Small Scale Mining in Namibia

A general overview of small-scale mining

Namibia is endowed with large deposits of mineral wealth and is currently a noticeable global
player with regards to the production of minerals (though there is still needed to improve on
the production of mineral-related products).

Namibia thus is a major producer of a wide range of minerals, including precious metals, base
metals, precious and semi-precious stones, and industrial minerals. Historically, this production
can be attributed to large - to medium - scale mines controlled mostly by multi-national
corporations.

Mining in Namibia (and the rest of Africa) has contributed to the development of an extensive
and efficient physical infrastructure and to a limited extent, the establishment of secondary
industries. The historical impact of mining on the development of Namibia is apparent from
the correlation of occurrence of high value mineral deposits and levels of development and
population densities.

Point to note: Past policies and discriminatory laws have resulted in little development of the
small-scale mining subsector and hindered the participation of certain sections of the country's
population.

What is the current status of small-scale mining and what is small scale mining?

Small-scale mining
The definition of small-scale mining (particularly when considering artisanal mining, which is
primitive and informal) has been debated at length at different fora. The most commonly used
parameters for classification of the scale of a mine are gross annual turnover and number of
employees.

Business has been classified into micro, very small, small and medium according to criteria
such as number of employees, total annual turnover and total assets.

However, for mining this classification has some shortcomings. For Example, on the one hand
companies may be employing as few as three highly qualified professionals as consultants and
have a gross annual turnover of over N$ 12, 542, 732.80 (approximately US$ 753, 770. On the
other hand, cooperative style mining operations with more than fifty (50) people working a
single deposit, using elementary methods, could have an annual turnover of less than N$ 150
000 (US$ 9,014).

Table 1: Classification of mining and quarrying operations

Category Micro (Class 1) Very small Small (Class 3) Medium (Junior

(Class 2) Class 4)

No. of employees Less than 5 Less than 20 Less than 50 Less than 200

Assets (property Less than N$ 100 Less than N$ 1.8 N$ 4.5 million N$ 18 million
excluded) 000 million

Annual revenue N$ 150 000 N$ 3 million N$ 7.5 million N$ 30 million

Description of Commonly Locally based, Provincially Namibia based,

operation informal (i.e. not producers based contractors,
registered for production and
purposes of exploration
mining, taxation, companies.
or labour
legislation.
Commonly part-
time.

Level of technology Artisanal, Simple Low medium High levels of

and mechanisation rudimentary, technology, technology and technology and
non-mechanized simple levels of mechanisation
equipment mechanised mechanisation
equipment

Areas of activity
Activities are concentrated in the known minerals found in the country such as gold, diamonds,
uranium etc.
Small artisanal and small-scale miners informally re-open old mine shafts to acces whatever
ore has been left by the big mining companies. The reworking of dumps left behind by the
same big mining companies is also quite common.

Table 2: Employee distribution in each mine size by mineral commodity

Mineral commodity Mine size (categorized by number of employees)

1-4 5-19 20-49 50-199 200+

Precious metals 0% 0% 0% 0.1% 99.9%

Coal 0% 0.02% 0.1% 0.5% 99.38%

Base & other metals 0.02% 0.1% 0.3% 3.5% 96.08%

Precious stones 0.1% 1.4% 1.6% 6.0% 90.9%

Hard rock quarrying 0.1% 3.3% 9.9% 20.5% 66.2%

Soft rock quarrying 3.2% 16.1% 24.6% 29.0% 27.1%

Industrial minerals 0.1% 1.7% 6.6% 37.6% 54.0%

The degree of participation of the small-scale mining subsector varies by commodity.

This can be seen in the percentage employment of the subsector by commodity (see Table 2
above). The level of participation is determined by: availability of deposits; ease of mining,
processing and extraction of the commodity; and access to markets.

Some activities, such as sand and clay mining for brick making, are driven by local
demand. These deposits fall within the soft-rock quarrying commodity group and are readily
available to the small-scale miners. The minimum and uncomplicated processing requirements
also make them attractive to this subsector, as reflected by the higher percentage of employees.

Regulatory environment
There are a number of pieces of legislation that impact on this group of miners and they are the
same ones to which the medium and large mining companies are subject. These cover the
environment; labour; mineral rights; exploration and mining permitting; and skills
development.
• The mining policy of most countries, which is enforced by laws and legislative
regulations, is usually in a language too complex for the artisanal and small-scale
miners to comprehend. Most of these miners are not even aware of the national laws
and regulations in force that affect the mining sector and inadvertently violate them. In
Namibia the following areas are regulated:

• Mineral rights - The issue of mineral rights in Namibia is under review. Minerals
rights are like property rights and are protected by the constitution. Previously, Namibia
had a dual system of private and public ownership, but the new Mineral and Petroleum
Bill will make the State the sole owner of mineral rights. The issues of royalties,
prospecting and mining rights also fall under this bill.

• Health and safety - Health and safety aspects are governed by the Minerals Act 33 and
the Labour Act. Most of its regulations do not apply to small-scale miners.

• Environment management - In Namibia the environmental legislation is governed by

the Environmental Management Act, the Minerals Act, environmental impact
assessment (EIA) guidelines, and the Environmental Act. With the new legislation,
however, all small-scale mining operations applying for prospecting or mining licenses
are forced to pay a deposit for environmental rehabilitation.

• Compliance is very low, as non-registration or illegal mining frequently occurs.

• Similarly, most small-scale miners have neither the resources nor the capacity to carry
out an EIA.

• In response to these problems, the Ministry of Mines and Energy has established
a Small-Scale Division (SSM) which comprises of Mineral
Resources/Information and Analytical & Environmental Services subdivisions
they work hand in hand to provide:

• Providing Geotechnical Support Services to Small Scale Miners (SSMs), especially

Laboratory sample analysis for free to small scale miners with a valid mineral licence.

• Facilitating the formation of Small-Scale Mining legal groups/bodies (associations or

co-operatives) so that any form of support from government, non-government
organisation and development partners, financial institutions could be channeled
through legal and recognised entities.
 • Facilitating the formation of regional SSM marketing centres to display and market the
mineral products of SSM

• Providing training to small scale miners on Legal procedures of acquiring mineral

rights/ Claims

• Promoting potential for small scale mining at exhibitions and conferences

• Encouraging small scale miners to participate in international trade fairs in order to

market their products

• Monitoring and evaluating potential as well as existing SSM projects through site visits
and cooperation with development partners.

• Assisting Small Scale Miners with pegging of Claims

• Settling of land/farm access disputes

• has developed simplified EIA requirements, which are applied to artisanal miners –
defined as non-mechanized operations.

• Labour relations - The key pieces of legislation governing labour relations in mining
are the Labour Relations Act. In each case, only small portions of the law are applicable
to small- and artisanal mining.

• Skills development - sets out the framework for developing a coordinated approach to
skills development in the country. The act was promulgated in order to improve
productivity in the workplace, promote self-employment, and encourage employers to
use the workplace as an active learning environment and to provide opportunities for
new entrants to the labour market to gain work experience. Its regulatory impact on the
artisanal and small-scale miners is also limited.

Constraints to effective participation of artisanal and small-scale miners in the

industry
The effective participation of artisanal and small-scale miners in the sector is hampered by their
lack of technical, business and management skills, and by their limited access to mineral
deposits, capital and markets. Artisanal/small-scale miners are involved in almost all mineral
commodities found in Namibia.

Limited access to mineral rights and deposits

The availability of deposits and the daunting task of acquiring mineral rights limit the activities
of artisanal and small-scale miners. It is often difficult to find out where mineral rights are
located. Most artisanal and small-scale mining activities take place around small deposits,
unsuitable for exploitation by the large mining companies. This is particularly true of deposits
of precious metals and precious stones.

Artisanal and small-scale miners are also often allowed to reprocess tailings dumps left behind
by large mining companies. The lack of easy access to mineral deposits could be part of the
underlying reasons for the existence of some of the informal artisanal mining activities.

Lack of access to appropriate technology and skills

Comparisons between different scales of production show that, although the basic industrial
processes are the same, the differences in scale often necessitate application of different
technologies. With increasing scale, there is a trend towards more sophisticated technologies.
For the established small-scale miner, access to technology is not as much of an obstacle as it
is for miners lower on the scale (i.e., artisanal). However, common throughout this subsector
is the preference for generic technologies that are no longer protected by patents. Patented
technologies tend to be too expensive for small-scale operators.
Just as important as access to technology is the ability to use these technologies. Within the
upper end of the small-scale mining sector, appropriately qualified skills may be hired.
However, at the lower end this is often not feasible.

The negative impacts resulting from lack of skills and limited access to technology are evident
in the observed operations that are rudimentary, unsafe, environmentally unfriendly and using
inefficient processes. A most horrific example of the negative impacts is misuse of mercury
during gold extraction; the mercury is handled unsafely, posing a health hazard and there is no
real concern for the environmental impact. Another horrific common occurrence in the small-
scale mining subsector is unsafe coal and clay excavations, where the low competence of the
rock makes overhangs liable to collapse, resulting in injuries and sometimes fatalities.

In some SADC countries, the small-scale miners have been supported by free or subsidized
technical and management services training, and by plant and equipment hire administered by
governments.
Non-governmental organizations have also been known to be instrumental in setting up central
processing facilities for use by small-scale miners, e.g., the Shamva Mining Centre in
Zimbabwe established by the Intermediary Technology Development Group. This provides an
alternative to the somewhat unsatisfactorily custom milling and processing done by the more
established small-scale mining companies for the producers at the lower end of the scale
(mostly artisanal miners).

Limited access to capital

Smaller companies have different financing requirements than do larger companies, and they
need support from the investment community. Lending to this sector is perceived to be risky;
consequently, the domestic banks generally restrict lending to only short-term investments, if
they lend at all. This greatly hampers the development of the subsector.

The risk profile of a potential project is at its peak in the early stages and decreases through the
development phases. Most companies never find an ore body, but a few are extremely
successful. The risks at the early stages, that is, before a pre-feasibility study is completed, are
normally beyond what typical commercial banks are willing to expose themselves to.

Limited access to markets

Low capitalization limits the amount of funds that small-scale miners can allocate to proper
market research. At the artisanal level, the process of finding markets is unsystematic and
haphazard. In some countries, where small-scale mining activities have been supported through
government initiatives, the establishment by government of a central buying facility such as in
Zimbabwe - assists the lower end of the scale. However, to more established mining companies,
this set-up could - if legislated-become a hindrance to obtaining competitive prices. Some
countries, for example Bolivia and Peru, have acted to close their state-controlled mining
banks. Others have focused on precious metals and stones, like Vietnam, which has contracted
private trading companies to buy rubies from small-scale miners with an agreement to provide
training in cutting and polishing to the miners.
Central buying facilities exist in Namibia, but some assistance with accessing foreign markets
is needed.

Most artisanal and small-scale miners are usually unaware of the existence of such services
and may also lack the capacity to individually attain the critical mass required by the market.

Changing dynamics in small-scale mining

Opening up of the industry

Policymakers in Namibia recognize the need to promote the development of an efficient small-
scale mining subsector. Legislation in Namibia is being adapted to play an important role in
the support of artisanal and small-scale mining and will play a major role in its sustainability.

Government and investors (as part of their CSR) need to encourage and facilitate the
sustainable development of small-scale mining in order to ensure the optimal exploitation of
small mineral deposits and to enable this sector to make a positive contribution to the national,
provincial and local economy.

A central database of all known state-owned deposits in Namibia exists, thus making it easier
to find out where mineral rights are located. There is also a need to simplify the process of
applying for mineral rights.

The change in attitudes has resulted in some encouraging developments, such as joint ventures
between small and large mining companies. This allows access for small-scale operations to
mineral deposits and sometimes guarantees markets. However, the latter has to be weighed
against the same negative impacts experienced with legislated central buying systems.

An example of joint ventures in the SADC region is that of the Northern Cape in South Africa,
where the Small Scale Miners Forum has gone into a joint venture with Samancor Chrome
Mining Company, which has leased them its mineral rights to some manganese deposits.

Some large mining companies have allowed small-scale miners to rework their tailings or
marginal areas with the understanding that all the production would be sold through the large
companies. At the O’Kiep Mine, a group of small-scale miners have been allowed to upgrade
oxide copper dumps by handpicking and selling the concentrate to the mine.
In Namibia, before selling its stake to a Chinese Company, Rossing Uranium had started
training artisanal mining on how to maximize their operations.

Support and promotion of the small-scale mining sector

The project on Mining, Minerals and Sustainable Development (MMSD)” in Southern Africa
made recommendations for the support of the small-scale mining subsector by providing
appropriate training and capacity-building programmes through partnerships among
government, educational institutions, companies and donors.

It also recommended the creation of a regional forum to promote the development of

a harmonized regional legal framework. In many countries where small-scale mining activities
are present, the necessary services are made more accessible through government programmes;
these may sometimes include subsidized rates.

In Namibia there is a small number of companies and individuals that offer services to the
small-scale mining sector at normal market rates. Some of these service providers are
government science councils. Low capitalization of small-scale mining projects makes
accessibility to overseas service providers extremely difficult.

For the lower end of the small-scale miners, the Ministry of Mines and Energy’s Small-Scale
Division (SSD) has been created to offer a more accessible service in a one-stop-shop
configuration for small scale miners. The main motivation behind the establishment of the SSD
was to correct the practices of artisanal mining especially unacceptable safety standards and
environmentally unfriendly methods - by assisting this type of operation to advance to the
higher level of small-scale mining and ensure sustainability. The services of the SSD are also
extended to:

• First-time entrepreneurs with limited experience and expertise and who are trying to
enter the mining sector by starting green field operations;

• Formal small- or medium-sized operations that are operating below the potential of the
deposit being exploited, due to lack of expertise and expansion capital. The SSD
includes specialists in geological prospecting, mining, minerals processing, diamond
recovery, capacity building and manufacturing. The SSD also assists in ascertaining the
 • The viability of the project;

• The composition of the promoting agent;

• Black economic empowerment criteria.

Skills development
The skills requirements for artisanal and small-scale miners are covered by the following
broad areas:

• Geology;

• Mining;

• Mineral processing;

• Environment;

• Health and safety;

• Operational management;

• Marketing;

• Financial management;

• Human resources management; and

• Business planning.

Growth of the small-scale mining sector

The small-scale mining subsector has great potential for growth. This potential can be realized
through coordinated activities, such as those of the SSD, and as part of the integrated rural
development plans for local government.

The underlying ethos in all the initiatives is the drive towards sustainable development through
beneficiation, downstream processing and adding value. SSD’s intervention strategies to
support artisanal and small-scale miners include:
• Beneficiation and value-addition development programmes for poverty alleviation
focused on the rural development nodes of Namibia;

• Development/application of appropriate and safer technologies;

• Facilitation of technology transfer through training; and

• Provision of entrepreneurial skills and access to technology, mineral deposits and

financial resources.