Business – News | 2021-08-02
by Adam Hartman
CANADIAN mining outfit Deep-South Resources and its subsidiary Haib Minerals filed an application with the High Court of Namibia to review the recent refusal by the minister of mines and energy to renew Haib Minerals’ copper project licence in Namibia.
The application also seeks an urgent interdict to prevent the mines minister from granting a licence over the same licence area to anyone else.
The copper at Haib is close to the South African border and in the course of the Orange River.
It was discovered in the early 1900s and held by a South African prospector from the mid-1950s to 2003. During this period, many large companies have invested large sums of money into exploring and developing the deposit. However, development never reached the stage of constructing and operating a mine, as the deposit is large tonnage but very low grade and was always considered sub-economic.
From 2004 to 2017, the Deep-South Resources group was a minority shareholder in the project but took the control of the project from 2017 to April 2021. Since Deep-South has invested N$23 million and brought the project to the feasibility study stage, which is the last stage of development before mine construction, plans were afoot to begin mining on a small scale in 2024.
“Our programme, proposed from May 2021 to April 2023, was to complete the feasibility study with an N$81 million investment. We had already started the feasibility study when the minister refused to renew the licence,” Deep-South Resources chief executive officer Pierre Léveillé told The Namibian last week.
According to Ministry of Mines and Energy spokesperson Andreas Simon, the minister is not allowed to renew an exclusive prospecting licence on more than two occasions unless he deems it desirable in the interest of the development of the mineral resources in Namibia.
Deep-South’s licence had been valid for 17 years and was renewed on seven occasions, Simon said.
“At this stage, the project has failed to advance even to the pre-feasibility stage. Therefore, it is no longer in the interest of orderly management of the mineral resources to grant them an eighth renewal,” he said.
“The refusal to renew the licence is not clear and we have received very vague reasons for this. They mentioned that we have not carried out substantial exploration expenditures without specifying any amounts. They also stated that we have failed to bring the project to pre-feasibility study, but we are currently at feasibility study stage, which is more advanced than a pre-feasibility,” explained Léveillé.
The refusal has also resulted in the retrenchment of 42 people last month.The worst were the retrenchments, while the company also stopping internship with the University of Namibia (Unam) students and research programmes with the Unam geo-science department, Léveillé said.
He said there was also a concern that another exploration company applied for an exploration licence covering the Haib copper deposit last November, a day before the minister announced a moratorium on new exploration licence applications in order to reform the application procedures.
“We should have been informed of this application that happened six months before the expiry of our licence. It is pretty strange that the ministry accepted this application but has continued to grant us drilling permits and samples exportation permits allowing us to continue to develop the project,” said Léveillé.
Simon confirmed that a Namibian-registered company has applied for a new exploration and processing licence over the same area, but said that company plays no role in the matter, as the application is not yet processed pending the finalisation of the matter in court with Deep-South.
“The minister used the provisions of the law that empower him to do what is lawful. The matter is now with the court because the decision by the minister to refuse the renewal is final and this action seems to have aggravated the applicant,” Simon said. He added that depending on the outcome of the case, “whoever is found to be unlawful should be compelled by the law to do what is lawful”.
If Deep-South, however, wins its case, an investment of about N$5 billion and up to 200 new jobs, as well as N$8 billion in copper sales, could become reality.