Namibia and De Beers sign new diamond trade agreement

Rodrick Mukumbira

Namdeb and De Beers have signed a new diamond trade agreement that will secure the sale of the country's diamonds until 2013.

WINDHOEK (Mineweb.com) --In July last year, diamond polisher Lev Leviev Diamonds threatened to close its cutting and polishing factory in Namibia unless the government made plans for the country’s cutting and polishing companies to source diamonds from Namdeb – its 50-50 partnership with De Beers – locally.

Namdeb’s diamonds were sold through De Beers’ London based marketing arm Diamond Trading Company (DTC). But this is likely to change, as diamond giant De Beers has agreed to help Namibia expand its gem polishing industry.

The two parties, which have been in partnership for 13 years following the formation of Namdeb, Tuesday signed a new diamond trade agreement that will secure the sale of the country’s diamonds through a new company, Namibia Diamond Trading Company (NDTC), until 2013.

The agreement, described by De Beers’ MD Gareth Penny as “the next logical step into our partnership”, comes after protracted negotiations in which the two parties sought to break an impasse over a five percent levy the government contributed to DTC’s advertising revenue and the need for local beneficiation of diamonds.

The new agreement will extend from diamond mining into diamond marketing through NDTC - a 50-50 joint venture – that will be responsible for the valuing, sorting, selling and marketing of Namdeb’s diamond production.

“We at De Beers are inspired by our purpose to deliver the diamond dreams and turn them into lasting realities. Today is the first step in turning those dream into reality,” said Penny.

This move is expected to boost the country's fledging diamond cutting and polishing industry, which has long complained about not getting enough local gems to work on.

The NDTC will sell rough diamonds to local cutting and polishing factories - 16 percent of Namdeb’s production as well as exports to DTC.

It is envisaged that NDTC will be the primary vehicle for the growth of the diamond manufacturing industry in Namibia. Working together with Namibian-based diamond manufacturers, NDTC will also support local marketing initiatives. The new agreement will ensure that up to N$2 billion worth of diamonds will be made available locally by 2009.

“Today’s agreement is further testimony to the strength of our 13 year partnership, and a demonstration of De Beers’ commitment to working together with Government to ensure that the country’s most valuable natural resource has been turned into sustainable wealth that touches the lives of all Namibians,” said De Beers’ chairman Nicky Oppenheimer.

Minister of Mines and Energy Erkki Nghimtina said the latest agreement does away with the 'discriminatory' policy applied by the DTC, under which only two local cutting and polishing companies, Namgem and Namcot, received rough diamonds.

Diamonds account for more than 40 percent of the country’s export revenue, seven percent of the government revenue and approximately 10 percent of the country’s GDP. Namibia produces approximately N$5 billion (US$680 million) worth of diamonds per year.

Namibia is also the world’s largest producer of marine and alluvial diamonds. In 2006 alone, for the first time, it produced two million carats from its joint marine activities with De Beers.

“With the signing of this agreement today we have further deepened our partnership with De Beers to ensure that diamonds contribute even further to the economic success of Namibia,” said Nghimtina.

He added, “The government’s role is no longer relegated to that of a regulator and to some extent producer through the partnership in Namdeb, but it has been elevated to a business partner in the sorting, valuing, selling and marketing of diamonds.”


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Namdeb and De Beers have signed a new diamond trade agreement that will secure the sale of the country's diamonds until 2013.