JO-MARÉ DUDDY With Agency
23 May 2011
THE lack of clarity surrounding the policy announcements of Mines and Energy Minister Isak Katali on strategic minerals, state-owned Epangelo Mining and windfall taxes are causing misunderstandings and speculation, the new president of the Chamber of Mines of Namibia has said.
“This uncertainty is driven less by the nature of the policy announcement, but more by the lack of clarity surrounding the application of the policy decision,” Mark Dawe said in a media statement last week.
Dawe said the chamber will have ongoing discussions with the ministries of Mines and Energy, and Finance, on the “overall taxation regime” in Namibia.
“In addition we will seek to clarify some grey areas surrounding the ownership of and rights relating to strategic minerals, as applied to all classes of licences, whether these are existing, in the pipeline, or not yet applied for,” he said.
Katali last month said legislation would be changed as soon as possible so that state-owned companies like Epangelo could in future have the exclusive exploration and mining rights of strategic minerals such as uranium, diamonds, copper, gold, coal and rare-earth minerals. Last week, Katali also announced that Government intend introducing windfall tax so that the State could “also benefit in good times beyond normal taxes and royalties”.
Dawe called on all involved parties to wait for the outcome of the chamber’s discussions with Government. He said although Government wants to increase its revenue base, the chamber has been assured that Government is “fully committed to promoting Namibia as an attractive destination for both foreign and local investment in the minerals industry”.
“It may well transpire following the conclusion of our discussions that Namibia will become an even more attractive investment destination,” he said.
Meanwhile, at least one mining company has criticised Katali’s tax announcement, saying it could place an unbearable burden on the industry and damage the uranium-rich country’s reputation as an investor-friendly destination.
“We don’t see room for an additional take for Government unless taxation is relaxed in other areas,” Jonathan Leslie, chief executive of uranium explorer Extract Resources, told Reuters.
“We can look at the total take but the industry must remain competitive,” Leslie said.
“We see his comment in the context of an exchange of ideas on a total taxation package for the mining industry and on how the mines should be treated,” he said.
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