• September 21st, 2018
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Namdia allocated minimum of US$150m diamonds for international sales

Business & Finance
Business & Finance

Edgar Brandt Windhoek Out of a total of US$430 million worth of diamonds earmarked for local manufacturing, which is in line with the marketing and sales agreement between Namibia and De Beers signed in 2016, Namib Desert Diamonds (Namdia) has been granted the right to 15 percent, or a minimum of US$150 million, for international sales. Namdia participates directly in the diamond value chain by trading and distributing its allocation (which it buys) of Namibian rough diamonds to discerning international markets, obtaining attractive margins in the process. “Our 15 percent, or a minimum of US$150 million, was earmarked for international sales and not for the local market. This was a deliberate policy decision by the government in order to make inroads into the international market and reduce our reliance on the middleman in selling our stones. This was done to give us better insights into this very secretive and opaque industry. It was also done to increase our skills, our capacity to value and to negotiate and sell our own diamonds ourselves as Namibians,” explained Namdia’s chief executive officer, Kennedy Hamutenya. Hamutenya noted that this was done bearing in mind that diamonds are an economically strategic commodity which contributes disproportionally to Namibia’s state coffers. “It therefore only makes sense that we develop our skills, knowledge and capacity to market and sell our own diamonds instead of relying on a foreign multinational company.” He pointed out that a country like Angola actually sells its own diamonds and has offices in Antwerp, Hong Kong and Dubai but said Namibians seem to have a diamond phobia and would rather trust someone to do it on their behalf. Zimbabwe, he noted, also sells its own stones although they are new to the diamond world. In line with the agreement between the government and De Beers, the Namibia Diamond Trading Company (NDTC) sells Namibian diamonds, on behalf of Namdeb Holdings, to De Beers for their 85 percent entitlement and to Namdia for its 15 percent entitlement of the goods. De Beers in turn sells some of its entitlement (about US$430 million worth of goods per annum including some mixed diamonds from other countries (aggregated goods) to the diamond manufacturing companies (sight holders) in Namibia and takes some of those goods to Gaborone to be mixed with other diamonds from that country, South Africa and Canada (so-called “aggregated goods”). NDTC is therefore not involved in direct sales to the international market. “A key difference is that Namdia is a 100 percent sovereign company with no foreign ownership. Our policies, strategies and decisions are sovereign-driven. Namdia also does not deal in or handle diamonds mixed with those of other producing nations. We sell diamonds mined exclusively from Namdeb Holdings’ mines. When a client is buying Namdia diamonds they can be guaranteed that they are buying a 100 percent Namibian-mined diamond. This is particularly important for those clients who want to give assurance to their end user client that they know the source of the diamond – that it was not involved in child labour, that it is not tainted as a conflict or blood diamond and that it has no links with money laundering or financing of terrorism,” Hamutenya noted. The other major difference between Namdia and NDTC is that the proceeds from Namdia’s sales exclusively benefit the government but at NDTC the proceeds are split in half, with 50 percent going to De Beers and 50 percent going to government. “Also we do not sell to local sight holders. The NDTC is tasked to sell to local sight holders (local diamond cutting and polishing factories) in line with the provisions of the agreement between GRN and De Beers,” said Hamutenya. “Namdia is a brave idea and a revolution that should have happened twenty years ago. Better late than never though, and finally we are pushing sovereignty over our natural endowment of resources to a new plateau,” Hamutenya said.
2018-03-27 09:29:47 5 months ago
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