Mines minister Tom Alweendo has signalled that he is planning to shut down Sperrgebiet Diamond Mine’s operations should the diamond mining company not prove that it can revive its actual mining operation at the mine situated at Elizabeth Bay, south of Lüderitz.
The Issue has learned that Alweendo gave the company until the end of July to prove that it has a comprehensive plan to revive the mine and start actual mining operations. Failure to do so will revoke the company’s mining license.
This development has, however, been cloaked in secrecy, with both the ministry and the company refusing to respond to questions about the request. Alweendo did not answer questions for two weeks, while mining commissioner Isabella Chirchir referred questions to Alweendo and the ministry’s executive director, Penda Iithindi.
SDM representative Grant Flanagan has yet to respond to detailed questions sent over a week ago.
The Issue understands that Alweendo’s move was motivated by the fact that the mining company was mired in several disputes, including a court dispute with shareholder Lewcor Mining.
Ministry officials briefed on the matter said the request resulted from the ministry concluding that SDM still needs to fulfil all its obligations and requirements in its mining license. A significant part of what irked the ministry is that mining at Elizabeth Bay has been suspended for an extended period. In contrast, the ministry wishes to see mining operations create jobs and boost the Lüderitz economy.
Despite efforts by mines minister Alweendo to kick-start mining operations, SDM finds itself accused of being an obstacle to significant renewable energy projects sanctioned by the central government.
SDM’s Elizabeth Bay mining license is on a vast piece of land in south Namibia that has been restricted for over 100 years. It is known as the Sperrgebiet.
The SDM’s mining license starts with land on Possession Island, just south of Elizabeth Bay and about 40 kilometres south of Lüderitz.
It goes north to Hottentot Bay, about 62 kilometres north of Lüderitz.
This means that even the land between Lüderitz airport and the town is part of this mining license, which prohibits the city from expanding further east. Despite the expected boom, SDM refuses to grant the town council access to the land for town expansion. This is simply because the said area still falls under a restricted area.
A dispute in Namibia over access to diamond-rich land around Luderitz is now threatening to derail significant energy projects, state and company officials said as the government steps up efforts to resolve the dispute.
Any protracted delays may scare off investors at a crucial time for Namibia, as it aims to accelerate its first oil production following significant offshore finds by TotalEnergies, Shell, and Galp.
At the heart of the discord are vast tracts of desert land surrounding Luderitz and Elizabeth Bay, 25 km south, forming part of a mining license held by Sperrgebiet Diamond Mining (SDM), which companies need for their projects.
“At the moment, the ministry and license holders are in talks to find the best solution to address the issue of land access,” a mines and energy ministry spokesperson said.
Officials said that besides a proposed 800-megawatt gas-to-power plant, Hyphen Energy’s $10 billion green hydrogen project and two wind farms are among those potentially affected as the year-long deadlock drags on.
Elizabeth Bay is where BW Energy plans to land a pipeline from its offshore Kudu gas field to supply a gas-to-power plant and liquefied natural gas facility.
BW Energy, which postponed a final investment decision on its Kudu project, told Reuters that getting land to build a power plant and a 40-kilometre onshore pipeline is challenging.
“We have been at an impasse now for a year to conclude how we will coordinate and cooperate once we are in operation. This is quite urgent,” Manfriedt Muundjua, a senior BW Energy official, told an energy conference in April.
The co-owners of SDM are embroiled in a Windhoek high court spat, complicating land negotiations, since the mine’s majority shareholder, Dubai-based GEM Group, was taken to court by its minority partner, Lewcor, over allegations of asset stripping.
“We are still negotiating with the mine operators, but it’s a time-consuming process, and we don’t have time,” Luderitz mayor Phillippus Balhao said.
Sources: The Issue & Reuters
