Stocks bleed after Alweendo’s comments
Ownership debacle spooks investors
International media reports quoting mines and energy minister Tom Alweendo saying that government wants a stake in all mines in Namibia have caused a slump in mining stocks in especially Australia.
Reassurances yesterday by Paladin Energy and Deep Yellow that they were not aware of any legislative changes in Namibia that would affect the ownership of their assets in the country did little to regain the confidence of shareholders and investors.
Paladin, the majority shareholder of the Langer Heinrich Mine in Namibia, had to halt trading on the Australian Stock Exchange (ASX) on Tuesday when their share price dropped by about 20% to 54 Australian cents per share.
Deep Yellow took a knock of as much as 13.4% to 54 Australian cents in its biggest intraday percentage drop since 9 May. The company recently completed a definitive feasibility study at its Tumas uranium project in Namibia.
The bloodbath was caused by international media reports quoting mines and energy minister Tom Alweendo saying that government wants a stake in all mines in Namibia.
Controversial quotes
Media reports were based on Alweendo’s comments used by Reuters and Bloomberg. According to the two news giants, Alweendo made the controversial comments in his opening remarks on Monday at the oversight workshop in Swakopmund on maximising the potential of the mining and energy sectors in Namibia.
According to Reuters and Bloomberg, Alweendo said: “We are making a case that local ownership must start with the state, which holds ownership of our natural resources.
“The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay.”
Market Watch approached Alweendo for comment on Monday, but received no response by the time of going to print.
Paladin
Paladin, who is pumping some N$2 billion into Langer Heinrich to ensure that the mine starts producing again in the first quarter of 2024, issued a statement yesterday morning, saying it has “regular ongoing dialogue with all relevant Namibian government ministries as it progresses with the restart of mining activities at the Langer Heinrich Mine”.
“The Company confirms that it is not aware of any imminent proposed Namibian legislative changes that would affect the ownership of the Langer Heinrich Mine, in which Paladin holds a 75% interest,” the company’s CEO, Ian Purdy said.
“The restart of the Langer Heinrich Mine is on target for first production in Q1 CY2024 and through our local content procurement policy, the Company is pleased to provide economic and employment opportunities to Swakopmund and the surrounding communities,” Purdy added.
Although Paladin’s share price recovered somewhat in earlier trade on the ASX yesterday, by 13:00 Namibian time it was back to Tuesday’s slump of 54 Australian cents per share.
The company’s 52-week high is 96 Australian cents per share.
Deep Yellow
Deep Yellow issued a statement on Tuesday, saying it “interreacts constantly with relevant government ministries and departments and advises that it is not aware of any elevated discussions with industry regarding government equity in mining projects”.
Deep Yellow managing director and CEO John Borshoff said: “In Deep Yellow’s experience, all matters affecting the Namibian mining industry are consistently dealt with through the Chamber of Mines, of which Deep Yellow is an active member, and are worked through with government using a detailed and orderly process involving proposals, submissions, discussions and negotiations that have invariably resulted in mutually acceptable outcomes.”
“Deep Yellow, through its extensive experience operating in Namibia, has deep confidence that the Namibian government fully understands the value of foreign investment.
“Deep Yellow also recognises and accepts the need for local ownership and, as previously reported, has between 5% and 10% of its various projects held by local Namibian equity partners, including the Tumas Uranium Project,” Borshoff added.
By 13:00 Namibian time yesterday, Deep Yellow was trading at 58 Australian cents on the ASX. Its 52-week high is A$1.26 per share.
Other mining companies
Bannerman Energy, which is developing the Etango Uranium Project in Namibia, on Tuesday fell 7.4% to a one-month low in intraday trade. It closed at A$1.27 on the ASX.
By 13:00 Namibian time yesterday, Bannerman traded at A$1.19 per share. Its 52-week high is A$2.49 per share.
Elevate Uranium, majority shareholder in, among others, the Marenica Uranium Project in Namibia, on Tuesday slumped 8.1% on the ASX, closing at 29 Australian cents per share.
By 13:00 Namibian time yesterday, Elevate’s price was 27 Australian cents. Its 52-week high is 64 Australian cents per share.
On the Toronto Stock Exchange (TSX) in Canada, Forsys Metals Corp on Tuesday closed at 42 Canadian cents per share. Forsys’ flagship asset in Namibia is the Norasa Uranium Project.
By 13:00 Namibian time yesterday, it traded at 38 Canadian cents. Its 52-week high is 83 Canadian cents per share.
Andrada Mining, with its tin mine at Uis as its flagship project in Namibia, traded at 5.91 British pounds per share on the London Stock Exchange (LSX) by 13:00 Namibian time yesterday. It closed at 6.00 pounds on Tuesday and its 52-week high is 7.30 pounds per share.
Miningmx.com yesterday reported that a spokesperson for Andrada Mining said it was unaware of any developments in terms of government ownership. The company declined to comment further.
Media reports
Tuesday’s international media reports on Alweendo’s comments varied from straight-forward to extreme.
Dhaka Tribune, an English daily in Bangladesh, headlined its report with “Paladin Energy slumps 20% as Namibia wants to steal the uranium mine”.
According to the daily: “What the minister is now saying is that the government wants to come back for another bite of the cherry. This is wildly counter-productive on the grander economic level.”
And: “You can't avoid politics in mining but what's going to happen is that mining will avoid Namibia.”
The word “nationalise” was used by online news websites like Stockhead and IG.com.
Australian Financial Review used the headline, “Uranium stocks melt down on new ‘resources nationalism’ push”.
Tradingview.com headlined with “Namibia might nationalise mining companies”. Its report stated that Namibia has joined the list of countries like Brazil, Chile and Indonesia trying to get a greater cut of their natural resources.
“Markets hate uncertainty and this could act as an overhang on stocks in those jurisdictions,” the report added.
In one of its reports, Reuters said it was unclear what percentage the country will seek in resource projects, but in March Alweendo told Namibia's parliament that the government would approach the matter with "sober mindedness".
"We need to be mindful of the fact that there is a level above which no investor will invest – a situation we clearly do not want to find ourselves in," Reuters quoted Alweendo statements in March.
Paladin, the majority shareholder of the Langer Heinrich Mine in Namibia, had to halt trading on the Australian Stock Exchange (ASX) on Tuesday when their share price dropped by about 20% to 54 Australian cents per share.
Deep Yellow took a knock of as much as 13.4% to 54 Australian cents in its biggest intraday percentage drop since 9 May. The company recently completed a definitive feasibility study at its Tumas uranium project in Namibia.
The bloodbath was caused by international media reports quoting mines and energy minister Tom Alweendo saying that government wants a stake in all mines in Namibia.
Controversial quotes
Media reports were based on Alweendo’s comments used by Reuters and Bloomberg. According to the two news giants, Alweendo made the controversial comments in his opening remarks on Monday at the oversight workshop in Swakopmund on maximising the potential of the mining and energy sectors in Namibia.
According to Reuters and Bloomberg, Alweendo said: “We are making a case that local ownership must start with the state, which holds ownership of our natural resources.
“The proposed state ownership should take the form where the state owns a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay.”
Market Watch approached Alweendo for comment on Monday, but received no response by the time of going to print.
Paladin
Paladin, who is pumping some N$2 billion into Langer Heinrich to ensure that the mine starts producing again in the first quarter of 2024, issued a statement yesterday morning, saying it has “regular ongoing dialogue with all relevant Namibian government ministries as it progresses with the restart of mining activities at the Langer Heinrich Mine”.
“The Company confirms that it is not aware of any imminent proposed Namibian legislative changes that would affect the ownership of the Langer Heinrich Mine, in which Paladin holds a 75% interest,” the company’s CEO, Ian Purdy said.
“The restart of the Langer Heinrich Mine is on target for first production in Q1 CY2024 and through our local content procurement policy, the Company is pleased to provide economic and employment opportunities to Swakopmund and the surrounding communities,” Purdy added.
Although Paladin’s share price recovered somewhat in earlier trade on the ASX yesterday, by 13:00 Namibian time it was back to Tuesday’s slump of 54 Australian cents per share.
The company’s 52-week high is 96 Australian cents per share.
Deep Yellow
Deep Yellow issued a statement on Tuesday, saying it “interreacts constantly with relevant government ministries and departments and advises that it is not aware of any elevated discussions with industry regarding government equity in mining projects”.
Deep Yellow managing director and CEO John Borshoff said: “In Deep Yellow’s experience, all matters affecting the Namibian mining industry are consistently dealt with through the Chamber of Mines, of which Deep Yellow is an active member, and are worked through with government using a detailed and orderly process involving proposals, submissions, discussions and negotiations that have invariably resulted in mutually acceptable outcomes.”
“Deep Yellow, through its extensive experience operating in Namibia, has deep confidence that the Namibian government fully understands the value of foreign investment.
“Deep Yellow also recognises and accepts the need for local ownership and, as previously reported, has between 5% and 10% of its various projects held by local Namibian equity partners, including the Tumas Uranium Project,” Borshoff added.
By 13:00 Namibian time yesterday, Deep Yellow was trading at 58 Australian cents on the ASX. Its 52-week high is A$1.26 per share.
Other mining companies
Bannerman Energy, which is developing the Etango Uranium Project in Namibia, on Tuesday fell 7.4% to a one-month low in intraday trade. It closed at A$1.27 on the ASX.
By 13:00 Namibian time yesterday, Bannerman traded at A$1.19 per share. Its 52-week high is A$2.49 per share.
Elevate Uranium, majority shareholder in, among others, the Marenica Uranium Project in Namibia, on Tuesday slumped 8.1% on the ASX, closing at 29 Australian cents per share.
By 13:00 Namibian time yesterday, Elevate’s price was 27 Australian cents. Its 52-week high is 64 Australian cents per share.
On the Toronto Stock Exchange (TSX) in Canada, Forsys Metals Corp on Tuesday closed at 42 Canadian cents per share. Forsys’ flagship asset in Namibia is the Norasa Uranium Project.
By 13:00 Namibian time yesterday, it traded at 38 Canadian cents. Its 52-week high is 83 Canadian cents per share.
Andrada Mining, with its tin mine at Uis as its flagship project in Namibia, traded at 5.91 British pounds per share on the London Stock Exchange (LSX) by 13:00 Namibian time yesterday. It closed at 6.00 pounds on Tuesday and its 52-week high is 7.30 pounds per share.
Miningmx.com yesterday reported that a spokesperson for Andrada Mining said it was unaware of any developments in terms of government ownership. The company declined to comment further.
Media reports
Tuesday’s international media reports on Alweendo’s comments varied from straight-forward to extreme.
Dhaka Tribune, an English daily in Bangladesh, headlined its report with “Paladin Energy slumps 20% as Namibia wants to steal the uranium mine”.
According to the daily: “What the minister is now saying is that the government wants to come back for another bite of the cherry. This is wildly counter-productive on the grander economic level.”
And: “You can't avoid politics in mining but what's going to happen is that mining will avoid Namibia.”
The word “nationalise” was used by online news websites like Stockhead and IG.com.
Australian Financial Review used the headline, “Uranium stocks melt down on new ‘resources nationalism’ push”.
Tradingview.com headlined with “Namibia might nationalise mining companies”. Its report stated that Namibia has joined the list of countries like Brazil, Chile and Indonesia trying to get a greater cut of their natural resources.
“Markets hate uncertainty and this could act as an overhang on stocks in those jurisdictions,” the report added.
In one of its reports, Reuters said it was unclear what percentage the country will seek in resource projects, but in March Alweendo told Namibia's parliament that the government would approach the matter with "sober mindedness".
"We need to be mindful of the fact that there is a level above which no investor will invest – a situation we clearly do not want to find ourselves in," Reuters quoted Alweendo statements in March.
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