CHAMWE KAIRA
The Chamber of Mines of Namibia has noted that rising fuel prices are increasing cost pressures for the mining sector, highlighting the importance of continued efficiency improvements and the adoption of innovative energy solutions to maintain competitiveness.
According to the latest Monthly Mining Update for May, Namibia’s mining sector remains cautiously optimistic, supported by strong uranium and gold prices and the continued development of several mining projects.
However, higher fuel prices and broader increases in transport-related costs are contributing to a more challenging operating environment.
The latest Namibia Consumer Price Index (NCPI) report released by the Namibia Statistics Agency shows that headline inflation accelerated to 4.1% in May, up from 3.1% in April, while core inflation stood at 3.1%.
Transport inflation rose sharply to 11.5% year-on-year, with monthly transport inflation increasing to 6.3%, largely reflecting higher fuel prices.
Diesel and petrol prices increased by N$4.63 and N$1.40 per litre, respectively. Transport was also the largest contributor to overall inflation during the month.
The chamber noted that diesel remains an important input for mining operations, particularly for haulage, transport, logistics and certain on-site energy requirements.
It noted that as a result, higher fuel prices are contributing to increased operating costs across the sector.
On a positive note, the chamber said importantly, there are currently no major risks to fuel availability or supply in Namibia, and the issue facing the industry is one of cost rather than access.
Commenting on the impact of rising fuel prices, Chamber of Mines of Namibia chief executive officer, Fabian Shaanika, said: “The mining sector is highly exposed to fuel price movements because fuel is a critical input across the mining value chain, from exploration and haulage to logistics and transport. While strong uranium and gold prices continue to provide support to the sector, rising fuel and other input costs underscore the importance of ongoing efficiency improvements and cost management, particularly for operations with tighter margins.”
Diamond operations, as well as smaller and more marginal mining operations, may be more exposed to rising costs given their relatively lower ability to absorb higher input prices.
At the same time, the chamber said the current cost environment is encouraging mining companies to explore alternative energy solutions and efficiency measures.
It cited Husab Mine’s haul trucks that are capable of operating on either diesel or electricity, adding that the recent increase in diesel prices has prompted the mine to switch to electric power for its haulage fleet.
The chamber said this transition has reduced the operation’s exposure to fuel price volatility and demonstrates how electrification and energy innovation can enhance operational resilience.
