11% share of global output as of the end of 2022, behind only Kazakhstan (43%) and Canada (15%). It is also a major producer of diamonds and has large hard-rock lithium deposits.

Alweendo's announcement caused a selloff in mining shares on Australia's stock exchange on Tuesday. Half a billion dollars were wiped off the combined valuations of Paladin Energy and Deep Yellow Limited, two Australian companies that operate several mining sites in Namibia. Paladin, the owner of Namibia's Langer Heinrich Mine, saw its shares enter a trading halt after crashing as much as 24%. The shares of Deep Yellow, which owns the Tumas and Omahola projects, plunged 13% but later regained some of the losses to close down 6% for the day.

For more stories on economy & finance visit RT's business section


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