The Bank of Namibia (BoN) says the metal ores sub-sector is projected to grow by 26.2% in 2024, driven by higher-grade gold ore extraction and rising global gold prices.
According to the Bank’s December 2024 Economic Outlook, growth in the sector is expected to slow to 5.9% in 2025.
“The surge in gold prices reflects heightened geopolitical risks, which have increased central banks’ demand for gold as a safe-haven asset. In relative terms, the August 2024 Economic Outlook anticipated contractions of 3.5% and 0.6% in 2024 and 2025, respectively,” said the BoN.
The other mining and quarrying subsectors are expected to grow by 9.2% and 4.6% in 2024 and 2025, respectively, a significant reduction from the growth of 37.2% registered in 2023.
“The slowdown during 2024 is primarily due to base effects from intensive oil exploration and drilling activities in previous years. The latest projection for 2024 remains unchanged compared to the projection published in the August 2024 Economic Outlook,” the report noted.
Similarly, the uranium mining sector is anticipated to experience slower growth in 2024, primarily due to the impact of ongoing strip mining activities on production volumes.
“This projected slowdown is reflected in the anticipated growth rate of 3.6% for 2024 compared to 24.5% in 2023. The moderation is primarily attributed to the expansion of mining pits during the first half of the year at certain mines, which are expected to impact production volumes in the near term,” said the Bank.
However, a resurgence in growth is expected in 2025, with a projected growth rate of 5.2%.
Moreover, diamond output is expected to decline by 8.2% in real terms during 2024, reflecting subdued global demand for diamonds, exacerbated by competition from lab-grown diamonds.
“This follows a robust growth of 10.9% in 2023, supported by increased volumes as the new diamond vessel (Benguela Gem) was fully deployed in that year. While the sector is expected to recover slightly in 2025, growing by 1.8 %, the outlook remains uncertain,” noted the central bank.
With the change in leadership of the United States, the Russia- Ukraine war and sanctions against Russia are likely to be eased or ended, and that would normalise the global diamond markets, among other economic sectors, added the BoN.
This comes as overall, real GDP growth is expected to decelerate in 2024 and rebound in 2025.
“The slowdown reflects subdued global demand, which is impacting the mining sector, especially diamond and zinc production. Adverse drought conditions further add to economic challenges, particularly affecting the agriculture and water sectors,” said the BoN.
