05 Dec Interview with H.E. Tom Alweendo, Minister of Mines and Energy, Namibia
BF: Mining and energy are two of the most dynamic sectors in the Namibian economy, and both have captivated international headlines in the past few years. As the Minister of Mines and Energy, could you give us an overview of your main ministerial priorities for Namibia’s mining and energy sectors in 2022/23?
TA: Our economy for decades has been dominated by mining. Mining makes up to 20% of our GDP and that is a huge sector. Therefore, minerals are really something that we are keen to make sure mean something to the country. The problem we have is Africa. Africa has so many minerals. The unfortunate thing is that with those minerals, people come and take them away and disappear somewhere else while Africa continues to be poor. What we have decided to do is to say that our minerals need to work for us. Given that up to 20% of our GDP is from mining, for example, it could even be more if we were going to concentrate on adding value to those minerals before they are exported in raw form. That’s really where we are.
When we get all the investors who come to us, we are now saying, yes, we do welcome investors, but we do not want investors who are only going take out the minerals, take them away and add value to somewhere else. As an economy, we’re exporting jobs, and this is one of our difficulties, or one of the biggest problems, we have in terms of job creation. If we were to add more value to our minerals, I think we are going to do better. Of course, Namibia has all sorts of minerals. The biggest minerals that we have exporting are diamonds, uranium and gold. Those would be the three minerals that we have got. With diamonds we have started to add more value. We have a lot of companies that are polishing and cutting the diamonds within the country. We would want to add more of those, while not only to doing the polishing and cutting but also to putting those diamonds in jewelry. Diamonds are used in jewelry. Why can’t we make the jewelry here in Namibia rather than export the polished and cut diamonds?
On the energy side, obviously energy, as we all know, is an important sector. No economy can work without energy if you have any industry. That industry is going to need energy and therefore we need to make sure we continue to have energy. In terms of electricity, we do not currently generate enough supply to meet our demand, therefore we still import some of our electricity. We are quickly closing that gap and we have an ambition to say by 2023, 85% of our electricity needs will be locally generated. The generation filling that gap is mostly coming from wind and solar because we do have very good wind and solar regimes, especially in the southern part of the country, and by 2023 our aim is to have 85% of our electricity needs locally generated. That is the overall summary of the sector.
Regarding energy, I can also talk about the fact that since last year we have been promoting the production of green hydrogen. We were then able to promote ourselves on the continent as a hub for green hydrogen. So far, we do have investors that are working with us, and the idea is that, by 2027, we should probably be producing about 10-12 million tons of green hydrogen. That is an ambitious plan we have, but I think where we are today, we are certainly going to make it. In fact, during the last COP27 in Egypt, we just launched our green hydrogen strategy that will then chart the path of how we are going to be working to where we are producing green halogen, so that is all part of energy issues. Then you talk about how we can then reach net zero. In fact, Namibia is going to probably reach net zero much faster than anybody else because that amount of green hydrogen that we are producing, which of course will be used in our own industry but mostly for export. We have signed a couple of MOUs for off take agreements with the European countries, like Germany, Belgium and the Netherlands. It will help to decarbonize the globe, it’s not just for our own use but also for the countries that are waste polluters, and therefore if they can have green hydrogen that is produced in Namibia, we will then reach net zero faster than anyone else.
BF: Namibia has ambitious goals to become a global leader in green hydrogen production. As such, you’ve actively been working to harness the landscape’s extraordinary potential for green hydrogen production, starting with the building of Africa’s first green hydrogen plant. What are your vision and goals for Namibia’s green hydrogen industry, and what are some of the recent milestones you’ve reached on this journey?
TA: The milestone that we got last year at COP was to announce that we had a preferred company bidding for our green hydrogen sector. Then we announced to say that this is the company that will be working with us. We also did say at COP26 in Glasgow that we were working on our green hydrogen strategy, which is a long-term plan creating a pathway of how to do that. We said we were going to launch that at COP27. As I said, we just did. We also said that we were going to have to start with some pilot plans for green hydrogen. I think it was in June or July that we had advertised for those companies who want to be considered for pilot plans, just to test how this could work. Those are some of the milestones that we have achieved already on the green hydrogen pathway.
BF: Diamond and uranium-oxide are the leading sub-sectors, but you’ve been looking to diversify the country’s portfolio into other nascent “commodities of the future”. With the country’s abundance of authentic and sought-after mineral resources, which new and emerging markets within the mining sector will you be focusing on, and what is the government’s strategy for ensuring that these resources are exploited in a way that will benefit the Namibian economy and its people first?
TA: Minerals are the future. Those are the minerals that will be needed for energy storage. People talk about lithium, for example, and we currently have people doing explorations. We don’t know to what extent we have those raw materials, but we probably do have them. Therefore, we need to do more exploration to discover them. Our strategy, though, is to say if it is so critical where we need to have those raw materials for energy transitions, if it is about the minerals that are needed for batteries, we would want to have investors who are going to produce the batteries here. We do not want to simply export our raw materials for somebody to go and create the batteries somewhere else. Why can’t we find investors who not only are interested in getting their lithium, but also someone who can actually produce the final product that will utilize our minerals. That is the strategy that we are going to have. In that regard, we have just signed an MOU with the EU on the supply of critical raw materials. The whole idea is that we do not mind having investors come from the EU for our raw materials if they are going to produce the final product within the economy, not simply take the raw materials.
BF: Earlier this year, the country made significant offshore oil discoveries — estimated to be billions of barrels’ worth — that could potentially change Namibia’s economic landscape. Considering green hydrogen and oil are star players on opposing sides of the green energy movement, could you give us some insight into your plans for the new crude oil reserves and how the pursuit of large-scale oil exploration might support the country’s green hydrogen ambitions?
TA: Yes, we did discover oil. The two large investors were Shell and Total. They are still doing some more drilling to establish the exact quantity. People talk about billions of barrels, but that is yet to be established. All that we know is commercial discovery. Hopefully in the first quarter of next year, we will know exactly the quantity of what is there. That is what it is. Our idea which we have now agreed to with the investors is to say we need to monetize this discovery as soon as possible and hopefully in four of five years’ time we should be able to produce the first oil. It does take some time. Normally it can take up to seven or eight years, but I think that we can expedite the process such that we can produce oil as soon as possible.
The question people is, how is it possible that Namibia can embrace renewables on the green hydrogen side while also wanting to promote fossil fuel. Is that in any way a contradiction? Our view is that countries that have got resources, energy resources like fossil fuel, and it’s not fair for someone to demand to say not to use it and just start to invest in renewables, which is much harder to get investors in, because I know, for example, with the climate Paris Agreement, the rich countries have promised that they are going to make $100 billion available for people to invest in renewables, but that money is never available. If you ask, nobody knows where to get that money. It cannot be correct to say, if I find another resource like oil that can be exploited and monetized that I should not do that. Therefore, it is not a contradiction.
Despite the USA and the UK being big producers, there are people who want to say that African countries should not do that because it is going to create more pollution. Again, our argument is that Africa, as a continent, contributes less than 4% to the carbon emissions causing climate change. You cannot put so much pressure on us as if we were the biggest polluter. The biggest polluters are the industrialized nations who continue to do that. Therefore, for us we don’t see a contradiction in embracing both. We believe that exploiting and monetizing our fossil fuel, oil, and gas can help us to do better or move faster on investing in renewables. Our challenges, unlike other continents are poverty and inequality. In fact, when people talk about energy transition, the African people ask, transitioning from what? We don’t have energy; we need more energy. What we have is energy poverty and, therefore, if I have a source that can give me that energy, fossil fuel, I should probably do that. I am not saying that to disregard the fact that we know that climate change is for real. That’s for real. But we are simply making an argument to say that people who are the biggest contributor to that, they should probably be the ones to reduce their emissions much faster than us. They emit more than 80% of the problem, so I cannot be the only one to stop doing certain things while they continue doing the same thing. There is no contradiction whatsoever, but we believe that this can give us quick abilities to address poverty, unemployment and inequality. That way, it can create other subindustries simply because they need them to supply this new industry and that way, I think, it is going to be much more meaningful to them even in the local economy.
BF: The Ukraine war is now driving the West to seek alternative energy and mineral sources. Subsequently, the EU has recently expressed interest in developing Namibia’s minerals of the future (like lithium, cobalt, and graphite) and the green hydrogen industry. What is your strategy for attracting foreign investment and international partnerships for the industry?
TA: Our strategy is saying that we have the resources available and if you can come and create a win-win partnership, we are game. That’s the real strategy, that is just what it is.
BF: Do you have a final message to the readers of USA Today about choosing Namibia as their next investment and business destination?
TA: My final words are just to say, of course, Namibia welcomes investors, and I know that investors come and they have got their own demands, what their shareholders demand. The shareholders want the biggest returns on their investment, and that is fair enough. But I also say we have our shareholders, and those shareholders are the Namibian people. Therefore, what we would want to see is investors satisfying both shareholders, the Namibians, and the investment shareholders where there is a win-win outcome in these investments. We need to rethink how a win-win solution really works, and I think that is the biggest challenge we have got. As I was saying earlier, the fact that Namibia, and Africa as a whole, as a continent, has got all these resources, but we continue to be the poorest continent, that there is something wrong. Therefore, we need to change how the investments work, and therefore my message to investors is that we do welcome them to come to our shores, but we are going to demand that investment has as its goal a win-win outcome where both parties.