Nam not losing out on diamond revenue

NAMIBIAN authorities say taxes, royalties and other revenue from the diamond industry are now being closely monitored contrary to allegations that mining giant De Beers hands over to the State whatever it pleases.

Last week the Auditor General said his office, looking at audit reports, had not been concerned about recent payment of diamond royalties to State coffers. “We did not have any difficulties when auditing diamond royalties,” said Dirk Kotze, Director in the Office of the Auditor General.But The Namibian understands that as recently as three years back the Auditor General had requested the Ministry of Mines and Energy to explain how they determined what royalty amounts diamond companies should pay.A book critical of De Beers’ relations with the Namibian Government, as well the diamond monopoly’s operations in the country, alleges that the State remains at the diamond monopoly’s mercy regarding diamond revenue..It made a range of accusations against De Beers and Government’s relationship.The book Glitter & Greed, by Janine Roberts, was published last year and has been launched around the world this year.Roberts has repeatedly stated in the book that Government was simply accepting whatever De Beers gave as diamond royalties, despite the joint venture though Namdeb, the 50-50 shareholding of the State and the London-based, South African company.Roberts spent years in the early to late 1990s researching for the book, which covers diamond operations around the globe.In a chapter devoted to Namibia Roberts says that: Government did not have diamond inspectors on vessels as is the case in the fishing industry thereby leaving the possibility that mining companies could undervalue the diamonds or move them to other locations while still off-shore.The official value of the diamond was, in fact, a third of its “real” worth Government was “operating in the dark” and “had no way of checking” if the values De Beers set on the diamonds corresponded to the values obtained on the international market.Government had depended on the “goodwill” of the Central Selling Organisation (CSO), the marketing arm of De Beers which now operates as the Diamond Trading Company and that the Government “had to content itself with the vague and unverifiable De Beers estimates”.The Diamond Commissioner, Kennedy Hamutenya, who read the book, said it not only “contains a lot of inaccuracies” but the information was out dated since 1995 when Roberts visited the diamond area.”Quite a lot has changed,” said Hamutenya, pointing to the 1999 Diamond Act, which has plugged loopholes in the operations of the mining companies.Hamutenya said they had only one diamond inspector when Roberts, the author, visited the area.The Government now employs 13 inspectors, who spend more days off-shore, and that more improvements were expected.Hamutenya also said since he has been the Diamond Commissioner, a position in the Ministry of Mines and Energy, there have been no reports of De Beers “docking”, bunkering offshore or having unauthorised helicopter visits.Roberts suggested that the helicopters were used to ferry off diamonds, evading authorities.He also dismissed the charge that the diamond valuators, whom the Government hired, were underestimating the value of the gems by a third – US$100 to US$150 a carat.According to Hamutenya, Namibian diamonds have been selling for US$300 a carat.The Diamond Commissioner said Government used an independent valuator, who monitored international prices, De Beers’s selling price and what the diamond cartel paid to Namdeb and other diamond producers.”It is in the nature of the diamond business for people to claim that we are being ripped off and that they can get us a much better deal.Typically, those claims come from fly-by-nights and we have seen a lot of them jet in and out of town in recent years,” said Hamutenya.But Government and De Beers are known to have had a cosy relationship for years, though that may have been rattled by the arrival of Lev Leviev through the Samicor company, which claims to have put up Africa’s biggest cutting and polishing factory in Windhoek.Namdeb and De Beers have not responded to requests for comment sent to them months back about allegations contained in the book, among them that: De Beers deliberately overmined Namibia’s diamonds shortly before independence Namdeb had continued CDM’s racial discrimination practices, for instance that “black Namibians employed on the boats were engaged in manual shipboard tasks while the white divers did the lucrative work” and that the migrant labour system continued at least after 1994 Roberts, who is a human rights activist, described her writing as a “diamond human rights book”.Glitter & Greed was published by The Disinformation Company in New York.”We did not have any difficulties when auditing diamond royalties,” said Dirk Kotze, Director in the Office of the Auditor General.But The Namibian understands that as recently as three years back the Auditor General had requested the Ministry of Mines and Energy to explain how they determined what royalty amounts diamond companies should pay.A book critical of De Beers’ relations with the Namibian Government, as well the diamond monopoly’s operations in the country, alleges that the State remains at the diamond monopoly’s mercy regarding diamond revenue..It made a range of accusations against De Beers and Government’s relationship.The book Glitter & Greed, by Janine Roberts, was published last year and has been launched around the world this year.Roberts has repeatedly stated in the book that Government was simply accepting whatever De Beers gave as diamond royalties, despite the joint venture though Namdeb, the 50-50 shareholding of the State and the London-based, South African company.Roberts spent years in the early to late 1990s researching for the book, which covers diamond operations around the globe.In a chapter devoted to Namibia Roberts says that: Government did not have diamond inspectors on vessels as is the case in the fishing industry thereby leaving the possibility that mining companies could undervalue the diamonds or move them to other locations while still off-shore.The official value of the diamond was, in fact, a third of its “real” worth Government was “operating in the dark” and “had no way of checking” if the values De Beers set on the diamonds corresponded to the values obtained on the international market.Government had depended on the “goodwill” of the Central Selling Organisation (CSO), the marketing arm of De Beers which now operates as the Diamond Trading Company and that the Government “had to content itself with the vague and unverifiable De Beers estimates”.The Diamond Commissioner, Kennedy Hamutenya, who read the book, said it not only “contains a lot of inaccuracies” but the information was out dated since 1995 when Roberts visited the diamond area.”Quite a lot has changed,” said Hamutenya, pointing to the 1999 Diamond Act, which has plugged loopholes in the operations of the mining companies.Hamutenya said they had only one diamond inspector when Roberts, the author, visited the area.The Government now employs 13 inspectors, who spend more days off-shore, and that more improvements were expected.Hamutenya also said since he has been the Diamond Commissioner, a position in the Ministry of Mines and Energy, there have been no reports of De Beers “docking”, bunkering offshore or having unauthorised helicopter visits.Roberts suggested that the helicopters were used to ferry off diamonds, evading authorities.He also dismissed the charge that the diamond valuators, whom the Government hired, were underestimating the value of the gems by a third – US$100 to US$150 a carat.According to Hamutenya, Namibian diamonds have been selling for US$300 a carat.The Diamond Commissioner said Government used an independent valuator, who monitored international prices, De Beers’s selling price and what the diamond cartel paid to Namdeb and other diamond producers.”It is in the nature of the diamond business for people to claim that we are being ripped off and that they can g
et us a much better deal.Typically, those claims come from fly-by-nights and we have seen a lot of them jet in and out of town in recent years,” said Hamutenya.But Government and De Beers are known to have had a cosy relationship for years, though that may have been rattled by the arrival of Lev Leviev through the Samicor company, which claims to have put up Africa’s biggest cutting and polishing factory in Windhoek.Namdeb and De Beers have not responded to requests for comment sent to them months back about allegations contained in the book, among them that: De Beers deliberately overmined Namibia’s diamonds shortly before independence Namdeb had continued CDM’s racial discrimination practices, for instance that “black Namibians employed on the boats were engaged in manual shipboard tasks while the white divers did the lucrative work” and that the migrant labour system continued at least after 1994 Roberts, who is a human rights activist, described her writing as a “diamond human rights book”.Glitter & Greed was published by The Disinformation Company in New York.