Third revolution about to transform tranquil Lüderitz

The town of Lüderitz is in expansion mode as several development projects are expected to ramp up over the next few years. Image credit: Leon Louw for WhyAfrica

Third revolution about to transform tranquil Lüderitz

If you follow developments in Africa and you haven’t flagged Lüderitz in Namibia yet, you might be missing a trick. Plans for several large new projects are well advanced and will be commissioned before the end of this year.

By Leon Louw owner and editor of WhyAfrica    

Business in the tranquil west coast town on the southern edges of the Namib desert were as hard hit by the Covid-19 pandemic as any other region in the world. Nevertheless, plans to transform the port village into a regional powerhouse within the Southern Africa region are still on track, despite setbacks.

The first large project – Sperrgebiet Diamond Mining’s (SDM’s) re-opening of the Elizabeth Bay mine, about 40km south of Lüderitz, will be in operation as early as September 2022, with more to come over the next two year. The mine is recruiting close to 180 employees over the next few weeks.

Lüderitz finds itself in the eye of the proverbial perfect storm. Geopolitical turmoil, sanctions against Russia, volatile markets, a global energy transition and the spike in demand for diamonds are all part of a potent concoction of factors that will arguably change the face of Lüderitz forever.

The historic Elizabeth Bay diamond operation is getting a facelift as Sperrgebiet Diamond Mining Company ramps up refurbishment work in the first phase of its development plan over the next six months.

According to Paul Lombard, General Manager of Sperrgebiet Diamond Mining, Luderitz is on the cusp of an unprecented boom. Lombard also heads up the Lüderitz Business Forum “There is a buzz and new hope in Luderitz, not only because of the mine, but also because of the massive green hydrogen project that will be developed over the next four years.

Hydrogen top of mind

Philip Balhoa, a member of the town council told the BBC in an interview that the proposed green hydrogen project is set to be the “third revolution of Lüderitz, the first being the initial diamond rush and the second the great fishing booms. But over the last decade the once thriving town has been struggling with high rates of unemployment and aging infrastructure.

“For a town that’s really been struggling economically over the past 10 or 15, maybe longer, years, this is something that people are really very excited about,” he said.

Lüderitz is central in what could be the most ambitious green energy project in Africa, which will include amongst others, a large desalination plant, wind farms and a port expansion.

The preferred bidder, Hyphen Hydrogen Energy, is set to start production in 2026 and will have the rights to the project for 40 years once the necessary feasibility processes are concluded. The project will be based near the town in the Tsau //Khaeb National Park, close to the Elizabeth Bay mine, and will ultimately produce around 300,000 tonnes of green hydrogen per year.

But hydrogen is not the only thing on the minds of Lüderitz inhabitants. Norwegian company BW Energy is developing the Kudu gas field and has recently finalised a cost cutting revamp that would make electricity generated by the project much more affordable.

Gas on the mind  

The Kudu gas discovery is in the northern Orange sub-basin approximately 130 km off the south-west coast of Namibia. It is situated in Petroleum Production License 003 which has an area of 4,567 square kilometres. Lüderitz is expected to benefit as secondary industries look to service offshore developments from the port. Expansion of port infrastructure is in the pipeline.

According to Gerd Kessler, local businessman and owner of Lagoon Aquaculture, these developments are a boon for Lüderitz and an injection the town needs. Kessler operates three oyster farms in the nearby lagoon and has plans to expand in the future. The blue economy is another growing development. It is labour intensive, requires mostly unskilled labour and has limited environmental impacts.

Although Kessler’s oyster farm requires specific ecological conditions to be successful, he is convinced that the offshore mining, energy and port developments will have minimal impact on the blue economy of Lüderitz. In addition to Kessler’s oyster farms other aquaculture operation include crayfish, scallop and kelp farming.

Aquaculture has become an important industry in Lüderitz after it was dominated by farmers in Walvis Bay, north of Lüderitz for many years. “The one development that may be negative for the oysters is the mining of offshore phosphate, which affects the water quality significantly,” Kessler tells WhyAfrica in an interview.

Despite several opportunities some residents feel development is hampered by a lack of political will. Although port expansions are in the pipeline, the Namibian Port Authority seems to be moving slow in luring manganese and iron ore miners from the Northern Cape Province of South Africa to utilise the facilities.

Furthermore, a business that wants to remain anonymous, says that the railroad to Lüderitz, which is brand new, is underutilised and TransNamib, the national rail authority, will need to invest in new rolling stock.

Nevertheless, despite many possible challenges and concerns about sustainability and environmental impacts, if you want to experience Lüderitz the way it has always been, you need to take a long drive to this neck of the woods within the next two or three years.

The WhyAfrica Southern Africa Overland Road Trip will take us through five countries in 44 days. During this time, we will drive more than 9700km on the good roads, the bad roads, dirt roads and tarred roads, to visit close to 30 projects in the mining, agriculture, energy, infrastructure, tourism, conservation, and development sectors.

 This trip is made possible by: 

 Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message. WhyAfrica launched its first ever digital magazine in November 2021. The company will undertake a road trip through South Africa, Namibia, Zambia, Zimbabwe and Botswana in June and July 2022. If you are interested in sponsorship or advertising opportunities, please contact me at leon@whyafrica.co.za. We have a wide range of different packages and combo deals to give your company the greatest exposure to a rapidly growing, African readership.  

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