Tax policy under the spotlight

15 July–15 August 2011

Namibia has a strong track record of attracting foreign investment, and many well-known international companies play an active role in a wide variety of sectors including agriculture, fishing, mining, manufacturing, construction, tourism, telecoms and financial services. The Namibian Constitution promotes foreign investment and protects private property. Every month Flamingo brings you a round-up of the most important business and economics news from Namibia put together by Robin Sherbourne of local economic consulting company Namibian Economics. To receive regular updates on the Namibian economy, email<robin@namibianeconomics.com>.

Namibian gold exploration company Auryx announced its intention to move ahead quickly with its plans to bring a new gold mine on stream at its Otjikoto project near Otavi. The company says it will announce a new resource estimate by the beginning of 2012, followed by a Definitive Feasibility Study completed by the second quarter.

Namibian mining company Shali Mining signed a deal to purchase Kombat Mine from AIM-listed Weatherly International. Kombat Mine was closed in 2008 because of flooding.

The Naute table-grape vineyard of the Namibia Development Corporation 40 kilometres south of Keetmanshoop is to be expanded by 20 per cent from its present 40 hectares.

Cash-strapped consumers were the main reason only 9 per cent of surveyed Namibian manufacturing businesses reported higher levels of production in the second quarter of the year, according to the quarterly survey carried out by Simonis Storm Securities and the Namibian Manufacturing Association.

The Australian Stock Exchange and Toronto Stock Exchange have listed Extract Resources, which is hoping to build the world’s third-largest uranium mine in Namibia. Extract Resources has been talking to several companies about potential off-take and funding deals.

Bannerman Resources, the developers of the Etango Uranium Mine, has implemented an employee incentive plan that enables employees to become shareholders.

Langer Heinrich Uranium announced it had hit an all-time monthly record production of 355 513 pounds of uranium oxide in June.

The Minister of Finance announced a raft of new tax measures aimed at plugging the gap left by declines in revenue from the South African Customs Union. Namibia’s Chamber of Mines put out a press release stating it was busy engaging Government on the new proposals.

House prices in central Namibia have been on a ‘worryingly high price escalation cycle’ since last July. According to the latest FNB Namibia House Price Index, the trend could continue for most of 2011.

Laurelton Reign Diamonds, a subsidiary of Tiffany & Co, officially opened a new N$25 million diamond cutting and polishing factory in Windhoek. The diamonds the factory will cut and polish are purchased from the Namibian Diamond Trading Company.

Following delays in re-zoning land, SABMiller is no longer considering only Okahandja, but is also looking at Tsumeb, Oshakati and Ondangwa as the site of its new 220 000 hectolitre Namibian brewery.

The IJG Business Climate Index, produced by the Windhoek-based Institute for Public Policy Research, rose 2.9 points in June, thanks to improved consumer and investment confidence.

Namibian cement producer Ohorongo Cement said it expected the temporary ban placed on its exports to Angola by the Angolan Government to be lifted by the end of the year.

Brazilian oil independent HRT raised its estimate of potential oil reserves in the Orange basin off Namibia after an assessment by an independent consultant, DeGolyer & MacNaughton, bringing the company’s total net resources to 7.9 billion barrels of oil.

Namibia’s third National Population and Housing Census has been put into operation. The cost is expected to be more than N$300 million.

Petroleum major BP partnered up with Chariot Oil & Gas through a farm-out agreement that will see it take 25 per cent of Block 2714A.

Annual private-sector credit growth reached 12.9 per cent in June, its highest growth rate in three years.

Extract Resources announced that new data has confirmed that uranium reserves at Husab now stand at 280 million tonnes, 37 per cent more than estimated in April. The grade of the ore in Zones 1 and 2 have increased from 497 parts per million to 518 parts per million.

The Namibia Ports Authority (Namport) have shortlisted a single Chinese contractor, China Harbour Engineering Company, from a pre-qualification round for a N$2 billion tender.

Ohorongo Cement, which started operations in February 2011, stated that increasing imports of cement from Asia, in particular China, were threatening jobs at the plant.

President Hifikepunye Pohamba opened the N$185 million third phase of the Wernhil Park Shopping Mall, bringing the Ohlthaver & List group’s investment in property development in Windhoek’s central business district since 2003 to N$600 million.

Frost & Sullivan reported that uranium was set to become the biggest player in Namibia’s mining sector and will overtake diamonds as the country’s major foreign-currency earner.

The Public Private Partnership between Namibia Wildlife Resorts and the Prosperity Group to redevelop the Daan Viljoen Game Park outside Windhoek is expected to open its doors next month.

The price of fuel remained unchanged after the price of crude oil dropped nearly 6 per cent in July.

Consumer inflation in July fell to 4.8 per cent from 5.4 per cent in June.

To receive regular updates on the Namibian economy, email robin@namibianeconomics.com

This article appeared in the Sept’11 edition of FLAMINGO Magazine.