Govt warned to treat plans to own free shares in mining with caution

The government has been warned to be cautious over its plans to own free shares in the mining industry.

Mining expert Steve Galloway, who has more than twenty years in the industry, on Wednesday said the government should not apply a one-size-fits-all in the proposed approach.

“When I was in the government, we had a consultant to examine how we are viewed as an investment destination in the mining industry and the results were that we are doing good,” he said.

“It is important to handle the plan for free carried shares in the mining industry with caution. If we are talking about precious metals like platinum, gold and copper, as well as precious stones like diamonds, it might perhaps work for a 50/50 share between government and investors,” Galloway said, adding that this must always be done on a case-by-case basis.

He said during president Pohamba’s era, the proposition was put on the table for the government to have a substantial stake in the uranium sector, but was later reserved after the investors in the industry expressed their concern over profitability issues.

The idea of free ownership of shares in the mining industry was posed to the industry by mines and energy minister Tom Alweendo at the recently held Chamber of Mines annual general meeting.

In response to the proposition, Chamber of Mines Namibia chief executive Veston Malango flagged the plan, saying it has the potential to upset investor sentiment.

Galloway said that if treated with a delicate balance, the idea has the potential to create a win-win situation for the state and the investors, but if held without due consideration, it might result in catastrophic results.

Yesterday, the Namibia Local Business Association vice president, Peter Amadhila, weighed in on the issue, saying they want the government to own 50% of all natural Namibian resources in future.

He said this would allow Namibians to benefit from the country’s resources.