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State diamond entity on the cards

Mon, 13 July 2015 02:42
by Charmaine Ngatjiheue

Government is in preparations to set up a new diamond sales’ and marketing company which will contribute to value-addition of Namibian diamonds and sales to international markets.
The new entity, /Nore /Uis, will complement the Namibia Diamond Trading Company (NDTC), which vends to the local diamond-cutting and polishing sector.
This revelation came at a time when the Ministry of Mines and Energy (MME) agreed to the terms of a new diamond sales’ and marketing agreement with De Beers Société Anonyme.
This agreement would allow the Namibia De Beers partnership (Namdeb) to sell Namibian diamonds to third parties. Namdeb was previously not allowed to sell diamonds through outside channels.
MME Chief Public Relations’ Officer Theopolina Hasheela confirmed to The Villager that the Ministry is indeed forming a new entity.
“This new entity is being formed to also sell Namibian diamonds, but I am not sure when exactly it shall become operational,” she stated.
“We can unfortunately not say much on the entity, but please wait for more information when we have a press conference regarding this matter,” Hasheela noted.
The fresh terms for the diamond sales’ and marketing agreement would see an increase in the supply of rough diamonds to the local diamond-cutting and polishing industry.
Currently, the industry is supplied with 10% of the value of local rough diamonds through the NDTC, which said earlier that the amount is not adequate to sustain the local diamond-cutting and polishing industry.
In the last financial year, diamond mining contributed to Namibia’s Gross Domestic Product and foreign exchange earnings with a total revenue of N$21.6 billion, surpassing all other forms of mining.
This in turn sums up the fact that diamond mining contributes 25.8% to the local economy’s GDP.
In the period under review, Namdeb Holdings produced a total of 1.8 million carats of diamonds, of which 1.273 million were produced by Debmarine Namibia.
Namdeb saw an improved production as the diamond company increased production in 2014 to a total of 612,265 carats against a target of 570,427 carats.
In a media briefing which the MME held not so long ago, the government approved the terms of the sales’ and marketing agreement between De Beers and Government, which also led to the establishment of the new entity.
Cabinet devised the new terms between the two teams and to negotiate a significant increase in the local supply of rough diamonds to the cutting and polishing industry in Namibia between 25%-30%, which rate is currently at 10%.
The government saw an opportunity to use its own channels instead of using that of De Deers, and said they have realised that there is a market for raw diamonds in the country.
Cabinet agreed to seek a window in the market to buy a meaningful portion of Namdeb Holdings so that they could sell the rough diamonds through alternative channels.
This will ensure that entire ranges of special stones in terms of qualities, classes and sizes are available for sale and manufacturing in Namibia without limits.
Namdeb is to be protected by reducing or eliminating disproportional risks in the agreement, such as the delivery ‘entitlement’, which was a clause in the agreement.
Meanwhile, on that same note, government has transferred its shares in Sakawe Mining Corporation (SAMICOR) and Weatherly Mining Namibia to the Epangelo mining company.
Cabinet approved a transfer of 8% of its shareholding in Samicor, and 5.1% in Weatherly, respectively.
The Ministry of Finance and the Attorney- General will confirm the transfer of the said shares.
Cabinet also mandated Mines and Energy Minister Obeth Kandjoze to identify and appoint directors from Epangelo to the respective boards of Samicor and Weatherly Mining Namibia in order to represent the interests of Government.