Govt, De Beers pen agreement
Government is expected to pen an agreement with De Beers today, putting an end to protracted negotiations, with Attorney-General (AG), Sacky Shanghala, saying the two parties are finally satisfied with the sales agreement scheduled.
The agreement which has been shifted around the table as both sides were deciding on terms that are agreeable to them, is comprised of conditions which will see a portion of the diamonds mined by Namdeb being passed to the State for onward sale.
The proposed sales agreement between De Beers and the Government will enable the Namibian government to get 15% of the diamonds mined by Namdeb for supply to local gem polishing factories.
Also, the proposed 10-year sales agreement, which is still to be finalised, announced last year July has been viewed as a major step forward in making sure that a portion of the diamonds mined locally are exploited for economic progress at home but some quarters feel that Government might have been given less than what they bargained for.
Namdeb has both onshore and offshore operations and is a wholly-owned subsidiary of Namdeb Holdings (Proprietary) Limited Holdings, which is owned in equal shares (50:50) by the Government of the Republic of Namibia and De Beers. Although Shanghala did not give specifications on how long the negotiations will be expected to take before conclusion, he added that Government expects a solution to the engagement to be announced soon.
The new agreement was announced by Cabinet last year, and information at hand at that time showed that Government wanted at least 30% of the diamonds mined by Namdeb to filter into the local market; however De Beers could not give in to the demands.
Namdeb has both onshore and offshore operarations and is a wholly owned subsidiary of Namdeb Holdings (Proprietary) Limited Holdings which is owned in equal shares (50:50) by the Government of the Republic of Namibia and De Beers. Although Shanghala did not give specifications on how long the negotiations will be expected to take before conclusion he added that Government expects a solution to the engagement to be announced soon.
Shangala told The Villager that as far as the Government is concerned progress with their partner has moved swiftly and they are in concurrence with the propositions put on the table.
Pronouncements of progress on the engagement between De Beers and the Government come at a time when local diamond polishing companies are facing challenges with sustenance because of the high price of acquiring the rough stones on the market. Some of the polishing and cutting firms are said to be on the verge of collapse as they are running without enough capitalization as they have to fetch the diamonds at a rather non-cost reflective prices on the market.
Last year Minister of Mines and Energy Obeth Kandjoze told state media that the Government would form a new independent company called /Nore /Nuis (referring to a rough stone) which will be responsible for supplying the diamonds to the local market. The Minister was also upbeat, saying if the agreement is completed it would see revenue inflows of as much as N$500 million flowing into the domestic economy. Meanwhile Deputy Minister of Mines and Energy, Kornelia Shilunga, could not give her insight on the ministry’s insights on the negotiations preferring to refer questions to Kandjoze.