Alweendo reverses Elizabeth Bay license cancellation

TILENI MONGUDHI
October 17, 2024

THE Sperrgebiet Diamond Mining Company (SDM), owner of the Elizabeth Bay diamond mine, will live to mine another day after the Ministry of Mines and Energy decided to make a U-turn on its initial decision to cancel the SDM’s mining license. 

This development comes after the company demonstrated to the ministry that it is willing and able to resume its mining operations, which have been dormant for over a year.

Mines minister Tom Alweendo notified the embattled mining company early this month that the ministry is going to revoke its cancellation notice.

Ministry officials briefed on the matter said that Alweendo also added the condition that SDM must undertake to coexist with renewable energy players operating in the same area. These include solar and wind power producers and the country’s flagship green hydrogen project.

Alweendo has not responded to questions regarding the ministry’s about turn.


SDM acting chief executive officer Abraham Grobler confirmed that the company has reached agreement with the  ministry to uphold all its mining licenses, and terms to coexist with energy projects. He said the company has also already signed an agreement with one of the energy companies, and is engaging with the others to ensure government conditions of coexistence is met and that it also started having constructive discussions with the Lüderitz town council.

The officials said that after Alweendo notified SDM of the ministry’s intention to close them down on 25 June, the company has had several meetings with the ministry and written at least two submissions outlining its revised plan to resume diamond mining. 


These include representations on the company’s new strategy presented to the ministry during August and September. It was during these negotiations that the company also undertook to coexist with renewable energy players using the area without any compensation. 

Ministry officials said that the issue of compensation for access to the area in question was the main reason why Alweendo decided to cancel SDM’s mining license in the first place, with the lack of mining being conducted being a secondary consideration. 


Alweendo has now set a deadline of 31 March 2025 for the company to start mining again.

SDM’s Elizabeth Bay’s mining license is situated on a vast piece of land in the south of Namibia that has been restricted for over 100 years. It is known as the Sperrgebiet. The SDM’s mining license starts with land on Possession Island, which is just south of Elizabeth Bay and about 40 kilometres south of Lüderitz, and goes all the way north to Hottentot Bay, which is about 62 kilometres north of Lüderitz. This means that even the land between Lüderitz airport and the town is part of this mining license, which prohibits the town from expanding further east. This is despite the town booming due to the oil find off the town’s shores. 

The same area where the mine is located has also been identified as a strategic location to house wind and solar generation projects as well as the country’s flagship green hydropen project operated by Hyphen Hydrogen Energy. 

This area is considered strategic for the renewable energy projects because it hosts what is known as the wind corridor. 


Ministry officials maintain that key stakeholders made allegations that SDM attempted to extort them in exchange for access to the area. A 30% stake in the wind and solar energy projects was allegedly demanded, while Hyphen was allegedly informed that it should pay an annual rental fee of €10 million. 


A person involved in the renewable energy projects in the area confirmed that they had problems with SDM, who was refusing them access, thus impeding their project’s progress. However, Hyphen chief executive officer Marco Raffinetti, last month, flatly denied any dispute between Hyphen and the mining company. 

During July, media reports stated that the mining company found itself mired in several disputes, including a court dispute with mining contractor Lewcor Mining. While the government was adamant that the company was not fulfilling its obligations and requirements set out in its mining license. This includes the fact that mining has been suspended over an extended period.  Grobler said that mining will resume within a year and that the dispute with Lewcor has been resolved and the parties have amicably parted. 

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