May 12, 2011 / 9:51 AM / 9 years ago

Uranium miner says Namibia not headed for

SYDNEY (Reuters) - An Australian company exploring for uranium in Namibia said it did not believe the African country was heading toward nationalising its mining industry after proposing more state control over the sector.

“We see this simply as participation, not nationalisation,” Bannerman Resources Chief Executive Len Jubber told Reuters.

Namibia has worried investors with a recent decision to grant future rights to strategic minerals to a state company, even though it has sought to assure the sector the new policy will not apply to existing mining and exploration licences or lead to nationalisation.

The decision raised concerns within Nambia’s largely private and foreign-owned mining industry of a shift to state control of the sector, a theme also raised in neighbouring South Africa by a faction of the African National Congress (ANC).

A global mining boom that’s led to huge increases in profits by mining companies has mine-dependent economies questioning whether enough of the revenue is finding its way public coffers for use to improve social services.

Namibia is trying to reduce its current unemployment rate of around 50 percent to 4 percent within three years.

Some of the countries, such as Australia and South Africa are concerned “two-speed economies” brought on by the boom were creating nations of haves and have nots.

On April 20, the Namibian Minister for Mines and Energy Isak Katali made comments in the Namibian parliament regarding the proposed rights of state-owned mining company, Epangelo Mining Company (Pty) Ltd, in the development of minerals projects for certain “strategic minerals” — uranium, copper, gold, coal, diamonds and rare earth metals.

Katali this week issued a clarification of his comments, saying ownership of existing exploration licences wouldn’t be affected by the proposed mineral policy changes.

Jubber said he welcomed greater interest by Namibia in investing in future minerals projects, noting the country was already the world’s fourth-largest producer of uranium.

“My gut feeling is that they will be looking at ten to 15 percent participation,” Jubber said.

Another uranium miner, Paladin Energy, this week said it did not believe the proposed policy change would affect its operations in the country.

Paladin operates the Langer Heinrich mine in Namibia.

South Africa is also looking for ways to extract more revenue from mining companies. Government officials recently told Reuters this could lead to higher state equity in mining companies or imposition of a mining tax on excessive profits fashioned around an Australian model.

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