Given the impending grant of a mining license, I have done some research on the processes involved - leading to an article from last year (link below) produced by the Institute for Public Policy Research in Namibia.
Th article deals with both public procurement tenders, and mining license processes - I have pasted some of the article relating to mining licenses below the link.
http://www.ippr.org.na/sites/default/files/IPPR%20Briefing%20Paper%20No%2052%20Corruption%20paper.pdf
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"Over the years, the Ministry of Mines and Energy’s (MME) licensing processes have too, like the Tender Board, become mired in suspicion, given that when it comes to the
issuance of licences and signing of extractive contracts, there exists a great deal of secrecy. (Page5)
The Ministry’s image is not helped by the publication and release of information that suggests corruption takes place when it comes to mining-related licensing. For instance, a 2009 report12 looking at mining practices in Namibia’s protected areas, in a way probably succinctly sums up perceptions of goings-on at the MME, by explicitly stating that “enforcement problems stem from a [licensing] process that is slow, inefficient, and occasionally tainted by corruption”.
The document goes on to state: “For example, industry sources say that as recently as 2003, when a company would apply for an EPL [Exclusive Exploration License] in a park,
upper level MME officials would refuse to issue the EPL, citing the park’s protected status. However, this excuse was contradicted by officials issuing licences to their
political associates or to outside groups willing to bribe them often for more invasive types of mineral prospecting.”
And in many cases, disregarding legislated regulatory systems and processes, “mining companies bypassed the corrupt MME officials … by appealing directly to the Ministers themselves”.
Speculatively, much of the alleged dodgy dealings at the MME can probably be traced to the fact that the Minerals (Prospecting and Mining) Act does not encourage accountability of decision-making, in that transparency of licensing processes is not provided for, while “Preservation of Secrecy” is explicitly addressed. Compounding this is that both according to the law and in practice, mining and exploration licenses are granted at the discretion of the Minister, placing a lot of power over the country’s mineral resources in the hands of just one person.
If the argument is taken further, then this situation must surely constitute an invite to unethical and unlawful conduct, as recently illustrated by the Supreme Court finding that former Mines Minister, Erkki Nghimtina, had acted unlawfully when in 2006 he had discretionarily granted EPLs belonging to an Australian-owned company to a prospector called Ancash, in which a prominent and politically connected individual held a significant
stake at the time.
Incidences such as these, as well as cases of politically well-connected individuals applying for and gaining EPLs and then on-selling them to foreign mining companies,
and the sale of Namibian mining and exploration licenses and operations in other parts of the world without the Namibian government being apprised of such transactions – as happened when French uranium miner Areva bought out the uranium exploration operations of a small Canadian miner a few years ago and has since started mining in the Erongo Region – has increasingly raised considerable questions and criticisms around the existing mining and exploration licensing dispensation, which prompted Prime Minister Nahas Angula to make the statement, used to headline this section, in Parliament earlier this year.
However, all does not seem lost, as government a few years ago started the process of reviewing the Minerals (Prospecting and Mining) Act of 1992. It is unclear at what stage the consultations are, but Chamber of Mines General Manager, Veston Malango, stated in February this year that the major outstanding issues that remained to be addressed were improved mining and exploration licensing regulations. As yet, it is uncertain when a new Minerals Bill will be tabled before parliament, it having been scheduled for sometime during 2010. The expectation still appears to be that a Bill, as with the new Tender Board regulations, will be ready to be tabled before the end of the year.
But once again, concern however remains over the transparency of mining and exploration licensing in any envisaged Minerals Bill".
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In light of this somewhat interesting analysis - Does anyone have insight to the number of licenses granted over the past year or so?
I did a quick Google search which found a new mining license issued in July this year to Minemakers for their Sandpiper Project, with an extension of an exploration license for Metals Australia (after a high court challenge to their right to the license, and subsequent attempt by two former parliamentarians to compromise the high court judge See Metals Australia web site for details of case.
http://www.metalsaustralia.com.au/latestnews.asp?pg=2&sub=b)
It also delivered an exploration license for Serica energy (granted this month).
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While the above could be viewed as a bit worrying, the current major shareholders in Extract/Kalahari know the environment well - Rio is a long term operator in the country, Itochu is a shareholder in the Kudu Gas field in Namibia (and later invested in Extract & Kalahari), and also has other investments there, and Stephen Galloway was the Undersecretary to the Namibian Minister of Trade, in addition to other Govermental roles he held till a decade ago.
The Chinese say, May you live in interesting times.....and we do.
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