While Namibia has a history of providing mining companies with tax breaks to help them stay afloat and extend the life of mine, the situation with gold producer, B2Gold Namibia is different because the ore body at its Otjikoto mine is depleted.
“Unfortunately, our case is a situation where the ore body has been depleted. Even if we had a tax break, free diesel or didn’t have to pay any taxes, we would not continue because we simply because we don’t have any ore left to mine by end of 2025, as we go gradually through our phased closes,” B2Gold Country Manager, John Roos told Observer Money this week.
In the eight-year period since commercial production was declared, from March 2015 up to 31 December 2022, B2Gold Namibia contributed N$19.5 billion to the Namibian economy. This contribution was through local procurement, indirect taxes, salaries and wages, corporate income tax, PAYE, royalties and export levies and corporate social investments projects.
For 2023, revenue is expected to be around N$7 billion, the company expects to pay N$1.1 billion in corporate and income tax, N$280 million in royalties and export levies and N$26 million is expected to be spent on corporate social investment.
Despite this dilemma, Roos said the company has detailed, aggressive exploration programme around Otjikoto and has so far spent NS$45 million on exploration activities in the current financial year.
“Next year we are also looking at a very good budget,” he said.
Roos declined to comment on the prospects of the exploration finding new ore bodies.
“I cannot speak about prospects or things that we have identified, unfortunately that is not for the wider audience at the moment. We are not looking at an open pit mine anymore but it could potentially become an underground mine beyond 2026. This will depend on new ore bodies being discovered.
“We are going to close down the open pit, we have to retrench open pit employees,” he said.
Roos gave the break down that B2Gold has about 850 workers at the mine at the moment permanently employed.
“Next year, we are looking at 250 employees that will be impacted (retrenched). To put that in perspective that is 29 percent of the workforce and our mining tonnage reduction is also about 30 percent next year. After that 2025 then it goes down to zero. So by 2025, we will not have open pit employees anymore.”
B2Gold Namibia is a 90 percent owned subsidiary of B2Gold. The remaining 10 percent is owned by EVI Mining Company.