The Chamber of Mines of Namibia says it is not economically viable for most mines to use 100% renewable energy, and thus be carbon neutral, amid increased global calls for nations to do away with fossil fuels.
“The economic losses versus the environmental gains thus carefully need to be assessed when restricting the use of fossil fuels or eradicating them entirely. The global transition to a green economy should be gradual, rather than abrupt,” Chamber of Mines of Namibia CEO, Veston Malango told The Brief.
He said although it is important to minimise the carbon footprint of the country’s mining operations, it must be remembered that African countries generally have low carbon footprints, including Namibia.
“The Chamber believes that it is important to minimise the carbon footprint of mining operations. Mining operations around the globe, including members of the Chamber are increasingly pursuing new green technologies and investing into renewable energy sources to minimise their carbon dioxide emissions. This forms an important part of their reporting and governance structures which incorporate ESG standards and metrics. However, it must be remembered that African countries generally have low carbon footprints, and more specifically, Namibia is a carbon sink meaning that it absorbs more carbon dioxide than it emits.,” Malango said.
According The McKinsey report, it estimates that the annual cost of getting to net zero – when carbon dioxide emissions are completely reduced or offset – will be US$9.2 trillion, an extra US$3.5 trillion, every year from 2021 to 2050, will need to be put towards alternative energy sources and land use including agriculture to limit global warming to 1.5 degrees.
This comes as in November Mines and Energy minister Tom Alweendo said Namibia will not completely do away with oil and gas while pursuing its plans to become a global hub for green hydrogen, calling for a “pragmatic approach in the energy transition conversation.”
Malango, however, said the Chamber is supportive of government’s drive for the development of the country’s green hydrogen sector.
“There are also some exciting linkages that exist in the production of green hydrogen within the mining sector. The industry has started to invest in renewable energy, and there are opportunities for the mining sector to benefit from the establishment of IPPs to support a green hydrogen industry in the South, and vice versa,” he said.
The government is banking on green hydrogen to solve the country’s power deficit and attract billions in foreign direct investment (FDI) and hundreds of millions in annual revenues.
The Chamber CEO said the continued delays in the finalization of the New Equitable Economic Empowerment Framework and the Namibian Investment Promotion Act (NIPA) was negatively contributing to investor uncertainty in the sector.
“These are two vital pieces of legislation that will shape Namibia’s investment climate and have been pending for more than 5 years. This has a negative impact on future business decisions as it is not certain what the final pieces of legislation will entail, and whether they will be conducive for investment in Namibia generally and the mining sector,” Malango said.
On the outlook for the sector, Malango said the outlook for mining is extremely positive in a commodity price environment that remains favourable for investment the sector.
“The Chamber holds a strong view that the mining sector will continue to support Namibia’s economic recovery in 2022, and record another year of growth,” he said.
* Full Q&A to be published on Friday.
