Central bank governor happy with De Beers lab-diamonds move … concerned about long term effects on natural diamonds industry

Central bank governor, Iipumbu Shiimi said he is happy about diamond production giant, De Beers’ move into the laboratory diamonds sector but is concerned it will have serious consequences on the country in the long run.

The governor has also been irked by recent negative developments at the Tschudi mine where flooding has stalled work saying this will likely pinch the sector where it hurts most, employment.

“We are all curious to see why De Beers is participating in producing diamonds in the lab because De Beers always has been priding itself of producing hard-core diamonds.”

“But probably they are in there because they want to understand what is happening there and therefore we are actually happy to see De Beers participating in there because De Beers is a stakeholder in the diamond industry and therefore if they are participating in there it also means that they are there to safeguard their investments because it is heavily invested in mining. It can not destroy that value,” he said. 

Shiimi is optimistic De Beers can control the lab-diamond production sector while he sees no immediate negative effects on Namibia’s diamond export value.

“Maybe long term yes. Maybe synthetic diamonds would gain prominence but at the moment we are not concerned about that. As I said before, the fact that de Beers is an active player there. It’s something where we draw comfort from,” he said.

Central bank hopes production at Tschudi continues while in terms of economic growth numbers, Shiimi says there will be an impact, albeit not by a huge margin. 

“The national accounts do not put a heavy weight on Tschudi because those activities where not there when we started with the current base year for the national accounts. But of course the impact on the rest of the economy is still there in terms of employment. It employs about 500 people, so if it closes down it leaves all those people and we don’t want that," he said. 

The same applies to Langer Heinrich which he says will put a wound on growth prospects.

Botswana too has given a nod to De Beers’ decision leaving its opposition cursing: “De Beers says (to Botswana) I don’t need you. There is a challenge in the diamond market, the market is shifting from the original diamonds and because De Beers is involved in this they know about these trends. It is going to be difficult to market diamonds,” said Umbrella for Democratic Change’s president, Dumo Boko.