Namibia's mining outlook worsens amid diamond slump, rising costs

Namibia's mining outlook worsens amid diamond slump, rising costs - Rossing Mine near the coastal town of Swakopmund, Namibia. (Photo: Xinhua)

Production of uranium, zinc and gold rose 8 per cent, 27 per cent and 4 per cent, respectively, but the gains were insufficient to offset the decline in diamonds.

Namibia's mining sector is projected to contract by 6.2 per cent in 2026, a sharper decline than previously forecast, the Chamber of Mines of Namibia said Monday.

In its September 2026 Monthly Mining Update, the chamber said the Bank of Namibia had revised its forecast from a contraction of 2.2 per cent, reflecting weaker mining output so far this year.

The country's mining production composite index fell 4 per cent month on month in August, driven by a 12 per cent drop in diamond output. Production of uranium, zinc and gold rose 8 per cent, 27 per cent and 4 per cent, respectively, but the gains were insufficient to offset the decline in diamonds.

Rising fuel prices were also squeezing profit margins at profitable mines and deepening financial pressure on loss-making operations, the chamber said. Continued fuel inflation could keep operating costs elevated in the coming months, particularly for mines facing weaker commodity prices.

Despite these challenges, minerals accounted for about 72 per cent of Namibia's domestic exports in August, generating 6.69 billion Namibian dollars (about Sh52.9 billion) out of a total of 9.33 billion Namibian dollars (Sh73 billion).

Uranium export earnings surged 438 per cent month on month to 3.36 billion Namibian dollars (Sh26.5 billion).

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The increase followed the resumption of full production at the Husab mine in July after a planned maintenance shutdown in June, according to the report.

However, mineral prices were mixed in September, with gold and tin recording monthly declines, although prices remained supportive of the sector overall, the chamber said.

The medium- to long-term outlook remained positive, supported by firm gold and uranium prices, as well as new mining projects and planned expansions, it added.