Epangelo seeks more opportunities

By By Michael Tambo
August 2011
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SHORTLY before Namibia’s independence, the United Nations Institute for Namibia (under the auspices of the United Nations General Assembly Resolution 37/233/A-E) conducted a comprehensive study which envisaged that Namibia would need several public enterprises in order to effect major socio-economic restructuring of the country.

Consequently, Government was tasked with the responsibility of rational exploitation and use of the mineral resources, the formulation of policies and administrative rules on acquiring mining concessions and the broad conditions under which domestic and foreign financial and technical resources could be acquired.

The study also recommended that a mining parastatal should be established to assist the State in sectoral planning, coordination, supervision and overall implementation of the mining policy in relation to the public enterprise, joint ventures, marketing, procurement and training.

This was to be the umbrella organization of the affiliates within which existing and new companies should be integrated to carry out activities which included the following:

”State participation in mining and mineral resource development; preparation of feasibility studies and promotion of projects; coordination of mineral resources and industrial development for the benefit of other ministries responsible for the manufacturing and energy industries; advising the relevant ministries and financing of mineral resource development; initiating and reviewing corporate plans and annual budgets for the public enterprise and joint venture companies and monitoring their performance on a regular basis; establishing and carrying out a manpower and training coordination programme for the entire mining sector; coordinating job descriptions for all group companies; coordinating and reviewing procurement and marketing of all mining companies with a view of setting up a public sector marketing enterprise and ensuring that all policies of the Government, regarding mining and mineral development, within the context of the development of the national economy as a whole are implemented.”

Although it was expected that the new parastatal would be established immediately after independence, this did not take place simply because the existing mineral policy placed emphasis on the private sector although the private sector did not meet what was expected and only in 2008 was Epangelo Mining Company established.

The Managing Director of Epangelo Mining Company, Eliphas Hawala said that the establishment of the parastatal was delayed by the existing mineral policy which placed emphasis to the private sector.

“The existing mineral policy placed emphasis on the private sector but the private sector did not meet what was expected. One of the reasons for the private sector’s poor performance is due to speculation on the stock exchange, without any hole being dug on the ground. If there were sufficient holes on the ground, providing income to the state as well as employment, there would be no need to create state mining entities,” says Hawala.

But its birth came during the global economic crisis, the period when diamond mining was experiencing a decline and the price of the precious gem took a hard knock during this period. During the same period, Namibia showed renewed interest in uranium mining (due to the discovery of the new uranium deposits in the Erongo region). The slump in the diamonds market was a huge setback to Namibia whose economy has depended on diamonds for years.

In this regard, Epangelo Mining Company places more emphasis on strategic minerals such as diamonds and uranium but its mandate stretches beyond the confines of strategic minerals and involves interests in geophysical exploration of the base metals, mining investment as well as beneficiation of mineral products.

Hawala says most of the people who were given licenses for mining did not flourish in the industry because of lack of adequate start-up capital.

“As Epangelo Mining Company, we have a mandate to go out for minerals. We discover what is on the ground and invite potential investors to invest.”

The company operates on a tripod, which are exploration, extraction and beneficiation.
Under exploration, Hawala says, there are two types of projects, “The first one is to have joint ventures with existing mining companies whereby they negotiate for a stake in existing projects. The second one is to go out and discover new projects with strategic partners.”

Hawala also says there is a new policy still awaiting approval from the responsible ministry, which seeks to give Epangelo exclusive rights to issue mining licenses for all strategic minerals (gold, diamonds, uranium, copper, and coal and rare earth metals).

Under this new policy, investors who seek to engage into mining operations will have to go through Epangelo Mining Company and apply for operating licenses but this proposed legislation does not affect companies that are already operational.

“Unlike other parastatals, our operation is different in the sense that we have to go out to look for a stake so that Namibia gets a share in the mining sector. Where these companies do not exist we have to go out and look for stake holders who want to invest in the sector.

“We are in the process of providing more focus to the Memorandum of Understanding (MoU) with AREVA, in order to commence joint exploration activities. The details of that MoU have not yet been finalized and we have also signed an MoU with ARMZ, a Russian uranium company,” says Hawala.

Commenting on the company’s future challenges Hawala says, “We concentrate on opportunities and do not dwell much on the challenges. We see a lot of opportunities in the uranium sector as well as in offshore diamond mining, particularly in areas that have been lying dormant for years while we need to create employment opportunities.

“We also see opportunities in the copper sector, were we intent to put a foothold in the near future. We like it when our competitors underestimate us by focusing on potential challenges that we might face. That only makes us work harder as they will not know what will hit them as we unfold our asset acquisition strategy.”

Hawala confidently says that Namibians will benefit from the presence of the mining company in terms of provision of direct employment opportunities and technical sub-contracting.

“There are many ways that Namibians will benefit from the presence of Epangelo, including direct employment opportunities and technical sub-contracting, joint venture opportunities as well as the increased focus on mining by other players. There has been more serious focus on mining since Epangelo’s creation. As others realise that we are serious and that there has been a paradigm shift, other players in the mining sector are also beginning, though grudgingly, to put tangible results on the ground.”

Hawala concludes by saying, “We are still negotiating with private companies to acquire equity in existing licenses.” PF