The Namibia Diamond Trading Company (NDTC) has terminated its sightholder agreement with NU Diamonds ‘for commercial reasons’.
The move comes as a surprise given that local diamond polishing and cutting companies are now receiving more diamonds for their operations.
Under the sales agreement signed in 2016 between the government and De Beers, rough diamonds worth US$430 million annually are now made available to sightholders.
“The non-renewal of the NDTC supply agreement was entirely a commercial decision on the part of NU Diamonds,” Brent Eiseb Senior Manager: Sales and Marketing at NDTC said in an interview.
With the non-renewal of the sightholder licence, this means that NDTC is now left with 11 sightholders.
These are Almod Diamonds Namibia Pty Ltd, Ankit Gems Namibia Pty Ltd, Diacore Namibia Pty Ltd, DYS Diamond Manufacturers Pty Ltd, Hardstone Processing Pty Ltd, Julius Klein Diamonds Namibia Pty Ltd, KGK Diamonds Namibia Pty Ltd, Namgem Manufacturing Pty Ltd, Pluczenik Diamonds Namibia Pty Ltd, Schachter and Namdar Pty Ltd and Trau Bros Namibia Pty Ltd.
NDTC said it remains committed to creating a resilient and sustainable downstream diamond industry in Namibia and seeks to support and promote employment opportunities in the domestic diamond cutting and polishing industry.
“To this end, we have been working closely with a number of stakeholders to find employment opportunities for the retrenched workers with other NDTC sightholders with the aim of minimising the impact of job losses as a result of NU Diamonds ceasing their operations in Namibia,” the company said.
NU Diamonds employed 60 people.
Eiseb said that since June 2016, two new cutting and polishing factories, namely DYS Diamonds Manufacturers and KGK Namibia, have been successfully established, employing approximately 200 workers between them.
Asked how a new sightholder to replace NU Diamonds will be selected, Eiseb said applicants have to meet certain financial, ethical and beneficiation requirements.
“NDTC has not received any applications to become an NDTC sightholder that meet these criteria since NU Diamonds ceased operations in country. However, as noted earlier above, since June 2016, two new cutting and polishing factories, namely DYS Diamonds Manufacturers and KGK Namibia, have been successfully established,” he said.
The Namibian reported last week that workers from NU Diamonds are disgruntled after the company rejected their proposed retrenchment packages.
This comes after the 63 employees were informed in May that their services would be terminated in June due to the non-renewal of its agreement with the NDTC.
The workers were demanding the payment of three months' basic salary for every employee set to be retrenched, the paper said.