Debmarine Namibia, the company operating one of world’s largest state-of-the-art diamond recovery vessels the Benguela Gem, is recording a massive upsurge in diamond production, which in turn is leading to higher revenue- generation. The company’s newest vessel, constituting a massive N$7 billion investment, is expected to operate for at least 30 years, using unique sub-sea crawling extraction techniques to retrieve diamonds from the seabed.
Debmarine Namibia CEO Willy Mertens hosted an information breakfast session on the diamond industry last week at the just- concluded 2023 Mining Expo and Conference.
At the event, he shared Debmarine Namibia’s first half-year results, saying the company produced 16% more carats thanks to the new vessel. The increased production has thus far resulted in N$7.3 billion in revenue, representing a 12% increase, compared to half-year results from last year.
“The market is a bit soft due to reduced disposal income from our clients. The global economy is not where we want it to be. When looking at the market, we look at real gross domestic product (GDP), specifically the US and China, because 65% of our products go there. Another component is inflation and interest rates that are increasing, and are still at a high,” said the CEO.
Debmarine Namibia is a joint venture marine diamond prospecting and recovery company, owned in equal shares by the Namibian government and the De Beers Group. The company began operations in January 2002, and mines its diamonds off the southern coast of Namibia.
Mertens added that earnings before interest, taxes, depreciation and amortisation (EBITDA), which is used as an indicator of the overall profitability of a business, is expected to drop by 52% at the end of the financial year.
“EBITDA increased by 20% due to a cost differential. We have been efficient for the first half of the year. The margin is expected to be 52% down for the year because two vessels will go for major maintenance. The Benguela Gem will be going for its first maintenance soon, and we will thus have less production down the year,” Mertens noted.
He said Debmarine Namibia’s taxes, royalties and dividends for the year so far stand at N$2.5 billion, while local procurement stands at N$1.7 billion.
Earlier, the Bank of Namibia had stated that diamond mining is projected to expand further in 2023 on the back of a strong performance in 2022, but such growth is expected to moderate downwards. The diamond mining sector is expected to grow by 5.5% and 9.7% in 2023 and 2024, respectively.
This follows robust growth of 45.1% in 2022, which was supported by the deployment of the Benguela Gem mining vessel in the second quarter of 2022.