CAPE TOWN/WINDHOEK, July 24 (Reuters) – A dispute in Namibia over access to diamond-rich land around the town of Luderitz is now threatening to derail major energy projects, state and company officials said as the government steps up efforts to resolve the dispute.
Any protracted delays may scare off investors at a crucial time for Namibia, as it aims to accelerate its first oil production following large offshore finds by TotalEnergies, Shell and Galp.
At the heart of the discord are vast tracts of desert land surrounding Luderitz and Elizabeth Bay, 25 kms south, that form part of a mining licence held by Sperrgebiet Diamond Mining (SDM) company and which companies need for their projects.
“At the moment, the ministry and licence holder are in talks to find a best solution to address the issue (of land access),” a spokesperson for the mines and energy ministry said.
Besides a proposed 800 megawatt gas-to-power plant, Hyphen Energy’s $10 billion green hydrogen project and two wind farms are among those potentially affected as the year-long deadlock drags on, officials said.
Elizabeth Bay is where BW Energy plans to land a pipeline from its offshore Kudu gas field to supply a gas-to-power plant and liquefied natural gas facility.
BW Energy, which postponed a final investment decision on its Kudu project, previously told Reuters that getting land to build a power plant and 40 km onshore pipeline is a challenge.
“We have been at an impasse now for a year to conclude the mechanics of how we will coordinate and cooperate once we are in operation … this is quite urgent,” Manfriedt Muundjua, a senior BW Energy official told an energy conference in April.
The co-owners of SDM are embroiled in a Windhoek high court spat, complicating land negotiations, since the mine’s majority shareholder, Dubai-based GEM Group, was taken to court by its minority partner, Lewcor, over allegations of asset stripping.
“We are still negotiating with the mine operators but its a time-consuming process and we don’t have time,” Luderitz mayor Phillippus Balhao said.
($1 = 18.3666 Namibian dollars)
(Reporting by Wendell Roelf in Cape Town, Nelson Banya in Harare, Nyasha Nyaungwa in Windhoek; editing by David Evans)
