Diamond mining is projected to grow strongly in 2022 and 2023 as Debmarine Namibia’s new mining vessel is expected to commence production during the second quarter of 2022. Debmarine Namibia’s N$7 billion diamond recovery vessel, the Additional Mining Vessel (AMV3), as it is technically known, will use sub-sea crawling extraction techniques to retrieve diamonds from the seabed off the coast of Namibia. The AMV3, which is now the largest diamond recovery vessel in the world, is the new flagship of the Debmarine Namibia fleet and is expected to operate for at least 30 years.
“The diamond mining sector is estimated to have grown by 2.3% in 2021 and is further projected to expand by 26.2% and 16.5% in 2022 and 2023, respectively,” stated Bank of Namibia in its February economic outlook.
The 2021 growth rate has been revised upwards from the 1.2% published in the December 2021 economic outlook update. According to the central bank, the adjustment was based on actual volumes produced, which turned out higher than earlier estimates.
From 2022 onwards, production from offshore mining is expected to increase substantially from the new mining vessel.
Also, uranium mining is projected to expand during the forecast period despite risks from low prices and water supply issues.
“The uranium mining sector is expected to grow by 3.9% and 6.6% in 2022 and 2023, respectively. The 3.9% growth projected for 2022 is moderation from 6% in 2021. The growth estimate for 2021 has been revised down from 7.4% projected during December 2021, based on actual volumes produced,” explained BoN.
The report further stated that impending risks in the medium-term from low prices for uranium and water supply challenges remain. In the short term, however, these risks appear to have eased somewhat, as the spot price for uranium increased to over US$44 per pound during January 2022.
During 2021, it said lost production due to water supply disruptions were less pronounced compared to the year 2020 and mines are building onsite water storage facilities in order to manage future water crises.
Overall, BoN said primary industries are projected to grow by 9.6% and 8.3% in 2022 and 2023, respectively, which is a significant improvement from a 0.9% growth in 2021.
The projected improvement, according to the central bank, is mainly expected to come from the mining industry, with diamond mining anticipated to expand by 26.2% in 2022 and by 16.5% in 2023. The agriculture, forestry and fishing sector is also expected to record positive growth in 2022. Primary industries were projected to grow by 0.3% and 7.1% in 2021 and 2022, respectively, during the December 2021 economic outlook update.