By Stanley Kambonde
In the mining world, there’s a huge difference between discovering resources and producing them.
While large international companies (‘majors’) have access to large amounts of capital and are capable of developing major mines on their own, they usually avoid the early stages of exploration and prefer acquiring de-risked exploration projects from small exploration companies (‘juniors’) with completed preliminary economic assessments and feasibility studies.
These assessments, conforming with internationally recognised reporting standards such as the JORC Code (Australian) or NI 43-101 (Canadian) are so costly, that juniors such as Osino Resources’ are reported to have spent N$ 1.5 billion on preparatory work since 2019 before its Twin Hills Gold project was acquired by Chinese mining major Shanjin (formerly Yintai Gold) for N$ 5 billion in 2024.
Due to Namibia’s under-exploration, juniors have begun evolving beyond the ‘idea phase’ of exploration and becoming more production-oriented to navigate the complexities of turning a discovery into a sustainable operation.
While exploration companies often rely on official data like NI 43-101 compliant reports, production-oriented companies utilize non-traditional data sources such as artisanal mining data, historical records, and local knowledge to accelerate project timelines and reduce uncertainties.
This has attracted production-oriented juniors or investors to enter into development agreements with Namibian small-scale miners who have been extracting valuable minerals (especially bulk commodities such as copper) for decades using the mining claim licensing regime.
While their operations may not produce formal compliant reports such as NI 43-101, these miners have a wealth of knowledge about where high-grade veins are located, how the area’s geology behaves, and even insights into the challenges posed by local conditions and communities.
Despite the keen interest by investors to utilize non-traditional data to reduce the overall time and capital required to build scalable projects in Namibia through mining claims, the country’s outdated ‘pro-EPL’ legal framework and exploration-oriented attitude have made it easier to get into heaven than to get a mining claim formerly registered.
The biased confinement of mining claims to “small-scale mining”, despite their potential to fit within a production-oriented model capable of uplifting livelihoods, means mining claims are usually downplayed as an alternative licensing regime capable of creating a thriving small to medium production-oriented sector.
For example, despite decades of exploration activities happening in the Kunene Region, the exploration-oriented approach has not developed a single copper-producing mine in the region since independence despite historical data positioning Kunene as a copper hotspot.
Although two copper producing projects (i.e. operated by Kunene Crush Stones CC and Kaokoland Mining Explorations) have been built through the consolidation of mining claims and had offtake agreements to supply copper concentrate to Dundee Tsumeb Smelters (now Sinomine Tsumeb Smelter), they have not been recognized as ‘mining operations’ due to their non-compliance with compliant reports such as NI 43-101 despite their contribution to exports, employment and infrastructural development.
Ironically, despite the Ministry of Mines and Energy using their data for statistical purposes, their contribution to the mining sector is downplayed.
The aim here is not to undermine the importance of exploration, as evident from success stories such as those of Osino Resources and Auryx Gold (acquired by B2 Gold in 2011).
Rather, it is to highlight that if beneficiation is to be achieved, a reform in policy and attitude is required to embrace mining claims as an alternative licensing regime for mineral resources to be tangibly mined and moved along the value chain.
Unfortunately, this cannot be achieved solely from being an exploration-oriented nation which has to date mostly produced recycled EPLs rather than operational mines. We need to realize that there is nothing small about small-scale mining.
*Stanley Kambonde is the Executive Director at Kambonde Mineral Resources (Pty) Ltd, a production-oriented copper outfit developing scalable copper projects in the Kunene Region. He can be reached at skambonde@gmail.com or stanley@kambonde.com
