Because Debmarine Namibia’s new mining vessel is expected to start production in the second quarter of 2022, diamond mining is expected to grow strongly in 2022 and 2023.
Debmarine Namibia’s N$7 billion diamond recovery vessel, the Additional Mining Vessel (AMV3), will retrieve diamonds from the seabed off Namibia’s coast using sub-sea crawling extraction techniques.
The Debmarine Namibia fleet’s new flagship, the AMV3, is the world’s largest diamond recovery vessel and is expected to operate for at least 30 years.
“The diamond mining sector is estimated to have grown by 2.3% in 2021 and is further projected to expand by 26.2% and 16.5% in 2022 and 2023, respectively,” stated Bank of Namibia in its February economic outlook.
The 2021 growth rate has been revised upwards from the 1.2% published in the December 2021 economic outlook update. According to the central bank, the adjustment was based on actual volumes produced, which turned out higher than earlier estimates.
From 2022 onwards, production from offshore mining is expected to increase substantially from the new mining vessel.
Also, uranium mining is projected to expand during the forecast period despite risks from low prices and water supply issues.
“The uranium mining sector is expected to grow by 3.9% and 6.6% in 2022 and 2023, respectively. The 3.9% growth projected for 2022 is moderate from 6% in 2021. The growth estimate for 2021 has been revised down from 7.4% projected during December 2021, based on actual volumes produced,” explained BoN.
The report further stated that impending risks in the medium-term from low prices for uranium and water supply challenges remain. In the short term, however, these risks appear to have eased somewhat, as the spot price for uranium increased to over US$44 per pound during January 2022.
In 2021, it said lost production due to water supply disruptions was less pronounced than the year 2020 and mines are building onsite water storage facilities to manage future water crises.
Overall, BoN said primary industries are projected to grow by 9.6% and 8.3% in 2022 and 2023, respectively, which is a significant improvement from a 0.9% growth in 2021.
The projected improvement, according to the central bank, is mainly expected to come from the mining industry, with diamond mining anticipated to expand by 26.2% in 2022 and by 16.5% in 2023. The agriculture, forestry and fishing sector is also expected to record positive growth in 2022. Primary industries were projected to grow by 0.3% and 7.1% in 2021 and 2022, respectively, during the December 2021 economic outlook update