November 01, 2024
Mining

Govt ponders on minerals, petroleum resources local ownership

March 02, 2023
Govt ponders on minerals, petroleum resources local ownership

The government is grappling with the issue of enhancing local ownership in the country's mineral and oil exploration sectors at the backdrop of a concerning foreign domination. 

 Concerns have been raised that these sectors are dominated by foreign investors, a situation that has become a cash cow for a few lucky locals who sell their exploration licences to foreign investors, said Mines and Energy Minister Tom Alweendo. 

Alweendo stressed that awarding exploration rights to individuals who lack the necessary capability to carry out exploration has no benefit to the state, and mostly the nation that aspires to benefit from the natural resources. 

"If we award exploration rights to someone who is not able to do exploration, no exploration will take place, and without a discovery, the minerals will remain in the ground and will have no economic value to the country. This is surely not what we desire," he added. 

The situation was further exacerbated when a former employee in the Mines Ministry was  allegedly implicated in facilitating an exploration licence for Lithium which was later sold to a Chinese company, Xinfeng, for N$50 million. 

"There is a growing public voice criticising the fact that the companies exploiting our petroleum and mineral resources are mainly owned by foreign investors. I wholeheartedly agree with this view—and I may add that it is untenable, it is indefensible," said Alweendo  on Thursday in Parliament. 

To address these concerns, Alweendo suggested two viable options. The first is to establish a State-funded minerals exploration Fund, which could be funded by a portion of the royalties that mining companies pay to the State.  

The Fund would then be used to assist eligible local entrepreneurs who wish to invest in the mining sector. The second is state ownership, where the state would have shares within such exploration licences. 

"We believe that this is the most practical way to resolve the issue of local ownership. Another important issue in relation to State ownership is to establish the level of ownership that is agreeable to both the State and the investors," said Alweendo. 

However, Alweendo also cautioned that the government needs to be mindful of the fact that there is a level above which no investor will invest, a situation they do not want to find themselves in.  

"It is said that a bird in hand is worth two in the bush," he warned. 

The government is reviewing the Mining Act, and the auctioning of exploration rights will be made an option where auctioning is deemed to be the better option. 

Alweendo asked parliamentarians that "if we agree that local ownership is so important ,and we do agree; and we also argue that perhaps awarding exploration rights to those without the ability to carry out exploration is not the right way to incentivise local ownership, how then do we resolve this conundrum?  

“What must we do to ensure that in the long run, we have local ownership in the exploitation of our minerals and petroleum resources?"

 

 

 

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Last modified on Friday, 03 March 2023 19:36
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