Monday, October 25, 2021

Namibia’s diamond industry follows in Botswana’s footsteps

What was described as a landmark event five years ago in Botswana happened in Namibia last week when De Beers and the Government of Namibia signed a new 10-year sales agreement for the sorting, valuing and sales of Namdeb Holdings’ diamonds. Namdeb Holdings is a 50:50 joint venture between the Government of Namibia and De Beers. As was in Botswana in 2011, the sales agreement marked the longest ever signed contract between the two partners. Namdeb Holdings is the equivalent of Debswana in Botswana.

De Beers Group CEO, Philippe Mellier, is quoted as saying in a communique released by Anglo American: “This sales agreement ÔÇô the longest ever between Namibia and De Beers ÔÇô not only secures long-term supply for De Beers, but also ensures that Namibia’s diamonds will continue to play a key role in national socio-economic development long into the future. Diamonds can have a powerful and transformative effect on a country’s prospects when effectively managed and I commend our partners in Government for their vision regarding the role of diamonds in national development.”

Similar to Botswana, diamonds unearthed in Namibia are sorted and valued through a 50:50 joint venture between the Government of Namibia and De Beers, referred to as the Namibia Diamond Trading Company (NDTC). NDTC sorts and values production from Namdeb Holdings. NDTC is the equivalent of Diamond Trading Company Botswana (DTCB) in Botswana. According to the communique the agreement is expected to significantly increase rough diamonds that are made available for the beneficiation of the country. The value of the rough diamonds which will be offered to NDTC customers (sightholders) annually is estimated at US$430 million. As part of the agreement, cites the statement, all Namdeb Holdings’ Special stones will be made available for sale in Namibia. The Special stones are described as typically, very large or unusual stones.

“In addition, the agreement provides for 15 per cent of Namdeb Holdings’ run-of-mine production per annum to be made available to a Government-owned independent sales company called Namib Desert Diamonds Pty Ltd,” reads the statement. It also adds that Namdeb Holdings is one of Namibia’s largest taxpayers and the country’s biggest foreign exchange generator, contributing more than one in every five Namibian dollars of foreign earnings. The sales agreement as a result is regarded as a building block to the socio-economic development that has taken place since De Beers entered into a partnership with the Government of Namibia in 1994.    

Obeth Kandjoze, Namibia’s Minister of Mines and Energy, is quoted saying: “This new agreement cements Namibia’s position as an important international diamond player and will provide further stimulus to advance our downstream industry. De Beers and Namibia have a longstanding and successful partnership and I am pleased we will continue working together for the benefit of Namibia and the diamond industry.”

Diamond production in both countries, particularly in Botswana, spans over a number of years, but critics have decried that the diamond value chain has for a long time remained outside the benefit of the countries from which the diamonds are discovered. De Beers transferred its diamond trading activities to Botswana from their previous base in London in 2013, a move that happened about 45 years since the establishment of Debswana. The transfer is what resulted in DTCB where diamonds are sorted and valued. It is expected, for both countries, that beneficiation will extend beyond the presence of sorting and valuing activities, but will gain significant visibility in employment, economic linkages and other related services.

RELATED STORIES

Read this week's paper