Govt mulling diamond sales without De Beers

NAMIBIA is considering establishing a company to sell diamonds outside of the De Beers framework that is currently in place.

“Our diamonds are sold through a joint venture with De Beers but we are considering setting up a company through which we will be able to sell our gems directly to the trade,” Isak Katali, minister of mines and energy, said at the World Diamond Congress meeting in Antwerp this week.

Katali noted that the government is still in the negotiation stage to set up the company. He explained that the idea is to give diamond dealers and manufacturers an opportunity to buy diamonds directly from Namibia.

Diamonds are mined in Namibia by Namdeb, which is a joint venture between the government and De Beers.

Namdeb production is sent to De Beers sorting facilities in Botswana and mixed with other De Beers goods, after which 10% of Namdeb’s total is returned to Namibia to be sold to approximately 12 local sightholders via the Namibia Diamond Trading Company (NDTC).

Namibia is hoping to develop its diamond industry beyond mining to enable job creation in cutting and polishing and new trading. The new state-run trading company would mirror the recent establishment of the Okavango Diamond Company in Botswana, which began selling a portion of Botswana’s production independently of De Beers in 2013.

Land and sea diamond production at Namdeb Holdings reached 432 000 carats in the first quarter of this year, Anglo American reported in April. De Beers is owned by Anglo American.

Production in the first quarter of this year was however higher by 1% when compared to the same period in 2013 when production reached 429 000 carats.

Namdeb’s carat production in the last quarter of 2013 was 465 000 carats, compared to 445 000 carats in the third quarter and 423 000 carats in the second quarter.

In 2011, the government and De Beers signed a new shareholder agreement after years of negotiations that paved the way for a 50% government stake in De Beers Marine Namibia, and the restructuring of Namdeb Diamond Corporation.

Before this agreement, the government was holding a 15% in De Beers Marine Namibia and paid N$375 million to acquire a 35% stake, which led to its shareholding to increase to 50%. De Beers and the government then formed a 50/50 Namdeb Holding (Pty) which owns 100% of the two subsidiaries Namdeb Land and Namdeb Sea (De Beers Marine Namibia).

– Rapaport-Own Reporter

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