Namibia’s cosmetic empowerment continues

Namibia’s empowerment policy and ambition to take control of its resources have come into sharper focus after three of the country’s prime assets – a private game reserve and two massive mining interests – went on sale for a combined N$4.4 billion. The sale of the Navachab gold mine to the British, China’s acquisition of a 25% stake in Langer Heinrich and government’s slow response to the N$1.3 billion sale of the highly-prized Erindi Private Game Reserve – all in the space of three weeks - meant Namibians continue to watch as foreign investors increase their control of local resources. Namibian Sun reported on January 20 that China National Nuclear Corp (CNNC) had agreed to buy a 25% stake in the Langer Heinrich uranium mine for nearly N$2 billion, after the Australian-owned mine went on a hunt for an investor in order to ease its woes. The sale of a stake in Langer Heinrich presented Namibia with an opportunity to increase its participation in the mining of one of its leading resources – uranium – but government simply looked on as China swooped in to seal the deal. Underfunding Government’s mining firm, Epangelo, says it was aware of Langer Heinrich’s hunt for investors, but shallow funding from its shareholder meant shelving any ambitions it may have had in acquiring a stake in the Erongo-based mining company. “We did not make a bid for Langer Heinrich, but were aware of the offer to sell 25% [of the] company,” Epangelo Managing Director Elifas Hawala told Namibian Sun yesterday. “The owners of Langer Heinrich were looking for cash and needed somebody who can inject capital in the mine.” Hawala said they were caught off-guard by the developments at Langer Heinrich and could therefore only serve as witnesses to the process from a distance. “We did not have such capital and the timing and nature of the offer did not allow enough time for us to come up with alternatives, such as the formula we used to acquire a stake in Husab.” Epangelo, which government established as the nation’s vehicle for acquiring meaningful stakes in local mining resources, owns a minority stake in the Husab reserve, which remains heavily foreign-owned. China Guangdong Nuclear Power Corp had invested N$23 billion (US$2.3 billion) into the acquisition of the Husab project in 2012. Navachab becomes British On Tuesday, AngloGold Ashanti announced that it had signed a binding agreement to sell the Navachab Gold Mine to Britain’s QKR Corporation, as local resources continue to exchange between foreign hands. With this transaction, Epangelo is expected to own an interest in Navachab, although Hawala was yesterday reluctant to divulge details of its involvement. “We have not yet come to a point of divulging such information, and are bound by confidentiality undertakings not to divulge such information, until the parties have concluded the potential transaction,” he said. Giyani Gold, co-owned by local businessman Knowledge Katti, tabled an audacious N$1.3 billion bid for Navachab last year, but the deal was apparently scuppered. Giyani was to be backed by Pan African Resources, a company linked to Cyril Ramaphosa, deputy president of the African National Congress (ANC), South Africa’s ruling party. Epangelo remains heavily undercapitalised and Hawala admitted yesterday that this situation has crippled the ambition of the State-owned entity to spread its wings effectively. “The fact that we have not been properly capitalised puts us at some disadvantage to compete with players such as China,” he said. “However, we also understand that the State, our shareholder, also has competing priorities and we try by all means to be innovative and come up with ways to acquire assets, despite our limited resources.” Government position In 2011, Mines and Energy Minister Isak Katali spoke of a so-called “strategic minerals policy”, aimed at increasing Namibia’s participation in exploiting key minerals. The policy is still in the drafting stage, pending the final input of the Office of the Attorney-General. Katali yesterday said there is little he can do to prevent increased foreign control of local mineral reserves. “Strategic minerals was my way of ensuring the increased participation of Namibia in its own resources, but until this becomes a law, I am obliged to protect the existing legislation on mining,” he said. Holding onto Erindi Last week, the owners of Erindi announced that they were putting it up for sale and hinted that the Chinese were again in the lead to acquire what many citizens believe should be owned by Namibians. After a massive outrage by the worried public, it was announced toward the end of last week that government will be considered preferentially to acquire Erindi, but it is not known what its response to the offer will be. Government continues to be extremely worried that local resources, especially minerals, are not benefiting locals adequately. Taxes and royalties continue to be the key sources of beneficiation to locals. Although Namibia is ranked as the fourth largest producer of uranium in the world, this sector has no active participation by locals. Rössing Uranium is owned by Britain’s Rio Tinto, the Valencia mine is owned by Canadians and Areva by the French, while Australians own Langer Heinrich and Etango.