By: Kelvin Chiringa
Debmarine Namibia’s chief executive officer, Otto Shikongo expressed fear over a likely decline in the demand for local diamonds caused by the China/US trade war.
He was speaking at a breakfast meeting held last week in the capital.
As China and the US tear each other, they remain the biggest markets for diamonds, making up some 64%, Shikongo said.
The diamond sector has been influential in driving growth for the local economy which continues to be buffeted by stunted growth due to ongoing fiscal consolidation.
Said Shikongo, “GDP growth in the USA for 2018 was around 2.9%, with China just under 7%. The current trade war between the USA and China may have a negative impact on the demand for diamonds. De Beers is investing significantly in marketing in key markets to stimulate and maintain demand for diamonds.”
“The success of our business is impacted by global variables; diamond prices, exchange rate volatility and fuel prices. Policy certainty by the government, as a regulator, coupled with the success of the SS Nujoma gives us a platform to grow in the future.”
Debmarine performance in 2018
Meanwhile, the diamonds giant pumped out some N$137 million in investments in Lüderitz during 2018 through procurement of goods and services.
Shikongo said on top of this they invest close to N$9 million per annum in various courses ranging from education, health, security, sport and SME development through the Debmarine Namdeb Foundation.
He added that Debmarine Namibia’s 2018 production of 1.44 million carats constitutes 72% of the total Namdeb Holdings production of 2 million carats.
The 4% increase from 1.38 million in 2017 was driven by fewer import maintenance days for the Mafuta crawler vessel and the use of a technology-led approach for optimising the performance of the drill fleet.
Revenue increased 11% to N$8.9bn (US$584m), driven by increased production, improved consumer demand, price and the weakening of the N$ against the US$.
Alluvial diamond mining on land on the west coast of Namibia has been undertaken for over 110 years (since 1908) while marine diamond recovery is relatively new.
Debmarine’s life of mine is expected to be 32 years to 2050.
The employment side
Shikongo said gender diversity on the vessels has been a challenge due to the nature of their operations.
Said he, “We are constantly looking for ways to improve the current status. I am happy to report that we actually have parity on shore with 49% women. When DBMN migrated to Namibia in 2001 we started out with 14% Namibians and reached 90% in 2010, this dropped to 75% in 2011 when we acquired the Mafuta with a majority of foreigners. We are now back up at 86% Namibians.”