Namdia’s mission is price discovery – Kandjoze
On Friday the Minister of Mines and Energy, Obeth Kandjoze, emphasised the objective of Namib Desert Diamonds (Namdia) remains that of price discovery while earning government valuable revenue through taxes and dividends.
“The decision taken by government to assert its sovereign rights over its mineral resources in this manner, as opposed to nationalising mines and resources, reaffirms Namibia’s position as a country that seeks to maximise revenue and benefit from its natural resources, while maintaining Namibia’s status as an attractive and investor friendly environment,” said Kandjoze at a media briefing early on Friday morning. The briefing was called to clarify reports by The Namibian newspaper that accused Namdia of selling the country’s diamonds below market value to buyers in Dubai.
Namdia was incorporated in April this year, in terms of the Companies Act 2004, as a wholly-owned state entity. Namdia’s board of directors are of Shakespeare Masiza (chairperson), Tania Hangula (deputy chairperson), Chris Nghaamwa, Lorentha Harasses, Bonny Conjure, Venondjo Mahharero and Florentia Amuenje. The diamond commissioner in the Ministry of Mines and Energy, Kennedy Hamutenya, was seconded from the ministry as Namdia’s interim chief executive officer until a substantive CEO is appointed. Hamutenya has vast knowledge of the industry having served over 15 years as the diamond commissioner and as chairperson of Deb Marine and Namgem and director at Namdeb.
“Through Namdia, Namibia has for the first time directly solely participated in the trade of its diamonds and created a presence in the global mid-stream market. The information obtained by Namdia through the sales of diamonds will provide government with pricing and market intelligence, which would then support more effective diamond sector policymaking. The information will provide government with a greater strategic ability to shape Namibia’s destiny in a rapidly changing global diamond industry that is vulnerable to depressed commodity prices, liquidity challenges and the threat posed by growing synthetic diamond manufacturing capacity,” said Kandjoze.
Namdia successfully held its first three sales during September and November and thus met its sales target as set out in its business plan. Kandjoze noted that final sales margins cannot be disclosed to the public because Namdia is gathering sensitive pricing and market-related information, and this poses a commercial risk of competitors discovering how much Namdia is selling its stones for.
However, Kandjoze pointed out that against the background of promoting transparency and good governance, Namdia will disclose all relevant information to relevant public bodies if and when such may be required.
“Namibia has sold and will continue selling its diamond entitlement to reputable and well-stablished international clients through an established selection criteria. The Namdia selection criteria are aligned with industry best practices and international compliance requirements, which cover money laundering, terrorism financing and any other financial offences. The selection criteria cover both financial and ethical standards, including compliance with the Kimberly Process,” Kandjoze noted.
Government and De Beers have been longstanding partners in the diamond industry and are joint venture partners in Namdeb, which mines on behalf of the venture. De Beers Marine is also a 50/50 joint venture with government which mines diamonds from the ocean floor. A new agreement signed between government and De Beers earlier this year replaced the contract that saw only 10 percent of “cuttable” diamonds made available for local beneficiation.
The new agreement sees the amount of diamonds increased by 87 percent from the baseline and now stands at about N$6.2 billion worth of diamonds that are cut and polished locally.