NaCC: Lepidico ACE Merger Approval Review for Namibia Critical Minerals

• The Namibian Competition Commission (NaCC) is reviewing the proposed acquisition of Lepidico Chemicals Namibia (LCN) by African Critical Elements (ACE).
• The existing 20% Namibian shareholding in LCN will be preserved, and indirect Namibian ownership in the local entity is expected to increase through shares awarded to a Namibian citizen in ACE.
• ACE anticipates creating around 30 direct jobs initially, with an almost entirely Namibian workforce, and prioritizing local contractors and suppliers.
• Plans include local concentration of lepidolite to a 3.5% grade before export, ensuring value addition within Namibia.
• The NaCC is considering concerns about local ownership, participation, and the overall benefits for Namibians before making a final determination.

The NaCC is currently undertaking its Namibian Competition Commission merger review before issuing a final determination on the transaction.

The Namibian Competition Commission (NaCC) recently convened a stakeholder consultation in Windhoek to deliberate on the proposed acquisition of Lepidico Chemicals Namibia (LCN) by African Critical Elements (ACE). This crucial meeting, held last Thursday, focused on the potential implications of the NaCC Lepidico ACE merger approval, particularly regarding local ownership, employment opportunities, and value addition within Namibia's critical minerals sector. The NaCC is currently undertaking its Namibian Competition Commission merger review before issuing a final determination on the transaction.

LCN, which operates a mine in the Karibib constituency, has been under care and maintenance since 2022. This operational pause followed significant financial difficulties experienced by its initial Australian developer, largely attributed to a sharp decline in global lithium prices. The company subsequently entered voluntary administration in December 2024 and was placed into liquidation in May 2025, leaving the Karibib project unfunded and at risk of losing its vital mining licences, which were initially granted in 2018.

African Critical Elements, a private company based in the United Kingdom, brings a global footprint in the critical minerals industry, with existing interests spanning Ontario, Canada, Switzerland, Tanzania, and Zimbabwe. The consultation provided a platform for all involved parties and other stakeholders to thoroughly discuss the proposed transaction's potential benefits for Namibia, alongside addressing concerns about local participation and the economic impact of the African Critical Elements Namibia investment.

A primary concern raised during the NaCC's consultation centered on the preservation of existing Namibian shareholding in LCN. Aidan Scallan, representing ACE, provided assurances that the current 20% minority shareholding, held by the Namibian entity Puni Europe Holdings, would remain undiluted following the acquisition. This commitment directly addresses the NaCC's focus on maintaining local ownership and participation in significant foreign acquisitions within the country.

Furthermore, Scallan highlighted that the proposed transaction is expected to actually increase indirect Namibian ownership in the local entity. This enhancement will occur through the awarding of shares in ACE, the acquiring company, to Chris Movirongo, a Namibian citizen and former country manager of LCN. This strategic move aims to bolster local involvement at a higher corporate level, thereby strengthening the Namibian stake in the overall venture.

Leena Shikongo, a National Development Advisor at the National Planning Commission, confirmed that the commission had received specific concerns regarding the proposed transaction's impact on Namibian ownership and participation. These concerns underscore the NaCC merger approval process's emphasis on ensuring that foreign investments align with national interests, particularly in sensitive sectors like critical minerals.

Beyond ownership, the potential economic benefits for Namibia were a key discussion point during the NaCC's review. ACE projects that if the Karibib project progresses into production, it will create approximately 30 direct jobs during its initial operational phases, with significant potential for growth in indirect employment. A commitment was also made to ensure the workforce would be almost entirely Namibian, and local contractors and suppliers would be prioritized whenever economically feasible, fostering broader economic participation.

Local value addition was another critical aspect highlighted by ACE. The company plans to concentrate lepidolite locally to a 3.5% grade before exporting it to international markets. This processing step ensures that value is added within Namibia prior to export, rather than shipping raw materials. Such initiatives are vital for the nation's economic development, particularly in the context of Namibia critical minerals M&A.

These measures are anticipated to generate substantial foreign exchange and tax revenue for Namibia, stemming from employment, exports, and eventual profits from the project. Ms. Shikongo reiterated that the NaCC is also evaluating the broader benefits that the transaction could bring to Namibians and the country as a whole, indicating a comprehensive assessment beyond mere financial metrics.

Lawyers advising on M&A transactions in Namibia, particularly in the critical minerals sector, should closely monitor the Namibian Competition Commission's final determination on the ACE-Lepidico merger. This decision will provide crucial insight into the NaCC's stance on preserving local shareholding, employment, and value addition in foreign acquisitions, potentially influencing future deal structuring and regulatory compliance strategies.

Source: Original reporting via New Era