By Vincent Shimutwikeni and Zach Kauraisa
Namibia’s mining sector has increasingly occupied the centre of national economic conversation.
New mineral discoveries, the global demand for critical minerals, and a pipeline of major projects have placed the sector firmly in the spotlight as a driver of future growth.
Against this backdrop, attention has also turned to the potential role of domestic institutional capital, particularly pension funds in supporting the next phase of the country’s resource development.
Yet for pension funds, the question cannot simply be whether mining is an attractive sector or whether the national conversation suggests momentum.
Pension funds are custodians of workers’ long-term savings, and trustees carry a fiduciary responsibility to ensure that any allocation of capital balances developmental aspirations with the fundamental obligation to safeguard members’ retirement outcomes.
The discussion, therefore, is not whether pension funds should follow popular trends, but rather under what structures, safeguards and investment frameworks such participation becomes prudent.
In 2025, South Africa’s Public Investment Corporation (PIC) launched a R1.35 billion Early-Stage Mining Fund targeting post-scoping-study to bankable-feasibility-study projects in critical minerals.
Individual investments will range from R100 to R400 million, deployed through private equity and venture capital structures. Although pension fund investment into the natural resources sector is not new, it has traditionally been reserved for de-risked and later-stage projects.
The willingness to absorb early-stage project risk signals a growing institutional confidence in the sector.
In Namibia, by Q3 of 2025, institutional investors had committed N$4 billion across unlisted investment managers, of which 55.1% was deployed as unlisted debt and 34.3% as unlisted equity, with the remainder allocated to unlisted property. Although some unlisted capital flows into mining recorded at 12.1% in 2024, this exposure is almost entirely debt and none of it is earmarked specifically for the sector. A gap therefore remains in private equity participation in Namibia’s mining industry.
The constraint is not a lack of capital or regulatory limitation. Of the N$262.8 billion in assets held by Namibia’s pension industry in 2024, pension funds committed 2% to unlisted investments, according to the NAMFISA Annual Report (2025).
This allocation exceeds the regulatory minimum of 1.75% but sits well below the 3.5% regulatory ceiling under the Pension Funds Act Regulations. As of Q3 2025, only 1.3% of the 2% allocation was drawn and invested.
This suggests a potential allocation gap of N$1.4 billion to N$6.7 billion that could be deployed into unlisted assets, including mining investments.
The opportunity is significant. Namibia’s mining sector is the largest contributor to GDP and accounted for approximately 46% of export earnings, while contributing N$5.6 billion in taxes in 2024. Policy direction is also clear.
National development frameworks such as NDP6 and Vision 2030 aim to increase processed mineral exports from 46.6% to 57% by 2030, while the industry has identified roughly N$30 billion in potential mining projects over the same period.
The 2023 ban on exporting unprocessed lithium, cobalt, manganese, graphite and rare earth minerals further signals the government’s commitment to domestic value addition.
International capital is already positioning itself accordingly. Appian Capital Advisory, which manages the Rosh Pinah zinc mine in Namibia, closed its third mining fund at US$2.06 billion in 2023, oversubscribed and backed primarily by institutional investors. The question that follows is whether Namibian pension capital participates alongside this global investment interest.
The fiduciary concerns often raised by pension trustees regarding mining private equity are legitimate. Commodity price volatility, long development timelines, geological risk and capital intensity are all inherent features of the sector.
These risks apply most strongly to early-stage exploration and development-stage equity, the riskiest segment of the mining value chain.
However, they apply with considerably less force to post-feasibility or producing assets accessed through de-risked investment structures. The mining private equity landscape therefore offers a spectrum of entry points rather than a binary choice between conservative bonds and high-risk exploration equity.
From a pension fund trustee perspective, the starting point of any allocation decision remains the protection and growth of members’ retirement savings. Pension capital is long-term by nature, but it is not speculative capital. Trustees are guided by principles of prudence, diversification and a clear understanding of risk-adjusted returns.
Mining investment structures such as royalties, which entitle investors to a fixed percentage of the revenue generated by an operating mine, can provide exposure to commodity upside while limiting downside risk linked to operational costs. Similarly, secured debt or minority equity stakes in post-feasibility or producing assets where geological risk has already been resolved may provide a more suitable risk profile for institutional investors.
A disciplined allocation would therefore prioritise producing assets rather than pure exploration. This reflects the entry point that many institutional investors globally have identified as the most appropriate balance between risk and return for pension capital.
Governance is equally critical. Trustees must be satisfied that specialist managers, rigorous due diligence processes, transparent reporting and appropriate oversight structures are in place. Where these safeguards exist, mining assets can potentially form part of a diversified alternative investment portfolio without compromising the fiduciary obligation to act in the best interests of pension members.
One common concern is that Namibia’s economy is already heavily exposed to mining. This argument holds weight if investments are concentrated in domestic commodities where significant production already exists, such as uranium, gold or diamonds. However, a pension fund’s mining allocation need not be geographically or commodity-constrained. Exposure can extend to regional markets or minerals such as cobalt, tungsten or rare earth where Namibia itself has limited economic exposure. Commodity prices often move independently in response to distinct supply-demand dynamics, which allows for in-sector diversification and reduces the impact of commodity price volatility at portfolio level. This is evident today where gold, platinum and tin prices have reached multi-year highs while lithium, nickel and manganese face prolonged lows.
At present, Namibia’s pension system has both regulatory space and available capital. With only 1.3% invested against a 3.5% ceiling, no regulatory change is required for allocations to begin. What is required is a deliberate framework, strong governance and access to qualified investment managers.
Global and regional pension funds have already made such allocations. International specialist capital is actively investing in Namibian mining assets. The regulatory headroom exists, and the investment architecture is increasingly visible.
For pension trustees, the key question is therefore not whether mining can form part of an institutional portfolio, but whether the safeguards, governance structures and risk management frameworks are sufficiently robust to ensure that such participation ultimately advances both Namibia’s development ambitions and the long-term financial security of pension fund members.
*Vincent Shimutwikeni – Retirement Funds Author and Pension Industry Professional
Zach Kauraisa – Private Equity Professional
