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Diamonds billions

Sun, 28 October 2012 18:33
by Tirivangani Masawi
Business

 

Namibia has made N$5.6b in diamond revenue in the first nine months of this year as compared to N$3.8b in the same period last year, latest statistics show.
According to data released by the Ministry of Mines and Energy and the Bank of Namibia, N$5b came from 1.1 million carats produced by all Namibian producers.
The figure, which also indicates a marked improvement from the 528 333 carats the country managed to produce in the same period last year, is just a shed below targeted production output of about 1.5 million carats.
Last year, Namibia had targeted to produce about 1.47 million carats but managed about 8.5% short.
The current production rate for the local diamond sector constitutes about 14% of the total world production targets, which according to the Kimberly Certification Process (KPC)’s 2011report, are estimated to be at around 14 billion carats.
The official statistics have also been seconded by the Bank of Namibia (BoN).
Commenting on the country’s diamond production, the BoN head of research and International Monitory Fund (IMF) appointee to Namibia Gonzalez Pastor said the diamond sector looks to be steering the Namibian economy.
He, however, said there are other revenue inflows from the Southern African Customs Union (Sacu).
“What remains a big worry is the slow production in other mining ventures, especially the uranium side. Zinc has also not been consistent and at one point, the sector had been pushed to a point where it had to look for a new market as its major buyer in South Africa could not sustain its operations,” he explained.
The increase in production for the diamond sector is still below other competitors’ targets within the region with Zimbabwe producing about three million carats annually while one of the world’s largest producers, Botswana, is targeting about four million carats this year.
However, the same cannot be said for zinc, which has hit an all-time low in terms of production and earnings in the last six months largely due to change of ownership and uncertain market activities in SA.
The uranium sector, on the other hand, which is currently second to diamonds in terms of earnings, has been pushed down on both production and export by poor global prices.
The global price uncertainty has already affected current projects including Areva which has shelved plans to open soon and Extract which sold a large chunk of their operations to the Chinese to inject capital in their operations.
The billions in Namibian diamond sector come amid growing competition from Zimbabwe, Democratic Republic of Congo (DRC) and Botswana.
Although production remains on course, other countries that have ventured into diamond production in the Sadc region such as Zimbabwe now produce almost double Namibia’s annual output.
In actual fact, Zimbabwe produced 986 962 carats in the first nine months of 2009, earning N$3.809b in revenue while in the first nine months of this year, it produced 1 196 650 carats and exported 1 220 343.
According to the KPC, DRC produced 19.249 million carats valued at $9.33 per carat; Zimbabwe had 8.5 million ‎carats valued at $56.01 per carat while Australia managed 7.829 million carats valued at $28.19 per ‎carat.