Namibia's Mining Sector: Navigating Challenges and Opportunities in 2025

Namibia's mining sector, a critical driver of the country's economy, is expected to face both challenges and opportunities in 2025. The sector, which accounts for roughly 10 percent of Namibia's GDP annually, has historically been dominated by diamond mining, with significant contributions from uranium and other minerals. As the global economy evolves and new opportunities emerge, Namibia's mining sector must adapt to remain competitive and sustainable.



The Bank of Namibia (BoN) projects that the metal ores sub-sector, particularly gold, is expected to grow by 26.2% in 2024, driven by higher-grade gold ore extraction and rising global gold prices. This growth 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.

However, other mining and quarrying subsectors are expected to experience slower growth in 2024 and 2025. The oil exploration subsector is anticipated 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. Similarly, the uranium mining sector is expected to experience slower growth in 2024, primarily due to the impact of ongoing strip mining activities on production volumes. 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.

These anticipated slowdowns in other mining and quarrying subsectors, such as oil exploration and diamond output, influence the overall investment attractiveness of the Namibian mining sector by encouraging diversification, highlighting the attractiveness of high-growth subsectors, promoting stability and resilience, and emphasizing the long-term potential of the sector. By considering these factors, investors can make more informed decisions about allocating resources within the Namibian mining sector.

In conclusion, Namibia's mining sector is expected to face both challenges and opportunities in 2025. While the metal ores sub-sector, particularly gold, is projected to experience significant growth, other subsectors are expected to slow down. To navigate these challenges and capitalize on opportunities, the Namibian government and mining companies must focus on diversifying the economy, improving the business environment, and attracting foreign direct investment. By doing so, they can ensure the long-term sustainability and growth of the mining sector, contributing to Namibia's overall economic development.