Boston, MA -- (SBWIRE) -- 07/31/2012 -- We forecast Namibia's mining industry to grow by 18.4% in 2012 in real terms, following an estimated 25.4% increase in 2011. We forecast the value of the mining sector to grow to US$2.6bn in 2012. Growth is expected to reach 18.3% y-o-y in 2013, on the back of a surge in new uranium mining projects. Namibia's real mining growth over 2012-2016 is projected to average 13.9% a year, with the industry reaching a value of US$4.2bn in 2016.
Diamond Prospects For Namdeb And Co.
In May 2012, Diamond Fields International (DFI) confirmed the renewal of its mining licence for the ML32 Concession offshore diamond deposit for a further 10 years to 2022. The deposit is situated north of Luderitz and covers an area of more than 17,600 hectares along the Namibian coastline to the Galdovia Reef. The deposit, which produces about 88,000 carats a year, has a potential inferred mineralised resource of 42mn cubic metres, making it the largest deposit in DFI's portfolio. News of DFI's licence renewal promises some competition in a diamond sector otherwise almost exclusively under the control of market leader Namdeb. The company controls the largest alluvial and diamond mining operations in Namibia and accounted for 92.1% of Namibia's diamond output in 2010, producing 1.47mct. Namdeb plans to increase production from its flagship Elizabeth Bay mine, from 250kct (thousand carats) to 400kct by 2014, an increase that will be partly offset by the closure of Namdeb's Bogenfels mine, which produced 53kct in 2010.
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H112 saw increased speculation regarding the possible introduction of a super tax on mining activity in Namibia, leading to the possibility of further friction between the Namibian government and the independent Chamber of Mines. In February, President Mark Dawe told Reuters that the chamber was in negotiations with the government regarding the implementation of the super-tax, which would likely be introduced in 2012. According to Dawe, miners are in favour of a common super tax on all operations across the mining sector in lieu of a suggested government surcharge on the profits of some companies during periods of economic growth. The super tax is expected to place less of an administrative burden on companies operating in Namibia. The news follows strong lobbying by the Chamber of Mines in 2011, which resulted in the government aborting plans to raise the corporate income tax rate for the nondiamond mining sector from 37.5% to 44%. Despite the outcome, the Chamber believes controversy surrounding the tax has had a negative impact on foreign mining activity in the country, with Dawe indicating that 'a number of investors' had been scared away from the sector.
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