Sustainable mining important for future growth in Namibia

Global forecasts indicate that the demand for minerals will grow exponentially with minerals such as graphite, lithium, copper, and cobalt, which could increase by 500% by 2050, to meet the growing demand for clean energy technologies and to maintain global warming by 2100 to below 2 °C. The World Bank Group has estimated that this increased demand for minerals will necessitate a global mining investment of $1.7 trillion. Attracting a portion of this investment to low- and middle-income nations could promote economic growth, job creation, and local development.While this is a tremendous opportunity for countries rich in mineral resources such as Namibia, it must be addressed effectively and sustainably as the increase will be influenced by a variety of factors, including population growth, the need for new technologies and shifting stakeholder expectations. The global shift to clean energy production in response to environmental regulations, lifestyle demands, and the need to reduce greenhouse gas emissions remains imminent. All of that required decision-makers to use holistic approaches to evaluate the opportunities that arise.Mining is a major source of Namibia&#039;s gross domestic product (GDP) and foreign exchange revenue and supplies basic elements to most economic sectors but has also a negative legacy social-environmental impact. However, for the Namibian mining sector to mine sustainably, a number of areas need to be addressed and improved as discussed here.Government ResponsibilityTo begin, increase exploration investment into critical minerals and project pipelines to increase access to mineral resources and reserves. This investment could be made through local companies&#039; partnerships and by increasing collaborations with manufacturers of electric vehicles. It could also be achieved through the government incentivising the companies involved in the exploration stage to attract more capital.Second, establish adequate government assistance through the development of friendly legislation and an effective monitoring system for mining operations to ensure that enterprises comply with mining and environmental laws.Next, develop mineral road maps and action plans; for example, identify a list of critical minerals that are either essential to global energy transition or deemed necessary to the domestic economy and note who needs them. Then pay close attention to critical minerals through various Namibia Critical Minerals Exploitation Plan initiatives. The road maps and action plans should be supported by scenario planning that provides a solid foundation to underpin medium- and long-term plans for the mining sector and map out and prepare for possible alternative futures and interactions with other sectors.In addition, invest in technology, innovation, education, and human development. New technology and innovations can provide an opportunity to enhance mineral and metal recovery from low-grade ores and waste streams, offering the potential for a step change in future supply volumes. The future of the Namibian mining sector also depends on the quality of education that we provide to the engineers, geologists, metallurgists, and all others associated with mining. Therefore, for the mining sector to be sustainable and competitive, the government and private sector need to double their current investment in education and human development to produce a dependable and capable workforce. Decision-makers need to understand that the problem of attracting investment capital is complex and involves multi-conflicting criteria; therefore, holistic approaches such as the Multi-Criteria Decision Analysis (MCDA) method could assist.Corporate CitizenryThe second arm is the private sector, including the mining companies and society. For example, the Namibia Chamber of Mines and Namibia Chamber of Environment motivate, advocate, and monitor the mining sector and must be responsible in their operation to ensure mine sustainability for the present and future.The Namibian mining sector has matured over the years as most of the mining companies that have been operating in Namibia for a decade or more have come to understand that their role as corporate citizens is to contribute to the sustainable development of the mining industry. As such, we have observed for years that mining companies play active roles by investing in areas such as education and human development, agriculture, employees&#039; and communities&#039; health and management of natural resources. Therefore, the success and sustainability of the mining sector depend on the partnership and collaboration between the government and private sector in order to manage the minerals.Methodology to enable better decision makingThe social-environmental impact of mining operations in Namibia is localised and historical, resulting from 260 closed and abandoned mines without any closure plan (Andreas et al. 2020) before the Minerals (Prospecting and Mining) Act, No. 33 of 1992 was promulgated. The responsibility for rehabilitating and reclaiming these historically abandoned mines now lies with the State. In 2020 Andreas et al. assessed available awareness of the threats that disused mines present to natural and human environments in Namibia. They established that there are limitations to mine rehabilitation and that the 260 abandoned mines are a "significant hazard throughout the country". The problem of abandoned mines rehabilitation evaluation and classification is complex. It involves multi-conflicting criteria that are not always precise, such as imprecision information, uncertain environmental impacts, and multiple decision processes.To make better decision tools such as the Multi-Criteria Decision Analysis method, can be applied to the Namibia mining industry. It is important to understand that this is an advanced method that can assist decision-makers in analysing a complex problem in which the decision-maker has to evaluate a finite alternative to either describe rank, select or classify projects of the issue, often using uncertain criteria due to different assumptions and conflicting perspectives.Due to the complex and unique nature of problems of investment decisions in the mining sector, the MCDA is considered a suitable tool. The unique features of mining that make it right include non-renewable resources, a long lead time to production, slow outcomes, a heavily regulated industry, massive capital requirements, irreversible investment, uncertain estimation of geological resources, complex stakeholder interactions and relationships, ambiguity, uncertain economic trends, and concerns about environmental impact. The logic is that better tools to support decision-making must be implemented to minimise mining investment&#039;s negative impact and maximise the value for stakeholders.Decision-makers in the public and private sectors such as investors and bankers can use this methodology to evaluate and classify mineral projects in Namibia to know how best to allocate capital. MCDA assist to synthesise and utilise efficiently the existing information about the mineral project ecological, social, and economic impacts.Local approachThe Nedbank Namibia CIB team and Nedbank Group have been involved in the Namibia mining industry for many years. Nedbank and other commercial banks have partnered in the N$7bn (US$468m) financing transaction for approximately 80% of the Debmarine Benguela Gem vessel construction costs. In total, Nedbank Group has contributed about 40% of the financing.Nedbank requires that the project meets the minimum standard in other factors, namely the environment, social impacts, corporate governance, and legal aspects. This is done to ensure that with our project we leave the earth in a positive state for the next generations, while the current generation still benefits. As a bank, we are led to finance several mining projects some of which pose major environmental, social and governance (ESG) challenges. Therefore, a balance has to be found to generate revenue, employment, and infrastructure development from mining projects. That is why we have adopted sector policies laying down strict ESG and financial factors meant to govern our financing and investments in mining. Nedbank Group expects mining companies that come to seek finance or service to follow these, as Nedbank wants the mining projects to be developed and operated in accordance with existing national legislation and international laws.In addition to compliance with these regulations and standards, there are sets of specific factors that the bank expects to be respected by mining projects and mining companies. Such factors fall into two categories: mandatory requirements and evaluation factors. Mandatory requirements must be understood as absolutely essential: they have to be met without exception before Nedbank considers providing financial products and services to any mining projects or companies. Those factors include the mining project&#039;s required licenses and permit to mine and use the land.Besides these mandatory requirements, evaluation factors have been identified to develop the analysis performed by Nedbank on mining projects and companies. To determine the mining project&#039;s credit feasibility, Nedbank requests mining companies to provide us with a project financial (cash flow) model drawn up to reflect the technical and economic inputs as well as the debt capacity. That means that from the project promoter&#039;s side, we expect them to understand their project&#039;s geological and technical factors compared to their peer. In addition, they must present their management and staffing plan to implement the company&#039;s strategic roadmap, whilst managing the operation to achieve the plans without any adverse concern.Sustainable FuturesNedbank&#039;s approach is at the heart of the Climate-Smart Mining Initiative, which was launched jointly in 2019 by the World Bank and IFC. The initiative aims to help resource-rich developing countries mine, process, and recycle minerals needed for low-carbon technologies and other important sectors in a way that does not hurt the environment or the economy. Consumers are evolving as well as the planet. Future [renewable] technology users prioritise products that are ethically produced. This implies that all inputs—whether they be mineral, plant, or service inputs—must be delivered sustainably. Therefore, promising growth prospects in the local mining industry, supported by a sustainable finance strategy, will be essential in ensuring that Namibians have an inclusive and secure future.

Sustainable mining important for future growth in Namibia

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Namibian Sun 2025-04-04

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Sustainable mining important for future growth in Namibia

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Namibian Sun 2025-04-04

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