By Theo Klein
Output growth in the local mining sector has played a key role in driving economic growth rates in the last couple of years.
However, recent global political developments have clouded the commodity price outlook for several of Namibia’s main commodity export products. While Namibia has minimal trade linkages with the US (less than 4% of total exports are destined for the US) and typically exports commodities that are exempt from Trump’s import tariffs, adverse economic effects will be channelled indirectly to Namibia via weaker global industrial activity that will reduce demand for Namibia’s commodity exports.
In addition, negative commodity price prospects are expected to weigh on export earnings and drag real GDP growth rates lower this year. Hence, risks to domestic mining production have arisen on both the price and quantity dimensions.
Bearish sentiment on base metals in general
We have cut our base metal price forecasts since the “Liberation Day” tariffs were announced as prices corrected sharply. But the delay in US reciprocal tariffs has since
seen prices recover somewhat as the worst-case scenario seems to be avoided for now, but risks are tilted to the downside.
This was reflected in China’s and the US’s manufacturing PMIs contracting in April as the tariff impact is already weighing on metal demand. However, the forecasts were prior to the recent positive trade talks between the US and China where they agreed to significantly lower the tariff rate. But the talks, while positive, are not a game changer, and we still expect weak demand growth ahead.
Significant uncertainty remains, and our forecasts are conditional on 10% US import tariffs being maintained on all countries and those for China at over 100%. This will create a demand shock for the global economy. Base metals were mostly excluded from the US 10% baseline tariffs due to their high import dependency and being critical to Trump’s plans to revive US industry. But the earlier 25% tariffs on aluminium imports remain and weak industrial activity will weigh on base metal prices.
Investigations into copper are also underway and the red metal will likely be hit next by section 232 tariffs later this year. The US market is in surplus as traders have shipped supply in anticipation of copper tariffs. This has seen inventories outside of the US fall sharply, which has artificially tightened markets and driven prices higher.
However, weak industrial activity and rising global copper supply is expected to weigh on price growth going forward. While capacity additions in China and the DRC drove
copper production growth last year, further capacity ramp-ups in the DRC, Peru,
Mongolia and a new mine in Russia will likely support production this year. Production in 2026 could be supported by increases in China and improvements in Zambia, Chile,
and Indonesia. We have lowered our 2025 LME copper price forecast to average US$9,197 per ton.
Tin prices might average US$31,827 per ton in 2025. Supply has been significantly disrupted but will start to improve and is why we have lowered our price forecast
slightly. Zinc prices will average US$2,656 per ton this year. Market tightness is easing, and prices will fall as mining and refining supply recovers.
Gold prices softening as turbulence abates
Gold prices have risen dramatically in 2025, but we are beginning to see pullback from record highs. Although elevated Treasury yields and a strong US dollar initially weighed on gold prices, rising safe-haven demand — spurred by shifting US trade policy — and a weakening dollar toward the end of the quarter helped weaken high price levels.
Looking ahead to the medium term, our outlook remains bullish. With considerable scope to raise their gold allocations, central banks — particularly in emerging markets
— present a strong source of potential demand growth which in turn is expected to remain a key support for gold prices this year. These central banks are actively diversifying their reserves away from the US dollar, aiming to reduce exposure to current sanctions and safeguard against potential shifts in US dollar policy.
China illustrates this dynamic well: although its absolute gold holdings are large, gold still comprises a relatively small share of its total reserves (less than 5%). Even a moderate increase in its official holdings could exert meaningful upward pressure on prices. Ongoing purchases suggest that China remains comfortable adding to its reserves, despite elevated market levels. We forecast gold to average $3,000 per troy ounce in 2025.
Trump is good for one thing: uranium prices
International uranium prices have dropped by more than 30% since their peak in 2023 as institutional investors retreated given geopolitical instability concerns. President Trump signed executive orders aimed at boosting uranium production, directing the nation’s regulatory commission to cut down on regulations and fast track new licenses
for reactors and power plants. Uranium prices could avoid tariff related disruptions and rise as it experiences strong demand, but tight supply over the short term.
Diamonds are not forever
Exports of rough and polished diamonds dropped sharply (-32% and -24% respectively) due to the dismal global demand for natural diamonds. However, there was a modest recovery in diamond output in Q4 2024. Diamond prices also held steady in Q1 2025,
which suggests the market is close to stabilising after efforts last year to cut production and reduce stockpiles.
That said, a strong rebound in diamond output in Namibia is unlikely as the US-Chinese trade spat will hit consumer spending in the US and China – the top two diamond-consuming countries.
The diamond price outlook remains bleak, with a meaningful recovery in natural
diamond prices – if there will be one – still far away. We maintain our view that the rise of lab-grown diamonds has caused a permanent structural change in the global diamond market.
The diamond industry has still not recovered from sales losses during the Covid-19 pandemic, and synthetic diamonds, along with Mr Trump’s tariff ambitions, are pushing the recovery further down the road. If direct tariffs on the diamond-dependent nations in Southern Africa weren’t enough, the US has also imposed import tariffs on key
diamond polishing nations, such as India.
Namibia’s export growth
The external environment will prove challenging this year due to US trade protectionist measures, which will disrupt global trade flow and curb demand for Namibia’s commodity exports. This will create a demand shock for the global economy as well, especially for countries with strong trade linkages to the US.
Global supply chains will also be disrupted, and the increased uncertainty will weigh on investment and consumer spending. We have cut our global industrial production and trade forecasts and now expect weaker metal and diamond demand.
Gold prices remain favourable to local mining companies, while prices of most base metals which Namibia exports are expected to weigh on export earnings this year.
Although growth prospects for non-mining activities remain decent, the gloomy
diamond market and weak base metal outlook constrain the short-term economic growth trajectory in Namibia.
As a result, we anticipate economic growth to ease to 3.0% in 2025 from 3.7% in 2024.
*Theo Klein is an Economist at Oxford Economics Africa
