CHAMWE KAIRA
The government of Namibia will be in a position to negotiate for an improved sales agreement with De Beers using Namib Desert Diamonds Pty Ltd (Namdia) price recovery system that saw Namibian diamonds sold outside the De Beers system getting as much as more than 12% compared to De Beers’ diamond prices. Namdia is a wholly owned government diamond trading company that exclusively sells diamonds outside the De Beers system.
The company is entitled to 15 percent of diamonds processed by the Namibian Diamond Trading company consisting of 22.6 percent above 2 carats, 76.2 percent below 2 carats and 1.2 percent special and fancy stones.
Namdia executives said this week that following an improved sales agreement signed recently between Botswana and De Beers, Namibia will be in a good position to negotiate for a better sales agreement using prices fetched by Namdia in markets outside the De Beers system.
“We exist to discover the price recovery system for government and find niche for Namibian diamonds in the world,” said Namdia CEO, Alisa Amupolo.
She elaborated that the ‘positive wind that is blowing’ after the De Beers and Botswana agreement will have the ripple effect on Namibian negotiations with De Beers and the government of Namibia, when the agreement expires in 2026.
“We could also look forward to an increased capacity. We (Namdia) have really created value since our inception,” said Amupolo.
Uahoroka Kauta, Chief Operations Officer, said Namdia has proven that Namibian diamonds are able to fetch above the De Beers price selling value.
“That is the impact that Namdia is bringing to the table. The Minister of Mines and Energy must bring this to the table to motivate for a larger share in negotiations with De Beers.”
Under the new joint mining agreement, Botswana will get a 30 percent share of the rough stones extracted, up from 25 percent, and it will rise to 50 percent within a decade.
The agreement also includes establishing an academy in Botswana that will train locals in skills in the diamond trade.
The current 10-year agreement between De Beers and Namibia was signed in 2016 with an increase in rough diamonds made available for beneficiation as a result of the agreement, with a 15% of rough diamonds being offered annually to Namibia Diamond Trading Company customers. As part of the agreement, all Namdeb Holdings’ Special Stones were made available for sale in Namibia.
In addition, the agreement provided for 15 percent of Namdeb Holdings’ run-of-mine production per annum to be made available to Namdia.
Amupolo who became CEO, 10 months ago bemoaned that the Namibian diamond story ‘is not known out there.’
“When are go around the world people are talking about Botswana diamonds, but yet Namibia has the superior quality, it has the alluvial diamonds, the best in the world.”
She added that the Namdia has benefited from the huge demand for diamonds post Covid as the factories that had closed reopened to restock. The war in Ukraine also had a temporary price upset. The current threat to prices are the weak economies in China and the US, the two biggest markets for diamonds in the world.
Amupolo said lab grown or synthetic diamonds are starting to co-exist with natural diamonds and account for 20 percent of the market share in China.
Namdia’s executive for market development, sales and branding, Lelly Usiku, said Namdia which was established in 2016, introduced the competitive bidding process as part of sales in 2022.
The company is on a mission to catch maximum prices for the Namibian diamonds, Usiku said.
She also mentioned that lab grown diamonds are a threat to natural diamonds, which may spell bad news for diamond producers like Namibia.
Usiku said Namdia vision is to have participation, throughout the value chain and serve as a price discovery mechanism for the government. Before the formation of Namdia, Namibian diamonds were exclusively sold via De Beers system. Usiku said Namdia provides a window in which diamonds sold exclusively.
“That is something that we want to capitalize on. We operate outside the De Beers system; we ensure that we catch maximum value for our diamonds.”
Namdia invites clients for competitive bidding and has 36 clients from Belgium, Dubai, India, Israel and Namibia.
