In May last year, the government and De Beers signed a new 10-year sales agreement for the sorting, valuing and sales of Namdeb Holdings’ diamonds. The sales agreement is the longest ever signed between the two partners.
Namibia will see a significant increase in rough diamonds made available for beneficiation as a result of the agreement, with US$430 million (N$5.8 billion) of rough diamonds being offered annually to Namibia Diamond Trading Company (NDTC) customers. As part of the agreement, all Namdeb Holdings’ special stones will be made available for sale in Namibia.
In addition, the agreement provides for 15 percent of Namdeb Holdings’ run-of-mine production per annum to be made available to the government-owned independent sales company, Namib Desert Diamonds or Namdia.
Namdeb Holdings is a 50/50, joint venture between the government and De Beers and is the parent company for Namdeb (land) and Debmarine Namibia (sea) production. The NDTC is a 50/50 joint venture between the government and De Beers to sort and value the production outputs from Namdeb Holdings.
Windhoek Observer Business Reporter, Chamwe Kaira (CK) asked De Beers’ representative in Namibia, Daniel Kali (DK) about the new sales agreement with the Namibian government and the diamond giant’s future plans in Namibia.
CK: It has been close to a year since the government and De Beers signed a new 10-year agreement. From your point of view, how is the new agreement going?
DK: The new sales and marketing agreement, the longest between De Beers and the Government of Namibia, cements our long and mutually beneficial partnership. We are delighted that our partnership continues to deliver unprecedented value to Namibia and its people.
CK: The government now has the option of selling 15 percent of Namdeb’s annual production to other buyers outside the De Beers chain through Namdia. Namdia said the last auction in Dubai fetched more than it would have obtained through the De Beers chain. From this, it appears that Namibia was being short-changed all along. What is your reaction?
DK: Please direct questions related to Namdia, to Namdia. We do however want to state it categorically that we reject the notion that Namibia has been short-changed by De Beers. We achieve the optimal long-term, sustainable price for the diamonds we sell on behalf of Namibia.
The comparison with the single Namdia sale is flawed – given the volumes, make up, and many other factors. De Beers continues to be a world-leader in diamond mining, marketing and sales. Our diamond sales continue to be transparent, sustainable and balanced, to ensure the continued growth of the industry, while ensuring that producer countries like Namibia reap the full benefits. The year-on-year performance of our partnership in Namibia that delivers the greatest value to the Namibian treasury is testimony of our ability to produce optimal and sustained value for every carat produced.
CK: The minister of mines recently expressed concern that cutting and polishing factories were selling diamonds they receive for cutting and polishing. Do you share the same concern or is it none of your business?
DK: As partners with the Namibian Government, the performance of the Namibia diamond industry is very much our business, with government. We continue to work with government and industry to address barriers that hamper local cutting and polishing and ensure that we can create a viable and sustainable future for the industry. That is why, our joint venture, NDTC, is at the forefront of working with both the industry and officials in the Ministry of Mines and Energy to find ways of making the industry work optimally and sustainably.
CK: What other plans does the De Beers Group have lined-up for Namibia?
DK: De Beers is very excited about the newest exploration and sampling vessel that was acquired by Debmarine Namibia, the SS Nujoma. It is our continued investment in technology that ensures that Namibia remains the world’s leader in off-shore diamond exploration and mining.
Our ability to account for every aspect of revenues generated by our partnership is an aspect of immense pride for us in De Beers. Our partnership with UNAM-Southern Campus is testimony of our resolve to face, head-on, the challenges of the youth of Namibia, and to make a meaningful contribution towards finding lasting solutions.