Namibian government denies reports of nationalisation, shares rebound
The share prices of a number of ASX-listed miners have rebounded after the Namibian government labelled reports of possible nationalisation of the country’s resource sector as “disappointing”.
The international media reports sent a shock wave through the global resources sector and stock exchanges this week, with a number of ASX-listed companies in particular seeing their share prices slashed.
However, market value bounced back strongly following the release of a clarification from the Namibian Ministry of Mines and Energy.
By the close of the ASX on Friday, Arcadia Minerals’ (ASX: AM7) share price had risen 3.3%, Askari Metals (ASX: AS2) was up 3.7%, Bannerman Energy (ASX: BMN) had risen 2.6%, Elevate Uranium (ASX: EL8) was up 1.6%, Golden Deeps (ASX: GED) up 8.3%, Noronex (ASX: NRX) had climbed by 6.3%, Paladin Energy (ASX: PDN) had leapt by 10.7% and Wia Gold (ASX: WIA) had rebounded by 9.4% in trade that day.
Ministry speaks out
In its first public statement following the uproar over remarks attributed to Namibian Mines and Energy Minister, Tom Alweendo, the country’s Ministry of Mines and Energy said it was “disappointment” that these “wrong perceptions’ had been created.
It said that the “disappointing” report(s) had alleged that the “Namibian Government was considering taking stakes in mining and petroleum companies”.
It was against this background, that the Ministry decided it needed to “clarify the misconceptions” circulating in the media.
The Ministry declared that the Government has no intention to seize any stake from existing mineral or petroleum licence holders and “remains committed to upholding the sanctity of contract.”
But the Ministry did not completely play down perceptions that the government may acquire mining and petroleum interests in the future.
It stated that Namibians are and remain disadvantaged due to not having financial and other means to exercise their rights in relation to natural resources.
“… as such the state as supreme owner of these natural resources, may demand a certain minimum stake through public enterprises such as EPANGELO Mining or NAMCOR in any mineral or petroleum licences that may be issued in future,” the Ministry declared.
“The Ministry would, however, like to inform our stakeholders that the Namibian people have a legitimate expectation of having a share of ownership in the exploration and mining of our countries’ natural resources.”
“Cognizant of the fact that many Namibians might not have individual capacity or the requisite resources to realise these rights or expectations in their individual capacities, it would be just that the Government acquire these rights on their behalf.”
“The Government will exercise these rights in a balanced way considering the interests of both investors and the Namibian nation. The Ministry would like to reiterate this is normal practise in Namibia especially in the petroleum and mining sectors and we should maintain such practise in the interest of all our stakeholders.”
Paladin Energy and Elevate Uranium speak up
One of the companies hardest hit by the pummeling of Namibian miners earlier in the week, Paladin Energy noted that it has been undertaking regular ongoing dialogue with all relevant Namibian Government Ministries as it progresses the restart of mining activities at the Langer Heinrich mine.
In a statement made prior to the Ministry’s clarification, the company declared that it was not aware of any imminent proposed Namibian legislative changes that would affect its ownership of the Langer Heinrich mine, in which Paladin holds a 75% interest.
Elevate Uranium also confirmed that it was in ongoing communication with relevant government ministries and departments and in particular, the Ministry of Mines and Energy with regards to matters related to mineral licences in Namibia.
Elevate noted that matters of policy and procedure regarding the Namibian mining industry are dealt with by the Chamber of Mines of Namibia and the Namibian Uranium Association, of which Elevate is an active member, also communicate directly with Namibian Government Ministries.
“The company is not aware of any change to Namibian government legislation regarding this issue,” the company stated.
“The company’s past experience has shown that the Namibian Government understands and values the contribution that foreign investment by the mining industry contributes to the overall Namibian economy through local purchase of goods and services, salaries, royalties, taxes and other government charges.”
Colourful history of damaging reports
Similar media reports of government nationalisation rumours have been circulating for decades.
Back in 2011, the Government also had to publicly rescind similar reports that it would be nationalising the mining industry. Similar assertions were reported in 2019.
However, despite years of uncertainty, Namibia is still considered one of the safest mining destinations in Africa.
In the most recent Fraser Institute Global Survey of Mining Companies, Namibia improved on its overall Investment Attractiveness Index by seven points and ranked 38th amongst the 62 global jurisdictions surveyed.
The country was ranked as the third highest of African destinations on the respected survey’s Policy Perception Index (PPI).
The Chamber of Mines of Namibia said this is evidence that the nation is perceived to have a relatively stable and attractive policy environment compared to other African countries.
“Namibia’s performance in the 2022 Fraser report is fairly good, although could have been better. This is especially so as the Namibian government has greatly improved legislation that encourages exploration,” said the Chamber of Mines President, Zebra Kasete.
Unfortunately, last week’s “disappointing” hit on ASX listed Namibian miners has not helped the Chamber as it moves to raise the nation’s global perception.