Breakthrough on gem deal

GOVERNMENT and diamond giant De Beers are set to sign a new sales agreement at the end of the month, it was announced yesterday.

And, as a result of what Mining Minister Erkki Nghimtina described as “successful negotiations”, the Namibian diamond-cutting industry will be the beneficiaries of a better deal. They will now be able to buy Namibian rough diamonds inside the country, Nghimtina told the National Assembly.”The local cutting and polishing [industry] will be able to benefit from rough [diamonds] produced in Namibia, unlike in the past when they had to struggle to access locally produced rough diamonds,” the Minister said.Talks on the partnership contract renewal started a year ago – in November 2005.”The negotiations were rather protracted and very complex, all for a good reason because Government wanted to make sure it gets the best deal possible,” Nghimtina said yesterday.”Given the sensitivity of the matter, I ask you to please bear with us while we are working on the final details of the agreements, which unfortunately cannot be divulged at present.”In response to a question from DTA MP McHenry Venaani, Nghimtina said: “The major issues have been dealt with and the respective teams are now busy drafting the necessary agreements, which are expected to be finalised and ready for signing by November 30 2006.”The Namibian Government entered into a joint venture with De Beers in 1994 and the Namibian Diamond Corporation (Namdeb) was formed with both partners having a 50 per cent stake in the company.The sales agreement has to be renegotiated every five years, with the last one signed in 2000.Stephen Lussier, the Executive Director of External and Corporate Affairs for the De Beers Group, said in an interview with The Namibian in London last month that the contract would set the trend for the next 10 to 15 years and it was therefore imperative that both parties made sure that it was solid.At that time, Lussier predicted that the new deal should be wrapped up by the end of the year.Although the Minister did not pronounced on the issue yesterday, industry insiders have previously said Section 59 of the Diamond Act – which Namibia’s Minister of Mines can invoke – is likely to stay intact.It allows for 10 per cent of any diamond production to be sold separately to test the market.Although Namibia does not produce the largest volume of diamonds in southern Africa, the quality of its alluvial production is seen as having a disproportionate impact on the quality of the mix of diamonds that De Beers is able to offer in what is termed its London Mix.They will now be able to buy Namibian rough diamonds inside the country, Nghimtina told the National Assembly.”The local cutting and polishing [industry] will be able to benefit from rough [diamonds] produced in Namibia, unlike in the past when they had to struggle to access locally produced rough diamonds,” the Minister said.Talks on the partnership contract renewal started a year ago – in November 2005.”The negotiations were rather protracted and very complex, all for a good reason because Government wanted to make sure it gets the best deal possible,” Nghimtina said yesterday.”Given the sensitivity of the matter, I ask you to please bear with us while we are working on the final details of the agreements, which unfortunately cannot be divulged at present.”In response to a question from DTA MP McHenry Venaani, Nghimtina said: “The major issues have been dealt with and the respective teams are now busy drafting the necessary agreements, which are expected to be finalised and ready for signing by November 30 2006.”The Namibian Government entered into a joint venture with De Beers in 1994 and the Namibian Diamond Corporation (Namdeb) was formed with both partners having a 50 per cent stake in the company.The sales agreement has to be renegotiated every five years, with the last one signed in 2000.Stephen Lussier, the Executive Director of External and Corporate Affairs for the De Beers Group, said in an interview with The Namibian in London last month that the contract would set the trend for the next 10 to 15 years and it was therefore imperative that both parties made sure that it was solid.At that time, Lussier predicted that the new deal should be wrapped up by the end of the year.Although the Minister did not pronounced on the issue yesterday, industry insiders have previously said Section 59 of the Diamond Act – which Namibia’s Minister of Mines can invoke – is likely to stay intact.It allows for 10 per cent of any diamond production to be sold separately to test the market.Although Namibia does not produce the largest volume of diamonds in southern Africa, the quality of its alluvial production is seen as having a disproportionate impact on the quality of the mix of diamonds that De Beers is able to offer in what is termed its London Mix.