Govt gets 15% in diamond deal
July 22, 2015, 7:13am
Govt gets 15% in diamond deal
By Chamwe Kaira
THE Namibian government and De Beers company have agreed on a new 10-year sales agreement but the deal falls short of what the government was demanding.
Last month, Cabinet said it wanted up to 30% of rough diamonds produced by Namdeb Holdings, to be supplied to local factories under the new sales agreement. Namdeb, which has land and sea operations, is owned 50/50 by the government and De Beers.
But under the new agreement announced yesterday the government will only get 15% from Namdeb's annual production - half of what the state has been demanding. These diamonds will be provided to 'an independent sales outlet.'
The government has already said it will form a new company that will supply these diamonds to local factories. Last month, minister of mines and energy Obeth Kandjoze told the New Era newspaper that the company will be called /Nore /Uis - referring to a rough stone.
Kandjoze was further quoted by the Southern Times newspaper last month as saying the country would earn U$550 million if more diamonds were made available to local factories for processing.
Yesterday, minister of information Tjekero Tweya said he had not seen the final agreement hence he could not comment whether the government was happy or not with the agreement.
“I have not seen the final agreement, otherwise I will be shooting in the dark. I don't have the details,” he said.
He said the demand of 30% diamonds was part of the guidelines Cabinet had given the government negotiating team. Kandjoze could not be reached for a comment yesterday. In a statement released by De Beers country representative, Daniel Kali, the government and De Beers agreed in principle on the terms of a new 10-year deal for the sorting, valuing and sale of all Namdeb Holdings' diamonds (production from Namdeb and Debmarine Namibia).
The agreement will be the longest sales contract ever agreed between the two partners, the statement said.
While 15% of Namdeb's diamonds will be sold outside the new sales agreement, Namibia Diamond Trading Company (NDTC) will continue to sort and value all Namdeb Holdings' production.
“De Beers will continue to support the domestic cutting and polishing industry in Namibia, and will increase its commitment by making more diamonds available for manufacturing businesses operating in the country,” the statement said.
Bruce Cleaver, De Beers' executive head of strategy, who led the De Beers negotiating team, said: “We have a long and proud partnership with Namibia, going back more than two decades. This 10-year sales agreement demonstrates De Beers' continued commitment to ensuring that diamonds from Namibia continue to play a key role in the socio-economic development of the country.”
Kali said De Beers was happy with the agreement and refuted claims that the government had gotten a raw deal. “It is a substantial increase (diamonds for local supply) from the last agreement,” he said.
Namdeb's production fell slightly to 431 000 carats in the second quarter of this year as a result of lower grades and throughput at the land operations, due in part to short-term industrial action, De Beers said in the second quarter production report released last week.
In 2014, Namdeb Holdings produced 1,8 million carats of diamonds, of which 1,2 million were produced by Debmarine Namibia. That was the largest annual production recorded to date by Debmarine Namibia, breaking the record for the third year in a row.