B2Gold starts packing up after N$25b in sales

Namibia’s biggest gold mine, B2Gold Namibia, which last week announced a phased closure process, has for the past nine years sold gold worth over N$25 billion.

The mine made a profit of N$5 billion between 2018 and 2021.
This sales revenue was made from over 33 tonnes of gold the company has unearthed at the mine between Otjiwarongo and Otavi, and shows the company has been profitable for a substantial period of time.

Data from publicly available documents also show that the company has invested heavily in the mine at no less than N$7,5 billion.

Headquartered in Toronto, Canada, the capital of many listed mining companies, B2Gold started operations in 2013, but the first commercial gold was produced in 2014.

The company last week announced it was starting a phased mine closure process of its Otjikoto mine which will affect the mine site and Windhoek office staff, due to a limited reserve.

The company further announced that the most recently approved life-of-mine plan (LoM) indicates a current mine life (including the processing of low-grade stockpiles) is approximately nine years (beginning 2023) only.

This would only change if a significant open-pit discovery or extension of underground reserves is discovered, the company said, but labour unions are unsettled about this.

Country manager John Roos said the open-pit end-of-life would likely be at the end of 2024, with open-pit mining output ramping down to 50% of production capacity in 2024.

“Accordingly, the last year of full open-pit mining production will be 2023. Processing and milling of low-grade stockpiles will continue until approximately 2031 (provided this activity is proven to be economically viable),” the company said.

‘MINERALS NOT INFINITE’

Reacting to the announcement, mining commissioner Isabella Chirchir told local daily The Villager that mining companies do not operate forever, as minerals are not infinite.

The company had a total of 871 permanent and 51 temporary employees by the end of 2021.

Labour unions and stakeholders in the Otjozondjupa region say the announced closure has shaken many, and an investigation around the transparency of mining companies needs to be launched.

CALLS FOR INVESTIGATION

Mineworkers Union of Namibia (MUN) acting president Philip Munenguni has called on the Ministry of Mines and Energy, and the Ministry of Labour, Industrial Relations and Employment Creation to investigate the mining industry’s labour practices, highlighting the need for greater transparency and accountability in the sector. He is accusing B2Gold of using a strategy that poses a threat to the entire Namibian workforce and the country’s economy.

Munenguni says this cannot be allowed to continue.
“I am hereby calling upon the [ministries] to immediately appoint a committee to investigate all these acts by the mining houses, and the possible violation of the Labour Act, as well as the tendency of outsourcing of mining operations to the Chinese and friends of mines’ management,” he says.

‘PLANS NOT DISCUSSED’

The Otjikoto mine, which was acquired by B2Gold in 2011, is expected to cease open-pit mining by the end of 2023, with processing and milling of low-grade stockpiles continuing until approximately 2031.
Munenguni says these plans have not been discussed with the unions or the regional leadership.

Otjozondjupa governor James Uerikua has confirmed that his office was not consulted on looming retrenchments at B2Gold.

He says he only learnt the news on social media.

“They have not sought any appointment or briefing with our office or the councillor’s office [of the Otjiwarongo constituency] or any government institution.

“Nothing formal was written,” he says.

Uerikua expresses concern over the economic and social implications the mine’s closure would have on the region.

Businessman Eddy Kgobetsi says the decision was also not made known to the business community at Otjiwarongo, where the majority of B2Gold employees reside. He says the decision would greatly impact the real estate sector at the town.

“The property market will go down. Tenants will be moving out. Even if you wish to sell your property, you will not get a fair price,” he says.

HOPE

The Otjozondjupa region remains hopeful that the situation would change once the northern graphite mine starts operating.

The mine is expected to employ over 500 people and has a lifespan estimated to be over 40 years.

“That in itself is something the residents of Otjiwarongo can look forward to, and align themselves to benefit from whatever this investment will bring,” he says.

‘NO SURPRISE’

Chamber of Mines chief executive officer Veston Malangu says B2Gold’s closure does not come as a surprise. He says the mine’s closure was planned.

“More mines are being developed, and more jobs will be created. Osino Gold will open a new mine in two years’ time,” he says.

Malangu says more news will be announced next week at the chamber’s annual general meeting, where the 2022 annual report will also be launched.