Namibia aims to rely less on De Beers sales

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BR Diamond 12[1]

Reuters

Namibia is negotiating to sell some of its diamonds separately from an agreement it has with De Beers, with which it is a joint venture partner in Namdeb. Photo: Reuters

Namibia, which produces the world’s highest-quality diamonds from the floor of the Atlantic Ocean, is negotiating to sell some of the gems separately from an agreement it has with Anglo American’s De Beers unit.

Mines and Energy Minister Isak Katali said last week that the government was setting up a company to sell part of the diamonds mined by Namdeb Diamond, the joint venture it owns equally with De Beers.

The project, emulating an initiative by Botswana, depended on a deal with De Beers, the minister said.

“For the company to operate, there has to be an agreement with De Beers,” Katali said, adding that Namibia would not initially want to market half of Namdeb’s output.

“We are being guided by the Botswana example.”

State-owned Okavango Diamond started selling 13 percent of Botswana’s gems in December last year, after De Beers agreed to a new 10-year marketing pact. Botswana and De Beers each own half of diamond producer Debswana.

Katali said Namibia expected negotiations on setting up the new diamond company to be completed by December.

The Orange River has formed the richest marine-diamond deposit by laying down an estimated 80 million carats of gems off the coast of Namibia.

Namibia is also renegotiating its diamond marketing agreement with De Beers, which expired in December last year.

Namdeb was seeking technology to mine deposits trapped in gulleys at depths of as much as 50m to extend operations beyond 2050, De Beers said in April.

About two-thirds of the company’s 1.76 million-carat output last year came from marine-mining operations.

De Beers is overhauling how it sells diamonds by picking customers based on their financial strength and track records as buyers at earlier offerings. The company has sought to increase prices to meet parent Anglo’s target for returns.

A London-based spokesman for De Beers declined to comment. – Bloomberg


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