Another 20 years for Namdeb

NAMDEB Diamond Corporation announced yesterday that their operations will no longer close down next year but resources would be made available for the mine to run until 2042.

The extra 20 years were approved by the board of directors this week – and will come with a reduction of royalties, to 5% for the first five years.

The reduced royalty fee has been something the company has been threatening the state with for some time, the government conceded to keep about 1 200 employees and introduced 600 new jobs, Namdeb’s chief executive (CEO), Riaan Burger, said.

In the late 2000s it became apparent that conventional land-based mining at Namdeb was coming to an end and it was estimated that mining would end in 2012.

In 2010, a new mining concept, utilising beach accretion, was attempted and that added a number of years to the plan.

However, by 2018, the operating cost was becoming unsustainable and Namdeb was forced to adopt a mine plan which concluded with the closure of the mine at the end of 2022.

At the time, the operating cost and labour complement were also reduced to align with this strategy through a voluntary separation exercise.

The business plan is set to jolt new life in the mine again, said Burger, and will come with an investment of about N$1,8 billion as capital expenditure.

“Without the royalty remission, it would not have been possible to do the necessary investment that we require,” said Burger.

He added that production will be ramped up over the next two and a half years to approximately 160% of the current capacity.

Present at the announcement was mines minister Tom Alweendo, who said mining remains the backbone of the Namibian economy and is one of the largest employment sectors within our country.

“Government understood the fundamental impact of what the Namdeb mine closure would have had on Namibia. Therefore, it was imperative to safeguard this operation for the benefit of sustaining the life of the mine, for both the national economy as well as preserving employment for our people and the livelihoods of families that depend on it,” he said.

Under the previous business plan, land-based operations would have come to the end of their life in 2022 due to unsustainable economics. However, a series of positive engagements between the Namdeb management team and the state has enabled the creation of a mutually beneficial new business plan that extends the life of mine. It is expected to produce an additional eight million carats of extra high-value diamonds, and contribute over N$40 billion to the state over the 20 years.

De Beers CEO Bruce Cleaver said the new business plan is in the best interest of Namibia, and Namdeb’s future is now secure and the company is positioned to continue making a significant contribution to the Namibian economy.

Email: bottomline@namibian.com.na

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