‘De Beers must plough back’

Speaking at a gala dinner hosted by De Beers, Pohamba said that government and the mining sector must forge win-win partnerships adding that companies with roots in the continent such as De Beers should plough back wealth generated in Africa.

“This calls for African governments and business entities to forge strategic win-win partnerships that can lift our continent from the mire of poverty and under-development,” Pohamba said.

There has been growing concern in the continent that most of its mineral wealth is being flighted out to develop the already developed western world.

De Beers is one of Namibia’s largest investors in the diamond mining and cutting industry.

The global firm also operates Namibia’s largest diamond producer, Namdeb on a 50-50 partnership with the government.

The Namibian government has of late been haggling with De Beers to release a quarter of its locally produced generated diamonds for beneficiation by locally owned diamond cutting firm, LLD Diamonds Namibia.

Government is also locked in re-negotiations with De Beers over a diamond sales agreement, which the global diamond firm to sell all Namdeb rough diamonds through the Diamond Trading Company to London.

Government wants the locally mined diamonds to be made available on the local market for cutting, branding purposes.

LLD has expressed frustration at the slow pace of negotiations. The diamond cutting and polishing firm said that it had become uneconomic to continue buying diamonds on the international market to cut and polish them locally.

Pohamba implored De Beers to take into consideration the plight of the people who are the owners, ‘by birthright,’ of these diamonds, which he said are produced in the country and sold on the world market.

In clear sign that government is growing impatient with the diamond miner’s continued refusal to sell the local firm diamonds, Pohamba called for a change in the mindset of De Beers’ management.

“Cognisant of the legacy issues associated with the history of the exploitation of Namibia’s diamonds, we must all agree that the time is today and not tomorrow, for us to change the way we do things,” Pohamba said.

Pohamba also said that the country would this year produce 1 million carats of offshore diamonds, adding that latest marine mining technology had enabled the sector to ‘focus on offshore mining as our diamond reserves on land decline.’

But the Namibian President said that the cutting and polishing of the diamonds has long been the preserve of those ‘beyond the borders’ adding that the establishment of diamond cutting factories in the country would ensure value addition of one of the world’s most prized minerals.

“We firmly believe that value addition to our natural resources must be pursued aggressively and consistently in order to enhance economic growth, create employment opportunities and expand the manufacturing base of our economy,” Pohamba said.

Nicky Oppenheimer, who attended the gala, refused to disclose when the negotiations would be concluded.

Namibia is the last of three southern African countries to conclude such negotiations with De Beers after South Africa and Botswana.

Analysts said that the Namibian government is moving towards a system which comprises a joint venture operation of a centralised body which receives local supplies, as well as supplies from De Beers selling arm, DTC.

Should De Beers agree to such a structure, industry players would be looking at the rough supplies that the new body in Namibia will receive from Namdeb as well as the DTC.

November 2006
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