Namibia has decided to allow China to purchase Rio Tinto’s uranium mine stake, provided it stays within the country’s rules and regulations.

In light of current infighting within some of Africa’s biggest natural resource acquisition sites in Congo, Zambia, and Tanzania, Namibia is a good example to other African countries on how to manage foreign investors.

“We have no objection to the sale provided that the buyer abides what’s expected of him by our laws,” Namibia’s Mines and Energy Minister Tom Alweendo, saidHowever, there is also a gap in terms of how investors handle their dealings in most African countries that are embroiled in long-running conflicts with huge foreign investors.

What is expected of them includes prompt payment of taxes, fair distribution of profits between government and miner, contribution to domestic infrastructure and development, and most importantly, providing decent employment for locals. But in countries like Congo, Tanzania, and Zambia, some investors have threatened to take jobs away.

Although there were 822 mining jobs cut in Namibia last year, the government has moved to stop this early by prioritizing local inclusivity at the start of this fresh agreement. China National Uranium Corporation (CNUC) Vice President, Li Youliang had to commit publicly. Youliang told a crowd in Swakopmund, the coastal city in Namibia’s west, 70km from the largest open cast uranium mine in the world, “There is no intention to replace local Namibian employees with foreign nationals solely as a result of this transaction. In fact, CNUC has a strong commitment to maintain the current level of local employees.”

Mining is the biggest contributor to Namibia’s national economy, contributing about 25 percent of all income. Rossing, the heart of Namibia’s uranium, with a population of about 45,000, currently employs 1,000 people. 

Just yesterday, Tanzania’s Foreign Relations minister, Palamagamba Kabudi lamented that Tanzania was getting little to nothing from its mines. Kabudi was speaking as part of the Tanzanian delegation that accompanied President John Pombe Magufuli to a state visit with the Namibian president.

According to Kabudi, Tanzania was enforcing harsher laws, for the benefits of its own people, saying, “There will be no more mineral development agreements. From now on, all mineral activities in Tanzania will operate under a license which is uniform, and whoever does not like those conditions can go and invest in other countries.”  

Tanzania and other embattled nations will do well to emulate Namibia, who have managed to get the most out of its mining agreements. Yesterday was proof of their successful model.

On one hand, Namibia’s tourism industry received a boost after it tapped into China’s 200 million-strong global travellers by signing an agreement with the Industrial Commercial Bank of China (ICBC). Both countries also launched a symbiotic travel agreement, one called I Go Namibia, the other called I Go China, promising exchange of travel and more business investments.

On the other hand, the government received $250,000 from the Swakop Uranium Mine, to help combat recent droughts. Prime Minister Dr Saara Kuugongelwa-Amadhila commended the mine for supporting government efforts and for its corporate social responsibility.

Swakop Uranium was acquired in April 2012 by Taurus Minerals Limited, a subsidiary of China General Nuclear Power Company (CGNPC). It owns 90 percent of Swakop. CGNPC’s investment in Namibia is China’s biggest single investment in Africa.

Mining was Namibia’s highest performing sector in 2018, recording a 22 percent growth rate, and it has again been predicted to repeat the trick in 2019, with a 40 percent increase in production forecasted. Uranium is a mainstay of the Namibian economy. Its export to China reached over $5.5 billion last year, Namibia’s highest ever exports in a year.

By Caleb Ajinomoh

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