Lev Leviev’s $800 Million Ocean Phosphate Mining Project In Namibia Stalled By Environmental Mixup

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A Namibian newspaper “The Namibian” reports today that a group led by Israeli investor Lev Leviev has and its offshore phosphates mining project in that country put on hold by a Namibian government moratorium on such investments.

While the circumstances of the moratorium seem to be more than a little confused, the grounds for such a pause in offshore mining are environmentally based and derive from competing ministerial jurisdictions within the Namibian government. Anyone who regularly watched the BBC television series Yes Minister over the years will recognise the situation in an instant.

Leviev’s Group owns 76% of Sakawe Mining Corporation, which in turn owns all of Lev Leviev Namibia Phosphates Ltd. (LLNP). The new project was supposed to start physical production in the year 2018. The deposits are about 170km northwest off the shore of Lüderitz bay in Namibia.

The problem, though, according to Mr. Grant Rau, who is the Chief Geologist at LLNP, is that the Namibian Ministry of Fisheries and Marine Resources (MFMR) is asserting that a not-yet satisfied condition for obtaining exploration clearance from the Ministry of Environment and Tourism (MET) conflicts with a valid such clearance already obtained from the Ministry of Mines and Energy (MME).

While the MME clearance allows marine exploration, the MET clearance does not – and this is blamed on a moratorium instituted unilaterally by the Ministry of Fisheries and Marine Resources (MFMR) last year.

Rau told the Namibian the condition on the clearance no longer allows for further exploration, which hampers the progress of the demo-plant required to prove the effectiveness of the technology in a full scale production situation.

“The moratorium was actually on bulk seabed mining, and not on exploration, but MFMR are trying to bring exploration into the moratorium. Our board sits in Israel and does not want to send the expensive technology built in Norway when MFMR says no, ” Rau added.

Namibia Phosphates is planning to build a US$800 million phosphates plant at Luderitz Bay able to process two million tons of phosphate rock annually at the deposit, which could be up to two billion tons. The first step planned is supposed to be to build a US$20 million demonstration plant with state of the art technology from Norway for processing phosphates. The company has been working on the project since 2006.

Deep sea phosphate mining has attracted growing interest as new technology has opened up marine sources that could replace worn out land-based mines. However there is also some concern how such a new kind of mining might adversely affect the undersea landscape. Phosphate is one of the three principal crop nutrients, together with potash and nitrogen.

Six months ago LLNP obtained environmental clearance to proceed with its US$20 million (N$200 million) demo-plant with specially designed technology to process Namibian phosphate. The demonstration plant is for very short term testing but such tests are apparently critical before establishing a full sized US$800 million (N$8 billion) production facility at Lüderitz.

There are of course questions as to the legality of this moratorium. some supporters of the project in Namibia believe that any moratorium proposal first should have gone to the Attorney-General to see under what law it should be enacted, and then gazetted and made public as an official moratorium.

However spearheading the motivation for a moratorium is the Namibian Fisheries Minister Bernhard Esau himself, who is demanding “solid proof” that deep sea mining will not impact the environment negatively.

The moratorium also appears to have put paid to a second project, Namibia Marine Phosphate’s Sandpiper Project south-west of the coast from Walvis Bay, at least for the moment.

Esau is adamant that phosphate mining should not be permitted while there is uncertainty about the envisioned impact on the marine environment, and particularly on the fishing stocks.

In an interview, Esau warned that if any of the affected companies wanted to challenge government in court, they (the companies) will pull on the short end of the stick.

The moratorium has resulted in the appointment of the Norwegian-based Foundation for Scientific and Industrial Research (SINTEF), and Institute of Marine Research (IMR), by the Namibian government to study the impact of marine phosphate mining on the ocean environment – specifically in the context of Namibia’s fishing grounds within the “Benguela Current Large Marine Ecosystem” which is where all the deposits are.

Well, if you thought bureaucracy only reigned supreme in the developed world or, as some might say, the over-developed world, rest assured it is alive and well in full blossom here in Namibia as well. Whether to mine, or not to mine, phosphates is clearly the government’s prerogative. Whether to explore, or not to explore, is also its prerogative. But the long-standing lack of a clear policy for either is a mistake, and one which could well now be costly in terms of attracting much needed foreign investment into the country.

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