Mining the rock of growth
Driving economy in 2024
The metal ores sub-sector is poised for a robust recovery in 2023, with projections indicating an expansion of 24.1%, followed by a moderated growth of 7.5% in 2024.
Mining and quarrying are expected to drive economic growth in Namibia next year, expanding by an anticipated 6.9%, according to the Bank of Namibia (BoN).The BoN recently released its Economic Outlook Update, projecting a deceleration in the country's gross domestic product (GDP) growth for 2023 and 2024 to 3.9% and 3.4%, respectively.
The slowdown is primarily attributed to weakened global demand and an anticipated contraction in the agriculture sector.
According to the report, the domestic economy is expected to grow by 3.9% in 2023, with a subsequent moderation to 3.4% in 2024. This reflects a notable slowdown from the 7.6% recorded in 2022, but has been revised upwards from the initial August 2023 projection of 3.3%.
The slowdown in 2023 is attributed to diminished demand in both global and domestic economies, influenced by elevated inflation rates and soaring interest rates that adversely affect consumer spending.
Additionally, the high base effects from the mining industry, especially diamond mining and other mining activities, contribute to the deceleration.
Primary sector
Projections indicate a dip in the growth of primary industries in 2023, mainly due to reduced expansion in diamond mining and other mining and quarrying activities.
Estimated growth rates stand at 8.6% and 4.7% for 2023 and 2024, respectively, representing a moderation from the elevated base of 30% recorded in 2022.
Diamonds
The diamond mining industry is anticipating a significant decrease in growth in 2023, primarily influenced by diminished production levels stemming from declining international prices.
Projections indicate a growth rate of 5.5% and 9.7% in 2023 and 2024, respectively, marking a substantial deterioration from the robust 45.1% growth recorded in 2022.
Uranium
Projections suggest an expansion in the uranium mining sector for 2023, followed by a moderation in growth for 2024.
Anticipated to surge by 14.8% in 2023, the sector is poised for subsequent moderation with a growth rate of 3% in 2024, reflecting the industry's recovery from water supply interruptions.
Metal ores
The metal ores sub-sector is poised for a robust recovery in 2023, with projections indicating an expansion of 24.1%, followed by a moderated growth of 7.5% in 2024.
The surge in gold production is credited to the extraction of higher-grade ore across all operational mines.
Quarrying
Projections indicate a moderation in growth for other mining and quarrying activities, encompassing oil exploration, in the years 2023 and 2024.
The sub-sector is expected to witness growth rates of 35.3% and 5% in 2023 and 2024, respectively, marking a substantial reduction from the remarkable 144.2% growth recorded in 2022.
The slowdown in 2023 is attributed to projections indicating a more restrained increase in exploratory efforts compared to previous years.