"In the long term, it is all about sustainability, and to survive we need to be a low-cost producer with very high levels of efficiency and productivity."
Can you give an overview of Walvis Bay Salt Holdings (Walvis Bay Salt) and the role the company plays in Namibia?
Walvis Bay Salt is a solar salt producer established about 60 years ago. The company owns an operating mining lease which was renewed in 2020 for another 15 years. The process to produce solar sea salt takes approximately 20 months from seawater to salt, and the product is then processed and sorted into various grades. Depending on the evaporation rates, we produce around 1 million mt/y, which is still relatively small compared to other countries like Australia and Brazil. The final product is marketed internationally but also locally into various brands in Namibia and South Africa. Our industry is important because it generates export revenue for the country, as we export around the continent, internationally, and distribute locally.
We are actively looking to diversify our market and client base. Walvis Bay Salt has the vision to become a world-class salt producer. In the long term, it is all about sustainability, and to survive we need to be a low-cost producer with very high levels of efficiency and productivity. We will continue to invest in our people.
Can you elaborate on your production process and how you can minimize costs?
Success in the salt industry is generally based on economies of scales and logistics. Some five years ago, we expanded our salt field by 20% which led to additional volume. As our cost base remained the same, additional volumes resulted in lower unit costs. In 2020, we also commissioned our new salt processing plant. The new facility has flexibility in its design, has enough capacity for future growth, and losses associated with processing are much lower than what we experienced in our old plant, thus increasing our yield, which translates to increased volumes and lower unit costs.
How is the company progressing under its diversification strategy?
We are investigating options to beneficiate our waste stream, and have also received interest from investors abroad to produce bromine from our bitterns. We worked with foreign investors who expressed interest, but the project lost momentum with the onset of the pandemic. Before we invest, we will have to secure offtake agreements.
Can you elaborate on Walvis Bay Salt’s ESG initiatives and on how you integrate local communities?
We believe that our success flows from our passion for the continued development of our human capital, ongoing respect for the delicate natural environment and consideration of the interests and well-being of the community in which we operate. Walvis Bay Salt’s central CSR theme focuses on the development of Namibian youth. Our main program revolves around the development of and increasing the standards of education. We recently invested N$1 million in a Namibian math teaching program, and it is the 15th consecutive year the company is involved in this initiative. We are also running an orphanage that currently houses 18 children.
Our business is situated in an environmentally sensitive area, and we prioritize minimizing our footprint, therefore, no chemicals are used. Walvis Bay is fortunate that its raw materials are seawater, sunlight and wind. We only need to add electricity, and we are investigating various renewable options.
We are starting to see the impact of global warming in terms of rising sea levels. Our pond walls are impacted, especially during high tide, and through our contacts within the BUD Group we are looking at innovative means to strengthen and better protect these walls moving forward.
How favourable is Namibia as a mining investment destination?
Namibia is sought after as a mining jurisdiction due to its richness in a variety of natural resources, its political stability and well-established infrastructure and road networks.
However, many of Namibia’s strengths are weakened due to improper management fuelled by corruption. The country’s small population leads to a lack of domestic consumption. Unemployment in Namibia is very high, and the pandemic worsened the situation. The education system in the country is problematic, and there is a constant lack of funds within this sector to attract good teachers. This is why we focused our CSR on education. The output of the education system does not satisfy employers’ needs. There is also a great room for improvement in the health system.
To position itself competitively, the country must focus on attracting foreign investment, especially regarding technology; fostering a sound education system; ensure the availability of cost-effective energy and water supply, and implementing independent power producers on a larger scale; subsidizing the logistical cost to export products; tackling corruption; changing the inflexible labour laws; removing barriers and risk for local manufacturers to enter international markets; allowing tax breaks; facilitating bilateral agreements with foreign countries to secure offtake agreements; and privatizing basic utilities.
If these principles are followed, it will reduce corruption leading to increased investment in mining and other sectors and job creation. It all starts with reduced corruption. The investment attractiveness of a country is also highly correlated with policy perception – which Namibia excels at.