Mining Industry Performance in 2012.

Mining Conference, May 22, 2013.

Windhoek

Veston Malango, CEO.

THE CHAMBER OF MINES

OF NAMIBIA

Outline of Presentation

1) Highlights for 2012

2) Mining Industry Performance during 2012

3) Outstanding Issues

4) Conclusions

Highlights for 2012 – A basket of bad & good news

1) 5 Fatalities

2) AREVA announced postponement of launch of Trekoppje mine (October

2012). Project to be on care & maintenance from 2013

3) AREVA exported 250 tonnes of sodium di-uranate (Nov. 2012).

4) Rössing recorded significant losses for 3rd consecutive year (N$ 43m in

2010, N$471m in 2011 & N$ 474m in 2012)

5) Mining & quarrying sector grew by 11.2% in 2012. Industry contracted by

7.9% in 2011 (NSA)

6) MME granted 3 MLs (B2Gold, Shiyela Iron & Zhonghe Resources)

7) OHORONGO Cement received IIP

8) Environmental Management Act, 2007 & Regulations, became

operational (February 6, 2012).

9) Anglo American became majority shareholder in De Beers – with

purchase of the Oppenheimer stake

Highlights for 2012 (Cont’d)

10) Oranjenmund proclaimed as Municipality (Namdeb contribution to

infrastructure) – March 2012

11) Namdeb completed re-commissioning of Elizabeth Bay mine

12) DBMN produced 1.1 m carats in 2012 (990,000 Carats in 2011), highest

record to date: 1.048 m carats in 2007

13) DBMN purchases world’s largest marine diamond vessel -- mv Peace in

Africa (November 2012) & later renamed mv Mafuta (March 2013)

14) Swakop Uranium 100 % acquired by Taurus Minerals Limited. (April

2012) – CGNPC

15) Construction of Husab mine starts (October 2012) – World’s second

largest uranium mine.

Highlights for 2012 (Cont’d)

16) Epangelo acquires 10% in Swakop Uranium (November 2012)

17) BFS completed for Tschudi Copper project.

18) Weatherly announces intention to restart the Old Matchless

underground mine.

19) GRN accepted Value Addition Committee (VAC) proposal by CoM ,

adopted in NDP 4

Summary of Mining Industry Performance in 2012

• Turnover > N$18.52 billion ( 2011, 15.8 billion)

• Wages and salaries > N$2.93 billion (2011, N$ 2.5 billion)

• Fixed investment > N$3.33 billion ( 2011, N$1.3 billion)

• Exploration spending by operating mines > N$434.9m

• Exploration spending by exploration companies > N$380.4m (B2Gold

N$57.8 m, Bannerman N$51.7m, Reptile N$70.7m, Swakop Uranium

(N$76.2m)

• Profits tax paid > N$1.12 billion

• Royalties paid > N$957.7m

• Total taxes paid to GRN >N$2.08 billion

• 7,898 permanent employees, 474 temporary employees, and 5,176

contractors

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Mining Value Added in Current Prices (N$m)

Other Mining

Diamond Mining

Source: National Statistics Agency

0

2

4

6

8

10

12

14

16

18

20

1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '17

Mining Value Added as a Percentage of GDP

Other mining

Diamondmining

Source: National Statistics Agency

0

2

4

6

8

10

12

14

16

18

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Comparison of GDP contributions by Primary Industries

Mining

Agriculture

Fishing

Source: National Statistics Agency

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Fixed Investment (current prices N$m)

Government

Mining

Source: National Statistics Agency

0

100

200

300

400

500

600

700

800

900

'95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Exploration expenditure (N$m)

Source: National Statistics Agency and Chamber of Mines

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

'93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Mining Exports (N$m)

SHG Zinc

Other Minerals

Blister Copper

Metal Ores

Rough Diamonds

Source: National Statistics Agency

0 500 1 000 1 500 2 000 2 500

NIMT

Valencia

Swakop Uranium

Reptile Uranium

Otjozondu

Gecko

Craton

Bannerman

B2Gold

Weatherly Mining

Skorpion

Samicor

Salt Company

Salt & Chemicals

Rossing Uranium

Rosh Pinah

Okorusu

Ohorongo

Navachab

Langer Heinrich

Namdeb

DBMN

AREVA

Employment in Mining sector at end 2012

PermanentEmployment

TemporaryEmployment

Contractors

Total employment:13,548

With a multiplier effect of 7,

mining provided directly &

indirectly jobs to some

95,000 people

Projections 2017

4000 new jobs

8000 during construction

11000 permanent jobs – 2017

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '17

Mining Employment (Chamber Class A, B and C members including NIMT)

Source: Chamber of Mines Annual Reports

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

1990 '91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Diamond Production (carats)

Source: Chamber of Mines Annual reports

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

'91 '92 '93 '94 '95 '96 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '15/16

Uranium Production (Tonnes)

Langer Heinrich

Rossing

Source: Chamber of Mines Annual Reports

1 537

3 000

2 993

3 258

4 351

5 983

9 145

13 586

19 451

USA

Uzbekistan

Russia

Namibia

Niger

Australia

Canada

Namibia2015/16

Kazakhstan

Uranium producing countries for 2011 (tonnes)

Source: World Nuclear Association

Outstanding Matters

Export Levy: Export Levy Bill on way to Parliament, No response yet from

MoF on Chamber submission wrt. Levy rates.

Withholding tax: Minister of Finance announced plans to reduce rate from

25% to ?

Training levy 1.5%;

• Govt. Gazette 5171 of 11 April, 2013: Notice of intention to impose a levy,

30 days period for stakeholders to make submissions – until 10 May.

• Next Govt. Gazette to announce imposition of Levy: 1st August 2013

• Levy Implementation: 1st September 2013

• 1st Levy Payment and levy return form by 20th October 2013

Outstanding Matters

Tax regime for land based diamond mining : Needs revision to ensure

sustainability

Policy on strategic Minerals: Legislation still pending

Conclusions

Despite safety challenges, uncertainty in the industry, depressed

global economic markets (especially for uranium) and three years of

stagnant growth, Namibia’s mining industry is in full swing to recovery

With the commencement of five new operations in Namibia (B2Gold,

Husab Uranium, Tschudi, Zhonghe Resources, and Shiyela Iron) in the

next two to three years, the benefits to the Namibian economy will be

far greater than in previous years. - GROWING THE CAKE!!

Our Message – Enable us to Grow the Cake!