Lev Leviev Diamonds Namibia (LLD), the diamond cutting and polishing company that was refused a licence by Namibia Diamond Trading Company (NDTC), now claims that De Beers sabotaged them.
LLD Namibia was the only company out of 14 whose bid for a licence renewal was denied.
Kombadaedu Kapwanga, LLD Namibia managing director, last week said De Beers was behind it all.
De Beers, which is in a 50/50 venture with Namdeb, has rubbished Kapwanga’s claims saying they do not have a monopoly on the diamond market since they control about 35% of the world’s market.
NDTC has, however, said it did not renew LLD Diamonds Namibia’s sight-holding permit because the compnay failed the intense competition in the sector.
But Kapwanga insisted that his company with its significant local stake and strong international credentials through its mother company - Lev Leviev Diamonds based in Israel – had become a discomfort for De Beers.
He further argued that although there have been significant moves in carving a local niche in the diamond sector, Namibians are still not given the chance to develop and De Beers still has a grip on the industry as it decides who survives and who dies.
Kapwanga said the notion that his company is not capable of maintaining the highest diamond cutting and polishing standards is a fallacy since it is currently the biggest in the trade.
LLD Namibia that had a N$80m start-up capital injection in 2004 with a capacity to polish 25 000 carats a month, had a 550-strong work force.
Last year, the company injected N$10m for expansion.
“Where have you seen the biggest diamond-cutting firm in the world failing to stay afloat and when have you ever heard us struggling? We are actually the first diamond polishing and cutting firm in the country and currently, the biggest in the world and with all things being equal, there is no way we could be pushed out of competition by new players because we have the experience,” said Kapwanga.
He claimed that there have been clandestine attempts by De Beers to gain firm control of the diamond industry in the country and this has seen them targeting his company’s operations in order to create a monopoly.
“Firstly, it should be emphasised that only 16% of Namibian diamonds sold by NDTC are sold to factories in Namibia while the remaining are purchased directly by NDTC and sent to London. So the finite number of diamonds cannot be the reason for rejection of the application submitted by LLD Diamonds Namibia,” Kapwanga said.
He further explained that the diamond polishing industry thrives on quantity to make money and it becomes difficult when the same quantity is reduced or taken away when licenses are withdrawn.
“Namibians do not believe that you can work with diamonds and lose money. But they must understand it is not a high margin business only unless you trade a lot. Cutting is paid per carat. We have to cut a lot of diamonds to sustain the industry,” he said.
Namdeb brand manager, Pauline Thomas said they were not in a position to discuss the issue.
“Thank you for the questions but we are not in a position to respond. Please liaise with Paige Ekandjo from the NDTC who will direct you further,” she said.
De Beers Namibia spokesperson, Daniel Kali described Kapwanga’s claims as ‘factually incorrect’.
“NDTC has a board of directors, representing both shareholders (the Government of Namibia and De Beers) and its decisions are driven by their policies and practices,” he explained adding that although De Beers supplies around 35% of the world’s rough diamonds, it and does not operate any cutting and polishing facilities.
He, however, said there was no doubt that their model of partnership with the government of Namibia has delivered unprecedented value for the government and its citizens.
Kali cited the 2011 example when De Beers delivered direct value in excess of N$1.2b in taxes, royalty and dividends.
“We can only speak for ourselves as De Beers and our view is that our contribution to the economic growth and development of Namibia continues to be unrivalled.
“Mining requires immense capital and technical capability. We are absolutely in no doubt that we are the leaders in diamonds in terms of technical capability, exploration, mining and marketing i.e. we are leaders in the entire diamond pipeline – and therefore deliver the best value,” Kali boasted.
NDTC spokesperson, Brent Eiseb, however was quoted earlier in the local media saying, the diamond trader was not in a position to meet the needs of all companies wishing to receive rough diamonds due to intense competition.
He said his company ran a selection process last year, aimed at long-term viability and sustainability of the cutting and polishing industry in Namibia at large.