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Namdeb closure to hit country hard

2019-08-30  Toivo Ndjebela

Namdeb closure to hit country hard

WINDHOEK – Namdeb’s mooted closure by 2022 would leave Namibia poorer by billions, and efforts are being made to explore extending the flagship company’s lifespan.

The onshore diamond mining company – owned 50/50 by the Namibian government and De Beers Group – is hanging onto its own existence by fingernails as on-land diamond reserves wear thinner. Original operations started in 1908 and, while diamonds themselves are said to be ‘forever’, mining them is finite. The company, in fact, had its eulogy already written in preparation of its pre-empted closure in 2012, but work by its engineers breathed life into its lungs so it may hang onto dear life for 10 more years.

As it stands, consensus at Dr Frans Indongo Street is that all and sundry must prepare to clear their desks and hang up their mining helmets by 2022 – although there remains an unheralded sense of optimism that maybe, just maybe, another lifespan extension is on the horizon.

CEO Riaan Burger is being conservative about such possibilities, firmly sticking to the official version that operations have entered the evening of their lives.

And unless his technical team springs a surprise, Burger is resigned to the reality of prevailing over the closure or arguably the country’s most shining legacy.

While Namdeb employees may be fearing for their jobs in case the sad ending becomes biblical truth, it would be foolhardy of the rest of the country to ignore the national storm that comes with such closure.
“Closure would have a significant effect on the fiscus,” said Burger to New Era.

The ginger-haired career engineer added: “Through taxes, royalties and pay-as-you-earn from our employees, in the last seven years we have put over N$4 billion into the fiscus.”
Namdeb may have not declared dividends to its two shareholders since 2012, but ignoring its importance to the domestic economy would be at the nation’s own peril.

“From a fiscal point of view, we are one of the largest contributors to state coffers. Closure would be a hit on the economy. Our annual turnover is N$3 billion and on average 85 percent of that goes into the Namibian economy.”

“This is a national asset for which we must find ways to prolong its lifespan.”
Already, the diamond miner is scheduled to put a final nail in the coffin of one of its prizest assets, Daberas mine, next year.

This would leave Namdeb with three operations, namely Sendelingsdrif, Mining Area 1, or Southern Coastal Mines as is called, and Elizabeth Bay mine, currently being nursed on care and maintenance basis. 

Elizabeth Bay is deemed surplus to requirements and has been up for sale for sometime, with Namdeb saying it no longer has the resources required to keep it afloat.

“Namdeb, being a large organisation, has a certain cost structure. We believe Elizabeth Bay when sold to another company, could be operated economically with a very lean cost structure, different from how a big organisation like ours may operate it,” he says.

2019-08-30  Toivo Ndjebela

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