The tussle between Namibian government and controversial Chinese firm Xinfeng has reached crescendo after it decided to stop the firm from transporting lithium ore and exporting it. The accusation against the Chinese miner was that it had indulged into corrupt practices and openly violated the government’s ban on crucial raw material exports.
The Namibia government recently ordered the police to stop Xinfeng Investments from transporting lithium ore inside the country and from exporting it. Namibia’s mining commissioner, Isabella Chirchir, instructed the country’s police chief, Joseph Shikongo, to stop any trucks carrying raw lithium ore from Xinfeng’sKohero mine, about 250km north-west of Windhoek.The minister directed trucks carrying lithium ore to Walvis Bay, Namibia’s main port, should be directed to return to the mine site.
The tussle between the Namibian government and Xinfeng has been going on for a long time because of corrupt practices. The export licence was cancelled in Octoer last for its involvement in corrupt practices.
In November 2022, Namibian Mines and Energy Minister Tom Alweendo had told Parliament that the government was only paid N$2 million in royalties for the exports by the Xingeng investment. The minister Alweendo said that Xinfeng Investments was granted leave to export 135,000 tonnes of crushed ore by his Ministry for testing purposes.
Alweendo alleged that Xinfeng was involved in irregularities as it had openly violated terms and conditions of agreement and had already started mining operations soon after receiving the mining licence. In the agreement, the company had indicated that it would start mining operations in 2024 after they have built a processing plant. In its application for the mining licence, the company claimed that it has a resource estimation of 8 million tons of ore, with an estimated lithium content of about 1%. “As part of their mining licence application, the Company assured to export a certain quantity of crushed ore to their processing plant in China in advance. It was mandatory to know the quality of ore and form of processing plant. “For this they needed an export permit, to be issued by the Mining Commissioner as per S127 of the Mining Act,” the
minister said and alleged that the company had paid bribe to minister officials for exploration licence.
Under pressure from the Xi government,, the government restored Chinese company’s lithium ore export permit.. According to northafricapost.com, In October, Namibia banned Xinfeng Investments from exporting lithium ore, until the investigation by the country’s Anti-Corruption Commission (ACC) was finished. But in a surprise turn-around, Namibian mining authorities have backtracked on the decision to cancel the permit. The Chinese company is accused of buying a mining license from a man who had acquired it illegally while the true owner was hospitalized with a brain injury. According to media reports, the latest decision was necessitated by the fact Xinfeng already had a vessel en route to Walvis Bay, Namibia’s harbor town, before the export permit was cancelled.
China has een eyeing on lithium metal in Namibia for several reasons. For one, China is seeking to diversify its sources of lithium imports, in order to reduce its reliance on a few key suppliers. Second reason is that China is making investments in lithium production in order to support its growing domestic demand for the mineral. The other reason is that China is also seeking to develop a competitive lithium industry, in order to meet the global demand for batteries for electric vehicles and other renewable energy technologies.
Alweendo lamented that over the years, a trend has emerged where exploration rights are awarded to applicants that have not proven any serious intention to do exploration. For some applicants, the main reason why they apply for exploration licences is not so much to do exploration, but rather to trade with the licences once awarded. If this practice is continued unaddressed it has a ruinous effect on our long-term mineral resources development. One of the unintended consequences of this practice is that you create a parallel market for trading in exploration licences, where huge amounts of money are exchanged.
According to the brief.com, “This in turn has the potential to create incentives for Ministry officials to be bribed to award licences inappropriately. Another unintended consequence of awarding exploration rights to those that are not able or not intending to do exploration, is the delay in discovering minerals. It results in a situation where applicants are hoarding land.”
Experts said that China has least interest in following the procedure for lithium which is a critical component in rechargeable lithium-ion batteries. China has
een aggressive investing in traditional sectors in Namibia. It has involved Namibia in the Belt and Road Initiative as well. However, the Chinese company will go out ot its way to revoke the government order.