Nuts and bolts of mineral rights auctions still foggy

Nuts and bolts of mineral rights auctions still foggy OGONE TLHAGE



WINDHOEK

The mines ministry says while it may not wholly agree with a recommendation by the High-Level Panel on the Namibian Economy (HLPNE) to auction mineral rights, it will go ahead with the process.

Executive director Simeon Negumbo said the ministry would support initiatives to champion the auctioning of mineral rights.

The panel recommended auctioning off Namibia’s mineral rights to ensure the country received competitive prices for its resources.

“It is important to note that the HLPNE made the recommendation to auction mineral rights. The ministry of mines did not entirely support the recommendation. However, in principle, the ministry agrees that where an area with known reserves [or] resources becomes open, such an area could be considered for auctioning following a well-structured and consultative process,” Negumbo said.

With regards to price determination, bidders will have access to data to help guide them when they bid for mineral rights, he said.

“The process could constitute, amongst other things, opening a data room where all potential bidders would have access to the available data in order to make an informed decision. As one of the conditions, a successful bidder - if foreign - could then be compelled to a joint venture with a Namibian entity,” the executive director said.

Not our baby

“Moreover, a reserve value can be determined as a function of the quality of data and expenditure that was incurred to generate such data,” he added.

The ministry would, however, not be able to manage the auctioning process, Negumbo pointed out.

“The process cannot be entirely the responsibility of the ministry, because the ministry is not a competent authority in conducting auctions.

“No auctioning of mineral rights has taken place thus far,” he said.