Even though the negative global developments in 2018 affected the local mining sector, the sectoral outlook for growth remains strong for 2019, with earnings expected to grow by 1.1%, Indileni Nanghonga, Junior Analyst at Simonis Storm Securities said.
Simonis Storm highlighted seven key projects and new developments in the mining sector, affirming the positive outlook for the sector in general. Mining recorded growth of 7.8% during the third quarter of 2018.
However, the firm noted that pending full detail of the new equitable economic empowerment framework (NEEEF) bill and despite the exclusion of the 25% equity stake, policy uncertainty remains a threat to the mining sector.
“Another threat to the mining sector is fuel costs, utility accessibility and cost challenges that are also moving against the industry, however, the weaker Rand will support the mines. There have been high expectations for a recovery in commodity prices, which could result into a significant catalyst for economic growth if it materialises,” Nanghonga explained.
In their previous report titled ‘Namibian Economic outlook 2019: In the Eye of the Storm’, Simonis Storm noted that the proposed income tax amendments (especially around capping losses), make it increasingly difficult to operate in Namibia, which is an already high mining tax jurisdiction