Namibian Marine Phosphate FAQs

    1. What is Namibian Marine Phosphate (NMP)?
      NMP is a joint venture (JV) company between Australian mining house UCL Resources Limited, Oman based Mawarid Mining LLC, and Namibian company Havana Investements (PTY) Ltd.
    2. What is the total investment that NMP is going to commit to the project? 
      In addition to the exploration and feasibility study capital already invested over the past 5 years, the further capital expenditure for the whole project will amount to approximately US$326 million. In addition there will be US$50 million working capital that will be spent on the project.
    3. How is the mine being financed? Is there any debt to pay off?
      Given the capital cost involved, the JV partners have worked on a financing strategy which involves both debt and equity components. NMP currently has no third-party debt and will raise the debt component for the project development at the project level.
    4. Eighty five percent of the mine's shares are owned by Australians. How much reward will Namibia see?
      Whilst 85% of NMP is owned directly by Minemakers and UCL, their respective shareholding in NMP is actually held by their Namibian registered subsidiaries, making NMP 100% Namibian owned.
      Given the size of the Sandpiper Project, being developed by NMP, (circa. 2.0billion tonnes) the project will be in operation for many years to come, providing the Namibian government with a steady revenue flow from taxes and royalties. We are also considering increasing the shareholding of Namibians in NMP.
    5. Will NMP mining activities have an adverse effect on the existence of the monk fish resource and other species?
      NMP has commissioned a specialist to investigate the potential impact on monk fish and other species. The investigation was overseen by an independent advisor, Pat Morant of the South African Council for Scientific and Industrial Research (CSIR). The study concludes there will be a moderate to low impact within the specific areas where dredging will take place, which is not significant in terms of the overall impact to the fishing grounds.
    6. Are monk fish and other marine species in danger of extinction because of NMP's mining activities?
      As a result of Specialist Studies that were overseen by the Independent Reviewer, CSIR, NMP does not consider it likely that the monk and other marine species are in any danger of extinction due to the relatively small areas affected on an annual (up to 3 km2) and "life of mine" (up to 60 km2) basis and undertakes to work with the fishing industry (monitoring and modifying exploitation plans and dredging patterns if necessary) to prevent such an eventuality.
    7. Are there any coral reefs that will be negatively impacted as a result of NMP mining activities?
      There are no coral reefs in the NMP's mining licence area.
    8. How will you ensure that NMP operations do not result in the collapse of the Namibian fishing industry?
      NMP has complied with all the regulated due processes and completed an EIA that includes a Specialist Study on the potential impacts of the proposed dredging activities on the Namibian fishing industry. The study on fishing includes an impact assessment as well as a recommended monitoring programme to manage on-going impact assessment. However no impact has been identified that is of such a scale that would require that the proposed dredging should not go ahead or cause the collapse of the Namibian fishing industry. NMP will do verification sampling prior to the commencement of mining.
    9. What is the anticipate life of mine?
      The Mining Licence (ML170) has been granted for an initial period of 20 years. The rate of mining is to extract 5.5 Mt of sediments per year, from an area of up to 3 km2 (60 km2 for the life of the mine). However, the resource has capacity to support production for more than 100 years, should economic conditions warrant it. The mining for the first 20 years will be in Mining Area 1, where there will be very little, if any, impact on the fishing and spawning areas.
    10. How many tonnes do you expect to mine annually?
      Approximately 1 million tonnes of dry product for export will be processed during the first year, 2 million tonnes in the second year and 3 million tonnes in year three. In order to meet these production targets, NMP will have to mine 1.8 million tons in year 1, 3.7 million tonnes in year 2 and 5.5 million tonnes in year three.
    11. What sort of mining method will you be using?
      Mining typically comprises recovery of the ore and ore beneficiation. As the ore lies offshore, ore recovery is carried out by conventional dredging using a Trailing Suction Hopper Dredge (TSHD) to suck up sand from the sea floor and transport it to the inland plant for beneficiation.
    12. Do you agree with the allegation that the Environmental Management Plan (EMP) Report was rushed?
      NMP has complied with the terms of the Mining Licence issued in July 2010 as well as due processes and the relevant environmental legislation, to which the company continues to adhere. The environmental regulatory procedures in Namibia are rigorous and applicants cannot bulldoze their way through without complying with due process. The EIA/EMPR? was conducted under the guidance and management of accredited environmental consultants, with input from acknowledged specialists in the key areas of sensitivity.
    13. The Confederation of Namibian Fishing Associations is demanding that NMP conducts a "proper" EIA, are you willing to accede to this request?
      NMP has complied with the terms of the Mining Licence issued in July 2010 as well as due processes as the relevant environmental legislation, to which the company continues to adhere. The independent review consultant involved in the preparation of NMP's EIA/Environmental Management Plans concludes that the EIA has met the necessary rigorous standards according to the various local Acts and international practice.
    14. Besides the Namibian equity partner, how will Namibians benefit from the project?
      1. Namibians will benefit on a number of levels, including but not limited to:
      2. Employment and training opportunities for Namibians
      3. Employment of local contractors, and service providers of power, water, fuel etc.
      4. Local taxes
      5. Company taxes
      6. Royalties to government
      7. Personal income and other taxes paid by NMP employees
      8. Export earnings

Given the scale of NMP's Sandpiper Project resource (circa. 2.0billion tonnes), the project will be in operation for many years to come, providing the Namibian government with a steady revenue flow.

  1. What are the expected economic spin offs expected to accrue to the local economy as a result of NMP mining activities in the area?
    The project will have an enormous economic impact, not only for the Walvis Bay economy, but for the Namibian economy as a whole. The local economy will largely benefit through direct and indirect employment opportunities. The Namibian national economy will benefit from additional royalty and taxation revenue currently not realised from the phosphate mineral.
  2. How many jobs will NMP create?
    During phase 1 of the planned operation (production of phosphate rock) approximately 150 permanent new jobs will be created with 400-500 additional people employed during the development construction phase and 300 indirect employment opportunities through the requirement for support services.
  3. What sort of CSI initiatives does NMP have in place?
    Led by our local partners, our focus is on the Tsande School/Community project, where we are improving learning opportunities for the children via the construction of a dedicated computer room, with printers and internet connection. A security upgrade and a basketball court are to be completed over the next months. The project also includes a library at the school with books donated and collected in Perth, Australia. The programme has also been successful in facilitating adult learning opportunities.
    Other projects are also being identified for a Social Development Programme in the Walvis Bay area.
  4. What about radioactivity as a result of phosphate mining? If radioactive water is produced as a result of marine mining, how will you deal with this? And what effect would it have on the fishing industry and marine environment?
    In common with most phosphate rock types, there is an inherent natural background level of radiation associated with the uranium and thorium content of the phosphatic sands. However, Namibian phosphate is well within the average concentrations found in phosphate rocks around the world, and does not contain any dangerous levels of radiation. Furthermore, the radioactive minerals are found within the phosphate lattice and can only be released into the phosphoric acid during processing, and as such are not soluble in water. Therefore the rock phosphate concentrate will not produce radioactive water.
  5. What is the current selling price of phosphate, and what is it projected to be once production begins?
    Current price for the industry standard phosphate rock (Moroccan 32% P2O5) is just below USD200 per tonne. NMP's product is of a slightly lower grade than the industry standard, and is expected to realise between US$115 and $135 per tonne based on current identified markets. The long-term view on the phosphate price is positive, with an expected demand growth of 2.6% per annum.
  6. Marine phosphate mining has never been conducted before. What are some of the risks associated with it, and how will NMP deal with the hazards?
    On the beneficiation side, there is nothing new: the processing of phosphate rock ore is a well-established industry. On the recovery side, while dredging in deep water to 150 m has been accomplished already, the most significant perceived risks relate to the extended dredging depth of 225m and the suitability and acceptance of NMP's product in the market place.
    NMP has engaged one of the world's largest dredging companies, Jan de Nul, which operates dedicated deep water (150m) dredgers and have the experience of working off the Namibian coast. Marine phosphate mining is being strongly considered off the coast of New Zealand at depths of 400 metres.
  7. Why should Namibia be the first to develop marine phosphate mining? Why not let another country take on the risks?
    Marine mining is not new in Namibia. More than 50% of diamond production in Namibia comes from the marine mining operations. Namibia has a well established mineral and environmental framework to ensure that a vibrant marine mining industry is maintained in balance with other ocean-based industries and activities. The Namibian deposit is the only known deposit of its type in the world
  8. How will the effluent and sludge dumped in the ocean affect marine life?
    The only material returned to the ocean is a relatively small quantity of fine seabed material, overflowing with excess water from the dredger's hopper. The dredging plume has been considered in the Specialist Study on water column quality, and is expected to have low to moderate impact, for which appropriate verification, baseline and monitoring programmes have been included in the final EIA/EMPR.
  9. It sounds like you don't know that much about what the environmental effects will be until you start mining. Why, then, should the project go ahead?
    NMP has complied with the regulated due processes and completed an EIA that includes various Specialist Studies by acknowledged experts, on the potential impacts of the proposed dredging activities on relevant aspects of the marine environment in the Mining Licence Area and surrounding areas. There are no findings from the specialist studies and the EIA that provide sufficient reason for the project not to go ahead, subject to the implementation of the recommended EMP as contained in the final EIA/EMPR.
    The minimal risks should be considered alongside the benefit of establishing a significant new industry in Namibia.
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